The inaugural meeting of the Business Advisory Forum to the Council of Australian Governments (COAG), convened by the Prime Minister, was held in Canberra today. The Forum was chaired by the Prime Minister and attended by Premiers and Chief Ministers, business CEOs, and representatives of Australia's peak business organisations.
All participants agreed they share a common goal - to improve national productivity growth to boost the prosperity of all Australians - and are committed to working together to secure gains in productivity. Noting the speed of economic change, increasing globalisation and structural shifts in the economy, participants expressed their confidence in the capacity of Australia to address change and secure prosperity.
Members of the Forum reiterated that continual improvements to regulation and competition frameworks are critical contributors to productivity growth. Substantive and effective reforms reduce the costs incurred by business in complying with unnecessary regulation, improve workforce participation and labour mobility and expand Australia's productive capacity. This will help enhance Australia's global competitiveness.
While significant progress on regulatory and competition reform has already been made under COAG's Seamless National Economy agenda, the COAG Business Advisory Forum recognised that a stronger, more coherent compact with business is needed to drive and sustain a national commitment to new reform measures to lift productivity growth.
Business leaders presented detailed analysis and assessment of elements of a competition and regulatory reform agenda, including a discussion paper prepared by the Business Council of Australia, on strategies and initiatives to lower costs to business, improve competition and lift productivity. Business leaders urged COAG to adopt an approach to competition and regulatory reform that: focuses on good policy; declutters the agenda; prioritises the most valuable reforms to improve competitiveness and productivity; and achieve outcomes. COAG members committed to providing a response to the suggestions raised by business before the next Forum meeting.
To meet this challenge, First Ministers and business leaders have endorsed a series of major reform priorities and agreed that COAG tomorrow will be asked to commit formally to a new national productivity-enhancing regulatory and competition reform agenda.
Major Reform Priorities
Participants at the Forum discussed six priority areas for major reform to contribute to national productivity growth. These reform priorities are: national environmental reform; major development approvals; rationalisation of climate change mitigation programs; further energy market reform; development assessments; and best practice approaches to risk based regulation.
Environmental Approvals and Assessments
Environmental protection is an ongoing priority for all governments. However, environmental regulation is often duplicative and cumbersome, resulting in unnecessary delays and uncertainty, slowing broad economic growth.
The Prime Minister, Premiers and Chief Ministers reaffirmed COAG's commitment to address these issues. The Commonwealth and States and Territories will work together to:
* develop bilateral arrangements for accreditation of state assessment and approval processes;
* deliver improved bilateral arrangements with states and territories to fast-track accreditation including through the development of standards; and
* work with jurisdictions to establish inter-jurisdictional taskforces to examine and facilitate removal of unnecessary duplication and reduce business costs for significant projects.
From discussions today, our ambitions are clear: streamlined environmental regulation that delivers strong environmental outcomes and better conditions for business. In delivering these ambitions, the Commonwealth will maintain its capacity for a final approvals responsibility for World Heritage and high risk projects, with a framework to assess risk to be agreed between the Commonwealth and States, including on a bilateral basis. The Prime Minister, Premiers and Chief Ministers will tomorrow discuss at COAG ways to meet and implement the commitment, including timeframes for this work.
Major projects
The Forum acknowledged the steps that States and Territories have already taken to improve the process for approving major projects.
Participants at the Forum discussed the need for all levels of government to streamline the process for approvals of major projects. As a first step, the Prime Minister, Premiers and Chief Ministers tasked the Commonwealth Treasury, in consultation with State and Territory Treasuries, to urgently scope the BCA's proposal to benchmark Australia's major development assessment processes against international best practice in terms of timelines for approvals, cost of administration and compliance and the additional costs arising from conditions imposed on projects, and report back to them within a month.
Premiers and Chief Ministers agreed to examine reforms that could be undertaken at the state level to improve the approval process for major development projects. This will be the focus of discussion at the next Forum, starting with the principles outlined by business.
All levels of Government will work towards a range of additional approaches, including the creation of taskforces for major projects, so that approvals are administered by a single State agency and unnecessary duplication in Commonwealth/State processes is removed.
Ending Duplication in Carbon and Energy Schemes
The Forum also noted that governments have undertaken to prioritise the completion of a review of unnecessary carbon reduction and energy efficiency schemes. In response to business' views, it was recognised that this is a high priority for COAG focus and there is a need to place this work on a faster track and to remove policies and programs that are not complementary to the national carbon price and may be ineffective, inefficient or impose duplicative reporting requirements on business. If any of these policies or programs is retained, jurisdictions committed to reviewing each of these policies or programs to identify if modifications are required.
Energy Pricing
The Forum further acknowledged the need to increase competition in energy markets, including the need to increase the momentum of existing reviews of competition in State and Territory electricity and natural gas markets and to ensure that energy regulation places greater weight on the outcomes for consumers. Commonwealth and State leaders reaffirmed their commitment to this reform process. COAG will discuss bringing forward reviews of state and territory competition in retail electricity and natural gas markets as a key step towards removing retail price regulation.
Development Assessments
The Forum also discussed progress by State and Territory governments on development assessment reforms, and acknowledged the need to ensure these processes operate efficiently and do not create unnecessary delays for development proposals.
Development assessment is a state and territory responsibility, accordingly Premiers and Chief Ministers agreed to take the lead in improving the efficiency of development assessment processes.
Business leaders asked States and Territory governments to adopt ambitious targets to improve the development assessment process noting the strong link to national productivity. Premiers and Chief Ministers agreed to consider this and to report back to the next meeting of the Forum.
Best practice approach to regulation
The Forum emphasised the importance of governments continuing to adopt a proactive approach to improve regulation in order to lower costs to the community and business - including adopting a risk-based approach to regulatory design, implementation, enforcement and review. COAG will discuss concrete measures to lift regulatory performance, including reducing complexity and duplication and increasing transparency and accountability. This would be informed by the current work of the Productivity Commission on the efficiency and quality of Commonwealth, state and territory and COAG Regulation Impact Assessment arrangements, due to be completed in late 2012.
Meeting the red tape challenge
Participants at the Forum agreed to commit to lowering costs for business - particularly small and medium sized enterprises - by identifying unnecessarily burdensome, inefficient or duplicative rules and regulations that impede productivity and economic growth. Accordingly, all Government leaders committed to work individually and collectively, to identify and reduce “nuisance” regulations that may impose unnecessary costs on business, hindering competitiveness and stifling innovation.
The Forum committed to reduce reporting burdens on business and identify ways to remove overlaps in Commonwealth and State reporting obligations and to further expand the use of online business reporting.
In recognition that small to medium enterprises are particularly vulnerable to inappropriate or unnecessary regulations, the Prime Minister will ask the Commonwealth Minister for Small Business to work with the relevant State and Territory Ministers to engage the Small Business Advisory Committee and COSBOA to identify examples of burdensome or unnecessary regulations that frustrate businesses on a day to day basis, and report back to First Ministers. The Prime Minister, Premiers and Chief Ministers also asked business leaders and State chambers of commerce to provide their own examples of inefficient regulation.
The Forum also agreed that COAG would twice yearly examine the suggestions made by business to ensure that initiatives with merit raised under the banner of the “Red Tape Challenge” are addressed promptly.
Delivering on existing reform commitments
The Forum agreed to reconvene in the second half of 2012 to review and assess progress on the new agenda, and ensure that reforms at risk under the current Seamless National Economy agenda are being delivered, in line with the Forum's role as a source of continuing advice to COAG. The Forum emphasised the importance of all governments continuing to deliver the outcomes committed to under the Seamless National Economy agenda.
In addition, the Forum agreed on the particular importance of securing best-practice harmonised occupational health and safety reforms. Reforms under the COAG process commenced in five jurisdictions on 1 January 2012. The Forum also agreed on the need to complete work to enable the creation of national trade licences, to improve the mobility of skilled workers. These two reforms alone would make major inroads into business costs and deliver significant improvements to productivity. The Prime Minister, Premiers and Chief Ministers provided business with an assurance that they would work constructively at the COAG meeting on 13 April and with business, to deliver the reform outcomes which business have strongly endorsed.
A new National Productivity Compact on Regulatory and Competition Reform
The new national productivity-enhancing regulatory and competition reform agenda will be supported by a new National Compact between the Commonwealth and states and territories and business - A National Productivity Compact: Regulatory and Competition Reform for a more Competitive Australia. The new National Productivity Compact will include commitments to:
* continued consultation with business as part of development of the new agenda;
* include in the new agenda measures to ensure the hard won benefits of new national frameworks are sustained over time;
* the regulatory disciplines that business strongly supports, including cost-benefit analysis, to ensure high-value reforms are identified and greater attention is given to reform implementation and enforcement;
* improved governance arrangements to ensure future competition and regulatory reform focus on the delivery of outcomes; and
* improved regulatory processes at all levels of government to stem the emergence of new inter-jurisdictional regulatory burdens.
The Prime Minister, Premiers and Chief Ministers will discuss at COAG a new approach to progress commitments on competition and regulatory reform, involving the establishment of a new inter-jurisdictional Taskforce. This Taskforce will report back on progress to the next meeting of the Forum.