NO.007

PRODUCTIVITY COMMISSION TO COMMENCE ANNUAL REGULATION REVIEWS

The Productivity Commission’s annual regulation review process will commence on 1 April 2007.  The first review will focus on the regulatory burden on business in the agriculture, forestry, fishing and mining sectors. 

Significant progress has been made in introducing better regulation-making processes for new regulation in light of the findings of the Banks Taskforce Report.  The next step in the Government’s regulation reform agenda is to examine the existing stock of Australian Government regulation to weed out inefficient regulation that is imposing an excessive burden on business thereby inhibiting Australia’s productivity and economic competitiveness.

The Treasurer reaffirmed the Government’s intention to undertake annual reviews of regulation in response to the Banks Taskforce Report (see Press Release of 15 August 2006).  A copy of the Government’s response to the Banks Taskforce Report is available on the Department of the Treasury website, www.treasury.gov.au (see page 88, recommendation 7.27).

The annual regulation reviews will identify regulation that is unnecessarily burdensome, complex or redundant, or duplicates regulations in other jurisdictions.  The Productivity Commission will develop a short list of priority areas with options to alleviate regulatory burden and identify reforms to enhance regulatory consistency across jurisdictions.     

To ensure that all industry sectors are examined by the Productivity Commission, and to provide certainty for businesses, the reviews will be conducted according to a five year cycle.

Australia’s primary sector will be the focus of the first review and, in subsequent years, the manufacturing sector and distributive trades, social and economic infrastructure services, and business and consumer services sectors will be examined. The fifth year of the cycle is reserved for a review of economy-wide generic regulation, and regulation that has not been picked up earlier in the cycle. 

The Productivity Commission will report the findings of the first annual review at the end of October 2007. 

The terms of reference for the annual regulation reviews are attached.

Further information on the review can be obtained from the Productivity Commission’s website at www.pc.gov.au or by contacting the Commission directly on 02 6240 3239.

CANBERRA

Contact:

Renae Stoikos

02 6277 7340

Terms of reference

ANNUAL REVIEW OF REGULATORY BURDENS ON BUSINESS

Productivity Commission Act 1998

The Productivity Commission is asked to conduct ongoing annual reviews of the burdens on business arising from the stock of Government regulation.  Following consultation with business, government agencies and community groups, the Commission is to report on those areas in which the regulatory burden on business should be removed or significantly reduced as a matter of priority and options for doing so.  The Commission is to report by the end of October 2007, and the end of August each following year.

The Commission is to review all Australian Government regulation cyclically every five years.  The cycle will commence with a review of regulatory burdens on businesses in Australia’s primary sector.  In subsequent years, the Commission is to report sequentially on the manufacturing sector and distributive trades, social and economic infrastructure services, and business and consumer services.  The fifth year is to be reserved for a review of economy-wide generic regulation, and regulation that has not been picked up earlier in the cycle.  The Commission’s programme and priorities may be altered in response to unanticipated public policy priorities as directed by the Treasurer.

Background

As part of the Australian Government’s initiative to alleviate the burden on business from Australian Government regulation, on 12 October 2005, the Government announced the appointment of a Taskforce on Reducing Regulatory Burdens on Business and its intention to introduce an annual red tape reduction agenda.  This agenda incorporates a systematic review of the cumulative stock of Australian Government regulation.  The Government approved this review process to ensure that the current stock of regulation is efficient and effective and to identify priority areas where regulation needs to be improved, consolidated or removed.

Furthermore, the regulatory reform stream of the Council of Australian Governments (COAG) National Reform Agenda focuses on reducing the regulatory burden imposed by the three levels of government.  On 10 February 2006, COAG agreed that all Australian governments would undertake targeted public annual reviews of existing regulation to identify priority areas where regulatory reform would provide significant net benefits to business and the community.  COAG also agreed that these reviews should identify reforms that will enhance regulatory consistency across jurisdictions or reduce duplication and overlap in regulation and in the role of regulatory bodies.

Scope of the annual review

In undertaking the annual reviews, the Commission should:

1. identify specific areas of Australian Government regulation that:
   1. are unnecessarily burdensome, complex or redundant; or
   2. duplicate regulations or the role of regulatory bodies, including in other jurisdictions;
2. develop a short list of priority areas for removing or reducing regulatory burdens which impact mainly on the sector under review and have the potential to deliver the greatest productivity gains to the economy;
3. for this short list, identify regulatory and non-regulatory options, or provide recommendations where appropriate to alleviate the regulatory burden in those priority areas, including for small business; and
4. for this short list, identify reforms that will enhance regulatory consistency across jurisdictions, or reduce duplication and overlap in regulation or in the role of regulatory bodies in relation to the sector under review.

In proposing a focused annual agenda and providing options and recommendations to reduce regulatory burdens, the Commission is to:

• seek public submissions at the beginning of April in 2007, and at the beginning of February in each following year, and consult with business, government agencies and other interested parties;
• have regard to any other current or recent reviews commissioned by Australian governments affecting the regulatory burden faced by businesses in the nominated industry sectors, including the Australian Government’s response to the report of the Taskforce on Reducing Regulatory Burdens on Business;
• report on the considerations that inform the Commission’s annual review of priorities and reform options and recommendations; and
• have regard to the underlying policy intent of government regulation when proposing options and recommendations to reduce regulatory burdens on business.

The Commission’s report will be published and the Government’s response announced as soon as possible.

PETER COSTELLO