Abbott's magic 7 rules to stop regulation

The Government says it will take the scissors to red tape, forcing public servants to approach regulation in a 'new light'. They will now have to consider 7 key questions before regulating which are...the same as they were under Howard, Rudd and Gillard.

UPDATED Thursday 27 March to reflect 7 questions governing introduction of regulation.

Happy repeal day everyone.

Following on from all the media attention last week, today (Wednesday 26 March) is the actual day the government will light a big bonfire that will burn away that horrible thing known as red tape.

To help ensure we’re all well informed about exactly what this red tape is, the government’s launched a shiny new website.

Graph for Abbott's magic 7 rules to stop regulation

On that website we see that this government is shaking things up with those nasty red-tape-obsessed bureaucrats by launching a New Guide to Regulation. The website promises us that:

The Australian government’s new [our emphasis] guide to regulation has been written to help change the way policy makers think about regulation.

Now, in case you hadn’t heard the message that this is ‘new’ and a major change, if you click on the guide, Parliamentary Secretary to the Prime Minister, Josh Frydenberg, informs us just how different things will be:

This guide has been written to help policy makers see regulation in a new light.


With this new approach stakeholders can look forward to a future with substantially less red tape and Australia’s economy continuing to grow and prosper.

Now, one of the authors of this article you’re reading had -- in a past career -- been one of those nasty red tape creators, with direct experience in the old regulatory process, even sparring once or twice with the Office of Best Practice Regulation and the Productivity Commission.

Dusting off an old copy of the government's Guide to Regulation from 1998, one is struck by the cover of the new guide: It shows a pair of scissors slashing away at some red tape -- a not-so-subtle warning to those pesky red-tape-making bureaucrats.

Graph for Abbott's magic 7 rules to stop regulation

So what will this new guide require public servants to do before introducing new regulation?

Well from now on they’ll have to undertake a regulatory impact assessment to assess whether the regulation is necessary and whether benefits outweigh costs.

Hang-on, that’s what the 1998 guide set out.

Ahh but this new guide with scissors on it will now force them to answer seven key questions in evaluating whether new regulation should be introduced. These are so much different from the old guide as the extracts for each guide below clearly demonstrate.

Graph for Abbott's magic 7 rules to stop regulation

One thing you have to give the new guide is that it’s prettier than the old one, even if it isn’t really all that new.

The old 1998 guide had the seven key questions hidden amongst boring big slabs of text. Also it was all in black and white and had complicated flow charts in it. This government has introduced coloured headings and it's cut down the amount of text and removed those pesky flow charts. So it’s much, much easier for journalists to read. 

Journalists… but isn’t this intended for policy makers?

But there’s more.

The cutting red tape website has a clever temperature gauge-like tally, which will allows us to keep track of how much money the government has saved from all that red tape it's cut.

Here’s the tally before the major announcement last week:

Graph for Abbott's magic 7 rules to stop regulation

Then Prime Minister Tony Abbott made a major announcement at 9am on March 19, leading it to surge:

Graph for Abbott's magic 7 rules to stop regulation

And even after the speech, at 10.30am last Wednesday, the tally kept creeping up:

Graph for Abbott's magic 7 rules to stop regulation

Ah, false alarm. At 11.30am, the Coalition apparently decided it had cut too much:

Graph for Abbott's magic 7 rules to stop regulation

Now rather strangely, this tally hasn’t been adjusted to take into account that Finance Minister Mathais Cormann announced two days ago that he’ll be halting the roll-back of the Future of Financial Advice reforms.

According to the government’s listing of the savings from the red tape roll-back initiatives below, the repeal of financial advice regulations accounted for 28 per cent of the $700 million tally.

Graph for Abbott's magic 7 rules to stop regulation

Note: they’ve also found another $141.88m of savings that lack a regulatory impact statement costing

According to Cormann he’d like to take more time to undertake “consultation” with stakeholders. But he has also said that this won’t make any difference, because he still intends to legislate the changes, so maybe the tally doesn’t need to change.  

But hasn’t Cormann read point five of the ten principles for Australian government policy makers in the Red Tape Scissors Guide?

It states:

Policy makers should consult in a genuine and timely way with affected businesses, community organisations and individuals.

In addition there are some other items that mean we should expect the tally to be revised downwards because of government additions to red tape.

While businesses shouldn’t need to comply with the carbon tax in the future, they’ll instead simply have to manage the tracking and reporting of performance against emissions-intensity baselines. This will involve not just reporting their emissions but also include the different units of production associated with each of those emissions. Then they’ll have to manage any make good requirements if they happen to exceed their baselines. They’ll also need to develop and familiarise themselves with abatement activity methodologies and get accredited to participate in the abatement auction process. They’ll also need to get their legal teams poring over the contracts government will require they sign for participating in the scheme. So, not much red tape at all.

And yes, the government will likely ditch that parental leave scheme. But, it’ll probably replace it with an extra tax that big business will have to administer.

One wonders whether Abbott’s new parental leave scheme will be subject to point two of the ten principles in the Scissors Guide:

Regulation should be imposed only when it can be shown to offer an overall net benefit.

Not to worry, just like the old guide to regulation, the prime minister can grant an exemption from such pesky requirements.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles