LUKE GRANT:
I mentioned this story in the Australian. High wages and rising costs are preventing Australians from getting new road and rail projects that could lift the economy, this according to business leaders. They went on to quote Mary Thompson, Managing Director of McCleod Rail who blamed government rules for shackling employers and creating ‘a bureaucratic and just plain timid’ approach to getting projects built.
She said the central problem in terms of wage costs isn’t the poor mine electrician or haul truck driver getting $150,000 a year. It’s the 20 people in the project office doing compliance. And she says each person probably spends between 25-85% of their available time on compliance, paperwork, checks, inspections, meetings and correspondence.
Now I said at the top of the show before the election the Minister for Small Business and Shadow Minister Bruce Billson made a lot of cutting red tape and making it easier for business to do their business. So we thought we would get him on the show today so he could show us how the new government’s going about cutting red tape so that poor Mary Thompson from McCleod Rail doesn’t have the issues that she feels are preventing her from getting her business further advanced.
Nice to talk to you Bruce and happy new year.
BRUCE BILLSON:
Thanks Luke and I hope you and your listeners have a super 2014.
LUKE GRANT:
Good on you now this story I thought was quite revealing. I mean, many of us think this is all about how much you get per hour but the fact that she, that is Mary Thompson, was talking about 20 people in the project office doing compliance. That is worrying stuff, isn’t it, and is that from what you have observed in your many years travelling around the country talking to small business – one of those issues that have held them back?
BRUCE BILLSON:
Absolutely. The regulatory burden and the compliance web is gumming up so many parts of our economy and also in the delivery of key services. Whether you talk to people that are responsible for running hospitals or aged care facilities. Even in the Universities, the amount of time and resources that go into compliance, reporting and sending material into Government regulators – we think there’s a need for a fresh look at this. The Productivity Commission, in their assessment, they think we could reduce unnecessary regulation. And that doesn’t mean we get rid of all regulation, it’s about making sure it’s justified, its right sized, it’s relevant to the issues trying to be addressed. Getting that right, they think it can add about $12 billion of additional GDP per year and that’s why we’ve set about getting $1 billion of compliance costs out of the economy. So people like Mary and many other people wanting to do good and have a go, have the encouragement to do so and don’t run into this web of excessive compliance and red tape burden.
LUKE GRANT:
So how did we end up with this excessive compliance burden? Is it local government, is it State Government and the Federal Government overtime just working over the top of each other-not working together? In terms of ‘happy to get the new regulations in there but not so happy to look at the outcome for the small business person?’
BRUCE BILLSON:
I think that’s part of it Luke. We’ve got more than 130 national regulators. When you look at State and Territory level there is another 350 regulators at that level and then when you talk about local government there is another regulatory layer there. What’s also happened is, and I think this is an important conversation we need to have with your listeners and the broader community, that not every problem can be regulated out of any possibility of ever occurring.
What we seem to have done Luke is really overreach in some areas. 21,000 new and amended regulations were introduced by the previous Labor government over their six years, a global economic competitiveness assessment that has seen us fall great distances. We are 21 now, were 12 six years ago and going down that ladder making it harder to do business and create opportunity in our country.
That’s why we need this systematic approach that the Abbott Government has put in place with a $1 billion target, apportioned across portfolios including my own. Units have been set up within government to work through this myriad of compliance and red tape obligations to see what's necessary, what’s overreaching, what’s excessive, what might make sense to a big business that might have 20 people in the compliance department but represents an absolute nightmare for the Mum and Dad business where the proprietors also have to be marketing director, the sales people, the pay clerk, the ones complying with all the safety regulations – this is why there is a need for a change in culture and a real fresh look at the cost and impact and missed opportunity that excessive regulation creates.
LUKE GRANT:
And this of course has been revealed in the lead up to this inquiry to unlock new spending on infrastructure. But have you already Bruce, in your short time as Minister, have you already identified area’s and made changes or are we waiting now on one major announcement where you’ll go ‘right, here are the savings’…
BRUCE BILLSON:
Yeah we have started but no single measure is the silver bullet. What we’ve started with is we’ve got through the House of Representatives an important change that stops small businesses and well any employer being the pay clerk for the governments Paid Parental Leave Scheme. All of the machinery is there to have that handled through the Family Assistance Office.
We’ve got the Tax Office geared up now to be able to distribute superannuation contributions to employee’s that an employer might have had to process multiple cheques and send that off in multiple directions.
We’ve got a change in the regulatory impact statement process, so that before any Minister comes up with an idea for a new regulation they have to find ways of removing regulation and seeing that cost of compliance reduced. So this is happening across the board. In Mary’s case, in the construction area, we’ve already seen some of the contracting obligations, even where the government is the customer. They can be extraordinarily expensive and excessive and we are looking at how we can streamline government procurement and the contractual documents so we can get business back to business – rather than having it spend a disproportionate amount of time on these compliance tasks.
LUKE GRANT:
Yep good stuff, good to chat as always.