The Bracks Government's flood of new regulations continues, but a bright spot is Treasurer John Brumby's pledge to cut regulation costs by 25 per cent over five years.
This is a tough goal and recent increases in regulations invite scepticism about its achievability. Measuring the outcome will gauge whether or not government statements are mainly bluster.
To assist in achieving its 25 per cent regulation reduction target, the government has the Victorian Competition and Efficiency Commission (VCEC).
It has armed the VCEC with powers requiring regulatory agencies to justify new laws and progressively review existing ones. As a regulation attack dog, however, VCEC is often over-reliant on information supplied by departments. A case in point is workplace safety where a draft review acquiesces in spurious claims that the building industry needs extensive new regulatory measures which will add thousands of dollars to the cost of a new house.
This week the VCEC released a draft report into food regulations.
Food regulations have been increasing ever since packaged food and eating out started to replace produce fresh from the fields and the abattoirs.
The VCEC reckons food regulations cost suppliers $138 million a year. All of that is passed on to the customer.
In addition, state and local government costs are $32 million.
Indirect costs may be greater. These range from preventing new food varieties, down to inhibiting the volumes of forms that must be filled out preventing sausage sizzles.
The report points to many areas of regulatory excess that are past their use-by date.
Among these is Australia's country of origin labels.
Competitive food suppliers scour the earth looking for the cheapest ingredients. Hence the source of constituent parts of a chocolate bar can vary on a weekly basis. Requiring country of origin labelling inhibits the provision of value to the consumer by restricting producers' flexibility in sourcing inputs.
The VCEC deserves a tick for seeking to cut this one out.
Most food regulations target safety, but it is unlikely that they have had much effect. The fact is that, notwithstanding occasional highly publicised cases of poisoning, food is safer and more wholesome than ever before. And this is not due to the regulations and the associated food inspectorate since the latter are very thin on the ground.
The food we buy is dependable thanks to the self-interest of the retailers and restaurants, which have a vital interest in ensuring food safety -- a single unfortunate event puts them out of business.
With this in mind, the VCEC has some sensible suggestions on simplifying and reducing regulation. One proposal would require government agencies wishing to stop regulatory changes proposed by experts to pay for further assessment costs.
Another potentially far-reaching one would remove regulation from almost all premises selling groceries and perhaps even some restaurants and fast food outlets.
Unfortunately, the recommendations are vague over how this might operate. And they are accompanied by a proposal to enlarge the powers of the food bureaucracy.
This is pandering to nannyist tendencies. Cheap, wholesome and safe food is the result of producers seeking out and meeting consumers' needs. Regulatory measures mainly impede rather than promote this goal.
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