Regulations burn holes in pockets

For businesses and households alike, regulations add costs.

Among these is the tiresome process of filling in forms and paying government fees.

But more important is the effect of regulations in preventing firms and individuals from exercising their own preferences to buy, build, work, and sell.

We have actually seen some regulatory relaxations in recent years:  import barriers have been decreased;  we have greater choice with air travel, electricity, banking, telephony and a host of other things we use.

We are far better off as a result of these reforms, which have been driven by National Competition Policy.

This provides federal funding carrots to state governments that remove competition impeding regulations.

Victoria's record in these directions has bettered that of other state governments.

But it will surprise nobody that in spite of deregulation to promote more competition, Victoria's overall level of regulation has continued to rise.

This is because of new regulatory layers on the workplace, to protect the environment and to shelter consumers from the impact of their own decisions.

Examples introduced by the Bracks Government include measures that:

PREVENT the use of modern farming techniques by banning GM food.

REQUIRE expensive energy saving measures for new houses.

REQUIRE businesses to offer more costly long service leave.

IMPEDE the use of Victoria's invaluable coal reserves.

Although they know regulatory expansion is gluing up the economy, to please one interest or another governments are continually driven to introduce new measures.

Their knee-jerk reaction to every issue is to add another chapter to the statute book.

There are, however, some hopeful changes on the horizon.

Recently, the Business Council of Australia and other business groups have announced a more focused assault on the regulatory tumour.

In addition, governments, particularly the Victorian Government have imposed greater anti-regulatory disciplines on themselves.

The Victorian Competition and Efficiency Commission announced last June by Treasurer Brumby raises the bar on new proposals.

It has been staffed by energetic regulatory sceptics and is specifying extra hoops through which new regulatory proposals must jump.

The VCEC has also broken new ground by compiling a dossier of Victorian regulations and the resources they require.

Although incomplete, the dossier runs to some 6400 pages and covers 176 regulatory areas ranging from Accident Compensation Regulations to Wildlife (Whales) Regulations.

It identifies 3565 regulators working for the State Government and this excludes the burgeoning numbers employed in some environmental agencies (which refused to provide their staffing levels) and agencies like VicRoads and Parks Victoria (which combine regulatory and operational functions).

On top of the State Government employees included in the VCEC compilation are many thousands of others working for Victoria's 79 local governments.

Though it has yet to take any regulatory scalps, the VCEC's potential is considerable.

Simply turning the spotlight on regulatory proposals and conducting reviews forces other government agencies to provide solid justifications for them.

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