PRIME MINISTER:
I’m very pleased to be here with my Parliamentary Secretary, Josh Frydenberg, to formally launch the ‘Cutting Red Tape’ website.
As you know, this is a Government which is committed to cutting red tape. We went to the election promising a $1 billion a year reduction in red tape costs to business. This is a very important commitment that we’ve made, not just to the businesses of Australia, but to the workers of Australia and to the families of Australia because red tape boosts costs and the higher business costs are, the harder it is to employ and the higher that prices are for consumers.
Cutting red tape is essential if we are to boost employment and if we are to reduce the prices or take the pressure off prices that families face every day. So, this is a very important part of our commitment to the families of Australia and to the workers of Australia.
It is a very important challenge facing government because the red tape burden has increased dramatically in recent years. If you look at the World Economic Forum’s Global Competitiveness ranking, Australia has slipped six places in the last five years to 21st place and if you look at the same Forum’s Burden of Government Regulation ranking, believe it or not, Australia is in 128th place, sandwiched between Romania and Angola.
Now, surely we can do better than this.
This is the start of what will effectively be a deregulatory fortnight in the Parliament. Today, we’re launching the website. On Wednesday, I’ll be making a Parliamentary Statement on red tape cost reduction and next Wednesday – Wednesday week – we’ll have our repeal day; the first of many repeal days. I want this to be an important event in the annual parliamentary calendar, the day we actually reduce legislation and regulation, because we have so many days when we increase legislation and regulation. In fairness to taxpayers, in fairness to the people who need to live under this regulatory burden, it's high time that we started reducing it.
I know in Josh Frydenberg we have an enthusiastic advocate for red tape reduction and I believe soon to be an accomplished practitioner of red tape reduction.
JOSH FRYDENBERG:
Well thank you, Prime Minister.
The public's had a gutful of too much red tape and we are absolutely determined to remove the road blocks which are stifling innovation, investment and the creation of thousands of new jobs. So, what we want to see as a Government is a culture change in the way that we approach regulation.
Ministers are establishing, within their own Departments, deregulation units for the very first time. As the Prime Minister said, the Parliament is setting aside two days a year for repealing unnecessary and ineffective regulation.
We are also releasing the Australian Government Guide to Regulation, which is for policy-makers – senior public servants – who are formulating regulations and that gives them a guide how to prepare a Regulatory Impact Statement which is now mandatory under the Abbott Government.
Today we are launching our website, Cutting Red Tape, which will empower the public to provide us with practical examples of red tape that are affecting their lives, whether they're businesses or not for profit organisations.
As we scroll down, we can see our first repeal day is on March 26, with the legislation being introduced on the 19th. On the left you can learn more about repeal day. There's a welcome message from the Prime Minister. You can access this new guide on the right. There is a ‘tracking our progress thermometer’ as you may call it, which indicates the announced deregulation initiatives; that captures the carbon tax, the mining tax, the changes to FOFA. It gives an option for people to leave a comment or if they want to make a detailed submission, they can upload a submission and there on the right has the comment of the day and that comment is from Jos de Bruin, who’s the national Chief Executive Officer of Master Grocers Australia and it said, "Many of our members feel they are in the business of compliance and do a little bit of retailing on the side. This needs to change. We have to cut red tape as a priority”. His organisation represents companies that employ more than 115,000 Australians and contribute more than $14 billion a year to the economy. So, when someone such as Jos de Bruin makes that comment, as a Government we have to stand up and take notice.
Thank you very much, Prime Minister.
QUESTION:
The red tape guide here says that departments can engage external consultants to help them cut red tape. What will be the actual cost of cutting red tape and will that be included in the billion dollar figure?
PRIME MINISTER:
I'll ask Josh to add to this, but we are not about adding to the number of bureaucrats here.
Yes, we've set up deregulation units within departments but they are from existing resources; we aren't taking on additional public servants for the purposes of trying to reduce the number of public servants. We're not doing that. We are not creating new red tape in the name of abolishing red tape.
Josh?
JOSH FRYDENBERG:
Absolutely right, Prime Minister. Look, the position – the preference – is for Departments to use existing resources to prepare these Regulatory Impact Statement processes, but sometimes they need to supplement their own resources by consulting an outside accounting firm who may have particular experience in this area, or an industry body or the like. It's happened under previous governments, it happens under our government, but we try to keep costs to a minimum. But it just reinforces how important the Regulatory Impact Statement process is. We have to get that right because that informs government decision-making and goes before the Cabinet when there are submissions that have a regulatory impact.
QUESTION:
Prime Minister, just on methodology, how does the 350 get calculated? Is that around a productivity gain or something?
PRIME MINISTER:
My understanding, and again I'll ask Josh to support me, is that we ask the Department of Finance to cost all of the measures, including the cost savings of our deregulatory measures.
Just to give you an example, the deregulatory cost savings of a one stop shop has been estimated at a certain quantum, but in fact the long-term benefits to the country of a one stop shop could be way in excess of the actual red tape savings because there could be billions of dollars’ worth of investments which wouldn't otherwise go ahead which do go ahead because of the reduced compliance burden.
So that figure of $350 million there, as I understand it and Josh will obviously add more to this answer, is what the Department of Finance says are the deregulatory savings from the abolition of the carbon tax, the abolition of the mining tax and measures that we've already put in place or we’ve already announced and committed to.
JOSH FRYDENBERG:
That's absolutely right Prime Minister and there's the Office of Best Practice Regulation, which is now housed within the Department of Prime Minister and Cabinet, which also assesses these Regulatory Impact Statements and sometimes Departments do their own calculations as well.
But we have, for example, published the Regulatory Impact Statement for abolishing the carbon tax; that saves $85 million a year in compliance, the mining tax is just over $10 million. They're published figures and they go to the heart of what is reducing the administrative burden, Phil, as a result of abolishing the carbon tax – the paper work that may be involved, the new systems that a company may have to employ.
As the Prime Minister said, the economic impact of abolishing the carbon tax is far greater than $85 million, but that's the compliance burden. So, whatever that number is, the benefits to the economy are exponentially bigger than that.
QUESTION:
So the $350 million covers both business and the costs or savings to Government of these measures?
JOSH FRYDENBERG:
Savings to the business sector.
QUESTION:
So what's the savings, if there are any, to the federal and state bureaucracies from this? Do you have any idea?
JOSH FRYDENBERG:
I don't have those numbers here, Laura, but they’re absolutely significant as well, because they have less administration. But this is focussing on what are stakeholders having to pay to comply with unnecessary regulation.
I just want to add, it's not just business that benefits from our deregulation agenda; it's also the not-for-profit sector. For example, The Brotherhood of St Laurence administers a Commonwealth programme called HIPPY, which provides education for disadvantaged young people to get into school. It's a $100 million programme, they have 75 sites around Australia. Up to now, they've had to report monthly and what we as a Government are saying is now they have to report quarterly, and they don't have to submit as much paperwork and it's estimated that that will save about half a million dollars a year. There are lots of other examples where the not-for-profit sector are going to benefit from our deregulation push.
QUESTION:
Prime Minister, how do you assure people that you can get the balance right between the ‘let it rip’ merchants and overregulation, because as we know for example, the global financial crisis it was regulation put in by the previous Howard Government that went a long way to buffer Australia against the worst excesses that we saw in the United States, for example?
PRIME MINISTER:
Obviously, Paul, we do need effective regulatory systems, but effective regulatory systems need not be intrusive ones and the example that Josh has given in respect of the brotherhood of St Lawrence is a good one and, if I may say so, it's typical of the bureaucratic overkill that we have become used to in recent times. Why does this organisation have to report monthly, when surely quarterly or maybe even annually would be sufficient? The trouble is that if you're a public servant in Canberra, you tend to have, if you like, an accountability fetish and that's fair enough because you go before Senate Estimates and if anything ever goes wrong, I guess you're going to look bad under Senate Estimates cross-examination. But we don't want to protect the bureaucrats at the expense of damaging the organisations that are delivering services. So, it is a question of getting the balance right. I don't think the balance has been right for quite some time and we're going to improve the situation.
QUESTION:
Prime Minister, we haven’t had a long time to look at this booklet but will Regulatory Impact Statements be required now when they weren't before? The Prime Minister has an ability to waive?
PRIME MINISTER:
That’s correct.
QUESTION:
Have you done that and in how many circumstances? And just finally, how many people will be needed to monitor all of the helpful suggestions that you get through your website about where regulation might be excessive?
PRIME MINISTER:
Ok, well, obviously there will be some monitoring of this website. The website would be useless if it weren't being monitored. But if having a dozen people – and that's a guesstimate of mine – if having a dozen people monitoring this website saves thousands of people endless hours of form-filling, well, that's a very valuable net addition to economic prosperity and progress in this country.
Now, on the question of Regulatory Impact Statements, the former government routinely exempted major measures from the requirement of Regulatory Impact Statements: the carbon tax was exempted from a regulatory impact statement; the National Broadband Network was exempted from a regulatory impact statement; I believe the mining tax was exempted. So far, the only measure that I have exempted from a Regulatory Impact Statement was the repeal of Part Three of the Qantas Sale Act and I did that for two reasons. First, because it was urgent in order to try to help Qantas at a difficult moment. And second, because it's a repeal act. We're getting rid of legislation, we're not adding to legislation. So, I thought that was a perfectly appropriate step to take.
QUESTION:
But in normal circumstances, can I just follow up, in normal circumstances is there a change in when Regulatory Impact Statements are required, other than your inclination towards exemptions?
PRIME MINISTER:
Well, the prime ministerial exemption was routinely provided under the former government. It will almost never be provided under the current government.
Sid?
QUESTION:
Obviously the federal government is only one tier of government. Are you going to take this to COAG and try and drive this down through state and council governments. And also, while I have got you, obviously this is for business but for households, the biggest compliance issue is the tax return. Is there any thought given to getting rid of the tax return perhaps for pay as you go salary earners?
PRIME MINISTER:
Both are fair questions, Sid. I am determined to do my job as well as I can. I am determined that the Federal Government should discharge its responsibilities effectively. I don't want to be one of those prime ministers who spends half his life lecturing the states or lecturing other governments because in the end that can be an excuse for your own poor performance. "Oh, I've done badly because those other people have done badly" or "I haven't done well because those people haven't done well". So, I want the Commonwealth to be a powerfully deregulatory government. I want us to set a fragrant example to other levels of government in this country. I'd rather go before COAG and say "This is what we've done just by way of information and hopefully good example" and then let the states and territories and perhaps local government then say, "Well, that's not a bad idea, let's get cracking ourselves" – that's what I want to do.
Now, on the tax return Sid, look, at this stage, no, but watch this space. As you know, we've got a tax white paper that will be coming out within about 18 months and this is obviously one of the issues that may well be dealt with in that white paper.
QUESTION:
Prime Minister, what level of public accountability will there be with the RISs? Will we be able to see all of them? Will they be able to be FOId?
PRIME MINISTER:
They're Cabinet documents so they will be subject to the ordinary Cabinet processes, but Josh, you might like to add to that.
JOSH FRYDENBERG:
That’s right. The Prime Minister's absolutely right. They form part of a Cabinet submission, but there is also copies of them that will be made publicly available in due course as well. So, you can go to the Office of Best Practice Regulations website and you can find now published RISs which will detail for you after consultation what level of impact it will have in terms of compliance and how those particular figures are given. So, it's a very transparent process. As I said, the Office of Best Practice of Regulation has a degree of independence even though it sits within the Department of Prime Minister and Cabinet. This whole process is driven with one purpose and that's to reduce compliance burdens on families, on businesses and on the not-for-profit sector. So, it's an ongoing process, we're just starting, but we feel like we've had a good start.
QUESTION:
How disappointed are you at the South Australian election result, and do you think your Party needs to do something about its marginal seat campaigning in that State?
PRIME MINISTER:
I'll take that question, but are there any further questions on this particular subject? Phil?
QUESTION:
One more, PM. The billion dollars a year, is that a finite target given you've got a third of them, your target issues from the low-hanging fruit; the carbon tax and so forth? And how many years do you think you’ll be able to find enough regulation?
PRIME MINISTER:
I'm confident that at least for this term of government we can deliver on $1 billion a year of new savings. Ok, any further questions on this?
QUESTION:
Prime Minister, the guide says market value alone is not an argument for government intervention. What are the circumstances you would imagine the Government would be looking to intervene in a given market?
PRIME MINISTER:
Well, I'll offer a general response and Josh may wish to say something as well. One of the real problems with modern governance is that every time some issue arises, it is assumed that there has to be some kind of government response and the government response is invariably a regulatory response. A lot of problems arise because of human error and the best way to deal with it is to resolve not to do it again. Sometimes an important response might not be regulation, it might be resignation – the resignation of the person who has mostly been responsible for the problem, or whose organisation has been responsible for the problem. So, we don't think it is possible to eliminate all risk. We don't think it is possible to wrap human life up in cotton wool so that we never have issues in the future. We have to allow people a certain amount of freedom if we are going to have the kind of progress that we expect. So, every regulation however worthy the purpose has a cost and far too often the cost hasn't been sufficiently countered in recent times. The culture is now changed. We will not regulate without counting the cost and very often the cost will be far too high.
QUESTION:
Can you pledge that there'll be an RIS on your PPL policy? And secondly, Mr Frydenberg, could you just nut out in general how you are going to save a billion dollars over every year for the next three years – just so the public can understand?
PRIME MINISTER:
Yes, there will be a Regulatory Impact Statement on the paid parental leave policy, and at the risk of putting words in Josh’s mouth, we've got $350 million worth of audited, if you like, regulatory savings with the measures that we've already announced. I think you'll find that there is a very big increase in the quantum of savings when we've made the deregulation statement – the cutting red tape statement – on Wednesday and then we've got the various measures that will be dealt with in the Parliament Wednesday week.
QUESTION:
Can I just ask one more about the Regulatory Impact Statements? I assume there was also a Regulatory Impact Statement of your financial advice reforms – the FOFA reforms. Can you explain to us how that would have taken into account the potential impact of not requiring advisers to take the best interests of their clients into account when they're giving financial advice?
PRIME MINISTER:
I'll ask Josh to deal with this, but it is a given of ethical practice if you are a professional that you are taking the best interests of your client, your patient, your customer into account and regulatory burdens around what are ethical givens are, I think, a classic case of regulatory overkill.
JOSH FRYDENBERG:
Well, Lenore as you know, Labor's FOFA laws had a $700 million implementation cost and hundreds of millions of dollars in annual compliance costs. So, what we have said is we are going to tweak effectively the former government's proposals with FOFA to ensure that they have a reduced compliance cost, so a reduction of about $200 million every year as a result of our changes. Now there are three main elements. Obviously there's the fee disclosure part, there's the opt-in and there is the best interest duty and we are maintaining a best interest duty, but we have changed some elements of that. So, we, as the Prime Minister said, fully understand in terms of the best interest duty.
In relation to the question before, what situation would we see that does require regulation? Well, clearly the environmental approval process is a very good example where you do need regulation to ensure that environmental approvals are not just given without due consideration, but what we as a government have said is why should a company have to go through a lengthy process at both the state and the federal level – and one example the BCA documented it took a company more than two years and cost them more than $25 million, it took 4,000 meetings, a 12,000-page report and then when the approval came back it had 1,500 conditions attached – 300 at the federal level, 1,200 at the state level and 8,000 sub-conditions. Now, you cannot expect a company to go through that process when it is looking at other places to invest around the world. We're not the only country in the world that produces iron ore or coal or uranium, for example.
PRIME MINISTER:
Ok, now I might deal with a couple of other issues. First of all, Mark's question about South Australia. Look, a couple of points to make about South Australia. The first is that the Liberal Party's vote at the South Australian election on the weekend is actually up on our vote in the recent federal election. So, this is another strong result when it comes to the people choosing between the Coalition and the ALP.
Sixty-three per cent of South Australians voted for someone other than the Labor Party, so it's hard to see how Mr Shorten can claim this as a vindication of Labor's position.
While I'm on that subject, the Labor Party is claiming that the South Australian election was somehow a referendum on the Federal Government, but the Tasmanian election somehow wasn't a referendum on the Federal Government. Like almost everything that the current Leader of the Opposition says, it just doesn't make sense.
QUESTION:
Prime Minister, there's a lot of industry obviously in South Australia, so given the remarks you just made about the difference between Tasmania and South Australia, there is that manufacturing base in South Australia. Do you accept in any way that the outcome in that state election reflected a judgment by some voters on the pretty hard line you've been taking on industry policy?
PRIME MINISTER:
I just want to stress, if I may, David, that the Liberal Party's two-party preferred outcome was 53 per cent. Now, anywhere other than South Australia or Tasmania, a 53 per cent two-party preferred outcome would give a thumping election win. So I don't want anyone to suggest that it hasn't been a very strong result for the Liberal Party in South Australia. I guess the difficulty is that because of the electoral dynamics of that particular state, 53 per cent of the votes does not necessarily translate into an assured majority. But there's still a lot of votes to be counted in South Australia. Let's wait and see how the remaining 20-odd per cent of the vote impacts on the seats won before we start getting too judgmental.
QUESTION:
Would you like to see the election system in South Australia changed in any way?
PRIME MINISTER:
Look, I'm very reluctant to call for those sorts of changes without very careful consideration. I daresay there's a process in place in South Australia as there is nationally for the relevant parliamentary committee to have a look at the outcome of an election and to make recommendations as to any changes in the mechanics and let's wait and see where that process leads. Lane?
QUESTION:
Can I just ask about the Malaysian plane? Given the fact that the search has switched to the Indian Ocean off our coast, do you know if the Orions have been redeployed or we have been asked by any country for extra assistance?
PRIME MINISTER:
One of our Orions, as I understand it, has been redeployed to the Indian Ocean search. We've got two Orions which have been assisting with the search. They remain available to assist in whatever way the Malaysian authorities wish and it's my intention to talk later today with the Malaysians to see if there's additional help that Australia can offer.
QUESTION:
Prime Minister, are you encouraged by the Nielsen poll that shows 52 per cent of people surveyed support means testing bulk-billing?
PRIME MINISTER:
I'm just very resistant to commenting on polls one way or another, Kieran. I think once you start down that path you're running an endless commentary.
QUESTION:
Prime Minister, just on the Malaysian plane incident, does it concern you at all with regards to regional security that a plane can travel supposedly up to eight hours undetected or detected by some, but that information's not passed on and some of these people are our key allies?
PRIME MINISTER:
I think that there will be a lot of analysis done of this particular event which thus far remains deeply, deeply mysterious and I think there'll be a lot of lessons learnt and I daresay some of those lessons will involve the tracking of aircraft. But at this point, I think it's too soon to speculate. We've had a system which has worked pretty well up until now. We've suddenly had an incident, a terrible incident. It remains a profound mystery as to precisely what happened. Let's, as far as we can, get to the bottom of it and then decide whether there's anything that ought to be done differently.
QUESTION:
Have Australian agencies picked up any of that information, perhaps through the Jindalee station which you might not want to talk about. But has there any information from Australian agencies that suggest that this plane could have come close to Australia?
PRIME MINISTER:
I don't have any information to that effect, but all of our agencies that could possibly help in this area are scouring their data to see if there's anything that they can add to the understanding of this mystery. One more question. Sabra?
QUESTION:
Getting back to South Australia, it's been suggested that the Liberal Party was simply outgunned in its marginal seat campaigning. I want to ask you for your thoughts on that, but also in your book Battlelines you wrote that the biggest problem confronting Australia was the issue of dysfunctional relationships between the Commonwealth and the states. You proposed changing the constitution at the time to give the Commonwealth more power where it shared powers with the states. Is that still your view?
PRIME MINISTER:
Well, Sabra, I think I was asked that very question the very first evening of my leadership of the Liberal Party and of the Coalition, and I said that that view was a function of a particular time and a particular experience. Since becoming leader of the Coalition and in particular since becoming Prime Minister, I've had pretty constructive relationships with the states and what I would like to see happen as I think a more politically viable alternative to the propositions that I put forward in Battlelines is that we should try to see if we can help to make each level of government sovereign in its own sphere, that's the process that we're looking at at the moment, and I'm confident that I will be able to engage in pretty constructive partnerships with most of the states in that area.
Now, as for the marginal seats effort, look, we've taken four seats off the Labor Party. We've taken one seat from an independent. That's a pretty good outcome and we may well do better than that once the remaining 20 per cent or so of the ballots are counted. This has been a very strong result by the Liberal Party in South Australia. I congratulate Steven Marshall and everyone associated with this campaign. We still don't know who will form a government in South Australia and I suspect we won't know for some time because, in the end, it's far from clear whether the Labor Party or the Coalition will end up with 23 seats.
Thanks everyone.
[ends]