The Institute of Public Affairs (IPA) welcomes the Australian Chamber of Commerce and Industry’s (ACCI) call on the next government to reduce red tape.
In an op-ed in the Herald Sun today, Mr James Pearson – the Chief Executive of ACCI – notes that in the past decade Australia has slipped from 10th to 21st on the Global Competitiveness Index. And that this slide is likely to continue without policy reform, resulting in an attendant hit to our standard of living. Mr Pearson writes that a key part to reversing this trend will be for whoever wins government on Saturday to ‘let entrepreneurs get on with growing their businesses by reducing red tape each year.’
It’s great to see other groups – especially leading business representatives – are raising the economic and social costs of red-tape. So far both major parties have been almost entirely silent on this issue.
This is a shame because red-tape is a huge issue in our economy. As ACCI’s 10 business priorities for the 2016 election notes, excessive regulations mean that business owners spend more time complying with rules and less time finding ways to grow their enterprise and satisfy their customers. This comes on the back of the Australian Chamber’s latest National Red Tape Survey, where more than one in four respondents said they spent 11 hours a week or more on compliance, with almost one in two putting the annual cost of compliance at beyond $10,000.
This analysis complements work done by the IPA which highlighted the costs of regulation and the growth of our regulatory state. In particular, the IPA estimated that red-tape imposes a $176 billion cost on the economy in terms of forgone economic output.
These large costs stem from the stifling effect red-tape has on competition, resource diversion from more productivities activities, employment and innovation.