It has been ten years since the Howard government’s landmark Taskforce on Reducing Regulatory Burdens on Business inquiry. However, despite much apparent effort, on a number of international measures Australia’s red tape performance has slipped since that report was released.
This paper looks at Australia’s regulatory quality across five measures of international competitiveness.
Economic freedom indexes, particularly the Fraser Institute annual freedom index, indicate a relative decline in Australia’s position among OECD countries on regulatory freedom. More stringent labour market regulations are a major issue.
Australia holds up reasonably well against other OECD countries on a key regulation measure in the World Economic Forum Global Competitiveness Report, but its low ranking against 140 countries surveyed remains a concern.
In terms of a World Bank survey of regulatory quality Australia ranks highly against most other countries, although it lags behind the likes of New Zealand, Nordic countries, Hong Kong and Singapore in world rankings.
OECD rankings of regulatory burden indicate scope for Australian improvement in terms of reducing entrepreneurial entry barriers and relaxing restrictions against foreign investment.
It is unclear that regulatory reform initiatives in recent years have induced a major improvement in international investor sentiment that Australia is an attractive place to do business without undue red tape risks.
In a globalised world with continuous economic change, it is vital that Australia pursues more ambitious action to cut red tape costs and improve its regulatory management.