New proposals by the Tasmanian government to cap accommodation sharing pose a serious threat to the state’s economy. New red tape changes would limit the number of days that residences can offer lodging to 42 per year. Homeowners providing accommodation for more than 6 weeks would need to abide by the same planning regulations as commercial accommodation services. The target obvious here is AirBnb, the sharing economy service that is disrupting the short term accommodation market.

This red tape is petty protectionism for the state’s tourism industry.

The changes are likely to slash the supply of rooms that are made available by home owners, as the added compliance costs will diminish the viability of the service they provide.

Brent Thomas, head of public policy for Australia and New Zealand Airbnb, said that the changes would likely “take away five percent of Tasmanian tourism”. This is because half of the supply of Airbnb rooms make up over a tenth of Tasmania’s accommodation, and are hosted for more than 42 days per year.

Darcy Allen and Chris Berg point out in the IPA’s The Sharing Economy: How Over Regulation Could Destroy an Economic Revolution, “It is in the best interests of the platforms to produce a reliable and safe service; this is their brand. To do this, they develop and implement bottom-up governance, utilising and making information available that only the consumers can provide”. In this way red tape can create more problems than it solves.

There is no argument for the proposed changes to Tasmania’s state planning provisions, and the unintended consequences could be drastic for the state’s tourism sector. This addiction to red tape for the sake of appeasing lobbyists must be abandoned for the betterment of the Tasmanian economy at large.

Kurt van der Wal was an intern at the Institute of Public Affairs