Industry-Innovation-and-Competitiveness-Agenda

Ambition 1:
A lower cost, business friendly environment
The Government will make it easier and cheaper to do business, particularly for small business,
by:
• reducing the burden of regulation;
• reducing the burden of taxation; and
• improving access to high-quality, low-cost inputs to business by opening the economy to
greater domestic and international competition.
Reducing the regulatory burden
Regulation has been allowed to grow unchecked and for too long other policy objectives have
taken precedence over Australia’s competitiveness. The Government is committed to restoring
the balance by reducing inefficient regulation, simplifying compliance arrangements and
improving the responsiveness of Australia’s regulators.
Regulation is necessary for a well-functioning economy and society, but there are costs that
should not be ignored. Regulation, by influencing people’s and business’s behaviour, can help
society function and manage risks. At the same time, regulations impose costs and reduce the
flexibility of businesses and individuals to adapt to changing economic conditions.
This regulatory burden has been rising, particularly in recent years. Between 2007 and 2013,
around 21,000 new regulations were introduced at the Commonwealth level alone.
This hurts small businesses in particular. Around 60 per cent of Australian businesses are sole
traders and 85 per cent have fewer than five employees (Connolly et al, 2012). The need to
keep up-to-date with so many regulatory requirements is an additional burden for the local
newsagent, drycleaner, baker and butcher, who already have to be the accountant, marketer,
HR manager and cleaner for the business as well as the chief salesperson.
Industry Innovation and Competitiveness Agenda
In
Co
This burden has been exacerbated by the interaction of multiple, sometimes overlapping,
regulatory regimes across the different levels of government. For example, the operator of
a cafe that serves alcohol and provides outdoor dining may need to navigate as many as
71 different licence, permit or registration processes across the three levels of government. This
involves interacting with eight different government agencies (Productivity Commission, 2007).
Such regulatory excess saps entrepreneurial drive. This problem is not limited to small business;
while progress has been made, different work health and safety laws also add to the complexity
of operating a multi-jurisdiction business.
TPO00007
The Reform Agenda: Ambition 1
27