Deregulation agenda

Budget Review 2020–21 Index

Jonathan Curtis

This year’s budget contained a number of measures in support of the Government’s ongoing program to revise Australia’s regulatory arrangements. These follow on a similar program of measures announced in the New Deregulation Agenda forming part of the 2019–20 Mid-Year Economic and Fiscal Outlook (MYEFO).

The term ‘deregulation’ implies removing regulations—which is certainly an element—but the program has a broader focus of decreasing the regulatory compliance burden on industry through: repealing regulations that are no longer considered necessary; streamlining and harmonising regulations across jurisdictions; and (a major feature of many measures) maximising the use of technology.

This brief outlines the scope of the combined Budget 2020–21 measures as well as the context of previous announcements and implementation. It notes that the times are challenging for the more than sixty Australian government agencies with regulatory functions, with the need to bring together the deregulation agenda, complex new technologies and implement the lessons from a number of reports into regulatory failures.

2020 Budget measures

The main element is the cross portfolio JobMaker—Deregulation package, providing $92.1 million over four years (Budget Measures: Budget Paper No.2 2021–22, p. 62). The package includes:

$40.4 million over ten years from 2020–21 (including $24.6 million over four years from 2020–21) to build IT infrastructure to support a new Australian Carbon Credit Units exchange trading platform and streamline the Clean Energy Regulator’s IT systems
$18.5 million over four years to streamline approval processes into a single application across jurisdictions, allowing for faster establishment of new early childhood education and care businesses, and employment of their staff
$17.9 million over three years to modernise the Therapeutic Goods Administration business systems to streamline processes for the medicines and medical devices industry (costs to be met from within the existing Department of Health budget)
$7.2 million over four years to streamline the agricultural levy legislative framework
$0.2 million in 2020–21 to remove the requirement for eligible supplementary and vocational education and training courses to be registered on the Commonwealth Register of Institutions and Courses for Overseas Students (costs to be met from within the existing Department of Education, Skills and Employment budget)
$1.8 million over two years to trial a series of regulatory reporting reductions for Australian businesses
$2.0 million over two years from 2020–21 to improve the accountability and transparency of regulator performance, build regulator capability, share best practice and drive a culture of regulator excellence; and an additional $6.4 million over three years from 2020–21 to upskill and further build the capability of regulators, with an initial focus on agricultural export regulators to improve the delivery of services and
$13.4 million over two years from 2020–21 to continue funding the Deregulation Taskforce to support and deliver the National Deregulation Agenda.

There are three further JobMaker packages that include deregulation agenda measures including: ‘busting congestion for agricultural exporters’ (p. 50), the ‘simplified trade System’ (p. 109), and the Digital Business Plan (p. 64), plus a measure providing additional funding for ‘maintaining the timeliness of the environmental assessment process’ (p. 51) (see separate Budget Review brief on Environmental approvals).

Initiatives prior to the Budget

These budget measures represent the latest elements of the government’s broader deregulation agenda, which was set out in a speech by Ben Morton, Minister Assisting the Prime Minister on 2 October 2020.

Noting that ‘good regulation is critical to making Australia one of the best countries in the world to live, and ensuring Australia has a well-functioning economy, society, environment, and democracy’ he argues that deregulation is about ‘getting rid of unnecessary, disproportionate, and inefficiently implemented regulation.’ The Government is therefore targeting ‘bad regulation’ that is:

duplicative, requiring businesses to provide similar information to multiple regulators
hard to find or understand
results in unnecessarily inconsistent requirements across or within jurisdictions
slow and costly to navigate, or
requires paper-based forms or outdated technology to comply

Some elements of this agenda are of relatively longer standing. The Government claims that the ‘Cutting Red tape’ initiative resulted in savings of $5.8bn in red tape (Budget paper no.2 , p.44) while the Office of Best Practice Review (OBPR), formerly in Treasury but subsequently moved to the Department of the Prime Minister and Cabinet, is charged with analysing proposed regulation and the system of Regulatory Impact Analysis.

In July 2019, the Government established the Deregulation Taskforce tasked with ‘ensuring that, where regulation is required, it is implemented with the lightest touch—that it is designed and applied in the most efficient and timely way, with least cost on businesses.’

The 2019–20 MYEFO also saw a substantial package of measures under the ‘New Deregulation Agenda’, amounting to $156.2m over four years, (Mid-Year Economic and Financial Outlook 2019–20, p. 284) ‘to streamline regulatory compliance processes and reduce the cost of doing business, including by targeted investments in technology’. That package included the following measures:

$60.6 million in 2019–20 to introduce Director Identification Numbers and transferring existing business registers on to a modernised platform operated by the Australian Business Register
$29.2 million over four years from 2019–20 to streamline export processes by completing the delivery of a digital export certification management system
$26.8 million over three years from 2019–20 to partner with the Western Australian Government to develop an online platform for environmental assessment and approval processes, supported by a database of biodiversity information
$21.4 million over three years from 2019–20 to develop a new trade information service to provide businesses with a single source of online information on how to export
$5.4 million over four years from 2019–20 to support food exporters by promoting the use of the Australian Trusted Trader (ATT) customs facilitation, and streamlining and digitising the application process for the ATT and the Known Consignor Scheme
$10.0 million over two years from 2019–20 to help small businesses employ their first person, including through developing a consolidated online checklist
$3.0 million in 2019–20 to fund the Deregulation Taskforce to support the delivery of the Government's deregulation agenda.

Regulatory challenges

In the context of the deregulation agenda, regulatory agencies are also grappling with the challenges and opportunities created by technology. This creates both opportunities and threats: harnessing of potential of ‘RegTech’ (on which point see the Productivity Commission Information Paper) is an important element of the government’s deregulation agenda. However, to simplify and automate compliance and reporting activities, regulatory agencies first need to acquire and integrate the relevant equipment and technical skills into their operations.

Finally, regulatory agencies have the challenge of effectively administering and enforcing the rules for which they are responsible. In recent years, a number of reports have (among other things) criticised regulators and provided lessons for governments and regulators on what can go wrong. Several examples include the 2019 Royal Commission into Aged Care Quality and Safety Interim Report, the earlier 2017 Review of National Aged Care Quality Regulatory Processes, the 2019 Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry, the 2020 Interim report of the Review into the EPBC Act and a 2020 ANAO performance audit report Referrals, assessments and approvals of Controlled Actions under the Environmental Protection and Biodiversity Conservation Act 1999.

Similarly, the Senate Education and Employment Committee October 2015 reported into The operation, regulation and funding of private vocational education and training (VET) providers in Australia, while in September 2018, Philip Moss provided his Review of the Regulatory Capability and Culture of the Department of Agriculture and Water Resources in the Regulation of Live Animal Exports.

The NDIS Quality and Safeguards Commission Senate Select Committee, which is currently underway, has generated media reports of the agency lacking the capacity to investigate significant numbers of complaints.

In 2019 in NSW, allegations of poor regulation led to the 2017 Independent investigation into NSW water management and compliance, while reports of poor quality residential developments caused the NSW Parliament Public Accountability Committee to inquire into Regulation of building standards, building quality and building disputes.

The reports contained a range of findings on the causes of the regulatory problems, including agency resourcing not commensurate with the scale of the regulatory staff; lack of adequate information, or a regulatory culture reluctant to prosecute non-compliance.

Arguably, these reports demonstrate the capacity of our governance systems to investigate and correct deficiencies, but also suggest the need for ongoing attention to the complex tasks of compliance and enforcement. In Australia there are signs of an emerging sense of the importance of the ‘regulatory craft’ which has seen the emergence of the ANZSOG Regulators Community of Practice.

It will be interesting to see whether inaugural appointments of ‘Heads of profession’ for the human resources, data professional and digital professional streams of the Australian Public Service also leads to a ‘Head of the Regulatory profession’.

All online articles accessed October 2020

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