"The red tape burden has increased exponentially... Under this government we have seen 21,000 new regulations and just 300 regulations go out."
Tony Abbott on Tuesday, July 9, 2013 in a speech at the launch of the Coalition's Policy to boost productivity and reduce regulation.
Coalition says Labor's red tape burden is on the rise
Kevin Rudd has been quick to roll out policy changes to dampen the Coalition catch cries of ‘stop the boats’ and Australia’s great big carbon tax.
He is, however, yet to defeat a prominent but less catchy tune: the Coalition’s attack on government regulation, which they say in excess, "results in more costs than benefits and discourages innovation, investment and job creation".
The party line has appeared in various forms. On the Liberal Party website, it says: "Under the Rudd-Gillard Government, 21,000 additional regulations have been added despite having promised to cap the growth of regulation with a ‘one-in, one-out’ policy."
Andrew Robb, shadow minister for finance, deregulation and debt reduction, wrote in an email to supporters on July 8: "Under Labor, 21,000 additional regulations have been added despite Kevin Rudd’s promise in 2007 to cap the growth of regulation."
Opposition leader Tony Abbott echoed at the Launch of the Coalition's policy to boost productivity and reduce regulation: "Over the last few years, the red tape burden has undoubtedly increased exponentially... In fact, since the end of 2007 under this government we have seen 21,000 new regulations and just 300 regulations go out. So, it has been a lamentable failure on the part of the current government."
And at a doorstop Monday, when Abbott was asked about regulation in the childcare sector, he said: "I have a problem with over-regulation more generally."
He pointed to Rudd’s promised one-in, one-out rule to halt the increase in regulation as "another broken promise".
"In fact there are some 21,000 new regulations under this government and I think they’ve only taken out about 1000....
"As I understand it, there is a lot of additional red tape in the child care sector."
The Coalition has said on numerous occasions that they will reduce regulation to lower business costs, generate more jobs and strengthen the economy.
Rudd first committed to "reducing the level of over-regulation of the Australian business community" in a speech at the National Press Club in April 2007 as opposition leader.
He promised to harmonise key regulations nationally within five years of taking office, to establish a new Federal Government Small Business Advisory Council to review the impact of new regulation on business, and promised to adopt a "one in, one out" principle where new regulations must come with proposals to remove others.
"The truth is business regulation is now right out of control," Rudd said at the time.
Trying to calculate how many regulations have been brought in by this government has been no easy task.
Suffice to say, there is a specific definition of "regulation", but we accept the Coalition is referring more broadly to ‘legislative instruments’. Legislative instruments include all sorts of regulations to flesh out our laws, as well as ordinances, proclamations, declarations, airworthiness directives, etc. as opposed to 'regulations’ which must have the word ‘regulation’ in their title according to the government database of legislation, ComLaw.
The Office of Parliamentary Counsel (OPC) clarified the numbers: from December 2007 to May 2013 inclusive, the Commonwealth made in the order of 22,257 new Acts and legislative instruments.
More than 4200 of these were Tariff Concession Orders "issued to the benefit of, and in response to explicit requests from, business". Tariff Concession Orders are rules made about importing goods from overseas. More than 3400 regulations were Airworthiness Directives.
And finally 6000 legislative instruments have been repealed, according to OPC. The Department of Finance and Deregulation put the number of repealed instruments at 9,294 between December 1, 2009 and April 30, 2013, but that figure includes many older instruments not just those put into law during that period.
All of this is somewhat meaningless without a useful comparison. Given ComLaw only looks back to January 1, 2005, we couldn’t get a holistic picture of the Howard years. On our first reading, for 2005 and 2006, we thought the government had registered 28,314 legislative instruments (the measure used by the Coalition).
But there is a catch, as the very helpful people at the OPC pointed out to us.
Until the Legislative Instruments Act 2003 (LIA) came into force on January 1 2005, only statutory rules made by the Governor-General were required to be published centrally.
Statutory rules (now known as select legislative instruments) represented less than 10% of the 7801 new legislative instruments registered in 2005 and 2006.
Further, a large number of pre-2005 legislative instruments were still needed and had to be registered during this period, to get the books aligned. That would help explain the large number of registered legislative instruments we found for that period.
To get a broader picture we consulted another database, AustLII, a legal information database run by the UTS and UNSW law faculties.
Measuring this time "numbered regulations", we calculated the Howard government to have introduced 4460 regulations for the years 1996 to 2007 inclusive. On average, that is 372 per year.
Using the same method, Labor has introduced 1811 numbered regulations, or 302 per year.
Abbott is right to say Rudd has not exactly delivered on his promised one-in, one-out rule – and we can’t know if Rudd was being literal – but certainly the Labor government has made deregulatory progress.
The Council of Australian Governments agreed to 27 deregulation priorities in 2008 and by April this year 18 were completed. The others are still being worked through with State and Territory governments and business.
In 2007, Rudd said the Productivity Commission estimated that the cost of compliance with business regulation was $40 billion dollars per annum. The Productivity Commission noted in April 2012, that 17 of the reforms would reduce business costs by $4 billion per year in the long run.
All in all, the Coalition got the number more or less right: 21,000 regulations under Labor if you are talking about regulations added. Robb’s claim of "21,000 additional regulations" is more dubious if you consider the thousands repealed.
In the case for regulation growing exponentially, we found Department of Finance and Deregulation figures that show the number of legislative instruments is growing, but at a decreasing rate. The graphs to illustrate this are pictured.
Our next question: is this excessive red tape?
Emeritus Professor of Law at the University of NSW, Mark Aronson, says if red tape is essentially ‘unnecessary compliance requirements’ then legislative instruments aren’t a very decisive measure of red tape.
To briefly recount Aronson’s history lesson, Acts were essentially once far more comprehensive. Most of what one needed to know about the implementation of a law was written into them. Over time though they have becomes less and less comprehensive as more substantive detail has been relegated to something called ‘subordinate legislation’.
"Acts set up the structure but not the precise rules," says Aronson. This is where the rules and regulations come into play.
Aronson says there is a lot of subordinate legislation being made, but it is unclear whether that is a net gain in regulation or replacing older instruments.
Most legislative instruments "sunset" or expire around 10 years after they are made. This process means the relevant department essentially has to justify retaining old regulations by renewing them. A measure to reduce red tape, one might argue.
Associate Professor of Law at the Sydney Centre for International Law, Fleur Johns, agreed counting regulations was not an elegant measure of the amount of ‘red tape’ a government was generating.
"For all that we know, a significant proportion of these regulations could have been simplifying or repealing earlier ones," she said.
Aronson says it’s less and less useful to use legislative instruments as a measure of red tape.
"The more skeleton an act becomes, the more substance is left for subordinate legislation," he said. "You can’t exactly call that red tape."
The Department of Finance and Deregulation points out that not all Commonwealth Acts and legislative instruments impact business.
"Acts and Legislative instruments also cover issues such as internal administrative arrangements of government, service delivery to individuals and military justice issues. Of those that impact on businesses, a large proportion relate to airworthiness directives and tariff concession orders," the Department wrote to us.
"The Government has also passed legislation to enable the removal of around 12,000 Commonwealth instruments which are redundant or no longer necessary."
The Coalition has said repeatedly that despite Labor’s promise to deregulate, they have increased red tape by adding 21,000 additional regulations since 2007.
More than 22,200 legislative instruments have been introduced since 2007. But several thousand have also been repealed. Department figures show the number of regulations are not increasing exponentially.
What’s more, this number includes all sorts of regulations that keep our society functioning, such as airworthiness directives and food standards. Our best available comparison shows there were more of these legislative instruments introduced in two years of the Howard government than Labor to date. The Labor government has made progress in their promised reform of excessive regulation. Furthermore, the experts we consulted say counting regulations isn’t a great measure of red tape — we should also look at what they say.
We rate this statement Mostly False.
Published: Wednesday, July 31, 2013 at 1:46 p.m.
Liberal Party of Australia, The Coalition's Policy to Boost Productivity and Reduce Regulation, July 8, 2013
Australian Government, ComLaw, n.d.
Tony Abbott, Remarks at the Launch of the Coalition's Policy to boost Productivity and reduce Regulation, July 9, 2013
Fleur Johns, email exchange, July 19, 2013
Cameron Hill, email exchange, July 9, 2013
Andrew Robb, email, July 8, 2013
Mark Aronson, phone interview, July 18, 2013
Department of Finance and Deregulation, email exchange, July 22, 2013
Department of Finance and Deregulation, Evaluation – How it informs policy development, n.d.
Australasian Legal Information Institute, Commonwealth of Australia Numbered Regulations, July 2013
Kevin Rudd, National Press Club: Facing the Future, April 17, 2007
COAG Business Advisory Forum Taskforce, National Partnership Agreement to Deliver a Seamless National Economy, April 2013
Conversations with various members of the Office of Parliamentary Counsel.
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