Westpac may have just received a capital F for regulatory failure but it’s not about to derail the government’s commitment to reducing the cost and impact of regulation on the business community more broadly.
Scott Morrison calls it regulation “congestion busting” and has put Ben Morton, his close ally and assistant minister, in charge of delivering it. Morton acknowledges the promise to reduce regulation has been a constant commitment from all governments – as well as a constant disappointment to businesses.
Indeed in key sectors, such as energy and banking, the Morrison government has radically increased the scope of regulation. Morton shows little patience for the criticism, saying the PM takes a long-term view of deregulation with an expectation of continuing improvement.
But the government is certainly prepared to increase regulation in cases where companies have broken the law or breached their core responsibilities, he tells The Australian Financial Review. Those responsibilities require providing good products and services at reasonable prices and treating customers and employees fairly – with the only alternative being inevitable calls for greater regulation.
“The government has very few tools and regulation and legislation are the most prominent in our toolbox,” he says. “I don’t want to use them. I don’t want the community to call on us to use them. But we will if we have to. And that’s up to companies and their actions.
“The first and most important action companies should take is to avoid attracting the community’s expectation that the government must act to fix problems created by companies.”
That won’t stop scepticism about whether this government really has a comprehensive deregulation agenda and unease about what new rules it may lob at different sectors.
“What I desperately need is not a generic call to fix regulation or red tape,” he says. “I need industry, and their representative bodies, to be precise in identifying the specific, redundant, excessive, duplicative red tape and regulation that they complain about in a generic sense.
“Red tape and regulation have become buzzwords where it’s a little bit too easy for some people to throw them out as the thing that needs to be fixed.”
According to Morton, it’s instead the practical examples and particular applications that will be crucial to efficiently reducing the administrative burden on business.
That’s also one reason why he insists on making a clear distinction between the design of existing or new regulations and the actions required of business in order to comply with them.
For the first six months in his role, Morton has focused the deregulation task force established by the government on compliance in three specific priority areas: making it easier for food manufacturers to export; for micro-businesses or single traders to take on new employees; and for major projects to get off the ground sooner.
Amongst other measures, for example, this includes changes such as digitising the current paper-heavy export certification process for food manufacturers. It involves developing a single online guide for businesses about what they need to do to employ people and modernising business registers. It means cooperating with the West Australian state government and major mining companies to develop a biodiversity database as part of the move to accelerate, standardise and track progress through the complex state and federal environmental approvals required for major projects.
In a speech to the National Press Club this week, Jennifer Westacott from the Business Council praised these initiatives and said it was great to see the government taking the issue seriously even though there was much more to be done.
“Business knows it must make the case for reform and explain how any changes will improve the lives of Australians,”she said. “But we also need policy makers and regulators to be more aware of the ever-increasing compliance costs that result from poorly designed regulation. You have no idea how much regulation dominates people’s thinking.”
So the BCA is also calling on people to provide examples.
“In this whole regulation debate, Australians do need to ask why does it cost more to ship products to Tasmania than Hong Kong?” she said.
And what Morton will not provide, he insists, is business as usual.
The government expects each department to engage with all stakeholders to continually review its stock of regulation, its relevance and its impact from the viewpoint of business.
“I asked the secretaries to first report to me on what approach they will take in their departments and agencies to achieve these objectives,” he says. He’s now reviewing those reports.
But the taskforce deals with issues across departments and jurisdictions, allowing Morton to pull together packages of changes.
“We’re very keen for industry and for state governments to be aware we are looking to our next round of priority areas in the new year,” Morton says.
That selection process is deliberately targeted.
“I’m a very practical person, and the taskforce is designed to be nimble and practical. We don’t want to step into highly complex areas if there isn’t a dividend through productivity or economic growth or, most importantly, employment,” he says.
That also means being alert to special pleading by companies that sometimes want to make it harder for competitors to enter a market or thrive.
“On a number of occasions I have found myself in meetings that are supposedly about the need to reduce red tape and regulation, only to find myself being told about the importance of the existing regulation and red tape regime which they have adapted to,” he says.
Work on deregulation, he says, is never finished. He’s only at the very start.