Removing costly red tape from the Australian economy will remain a monumental political struggle until our "regulate first, ask questions later" culture is redressed.
The federal government claimed it cut the costs to business and individuals complying with its rules and regulations by a net $2.5 billion last year during 2015.
This regulatory burden "savings" figure might appear impressive at first glance but, in reality, is far less so when considering a stocktake of commonwealth regulations the year before revealed compliance costs upon the Australian economy totalling some $65 billion.
The staggering costs of regulation are yet to be seriously managed by any major party in government federally, let alone at state and local levels, and this is largely because government regulation is still widely conceived as an effective cure-all for problems, all and sundry.
Consider two recent instances of this phenomenon as cases in point.
It has been claimed by some that more prescriptive regulation is necessary to prevent big business screwing over small business or, putting it more dramatically, that Australians wanting cheap milk are somehow complicit in engineering a misuse of market power.
The Turnbull government recently agreed to incessant National Party demands to amend Section 46 of the Trade Practices Act that would penalise businesses with a "substantial degree" of market power for engaging in conduct with the effect, or likely effect, of substantially lessening market competition.
As many critics of the proposal have pointed out, the proposed so-called "effects test" runs the risk of inadvertently discouraging efficient market conduct because the regulator would find it much more difficult to distinguish between pro-competitive and anti-competitive conduct.
The 2003 Trade Practices Review, chaired by Sir Daryl Dawson, found that "the addition of an effects test would increase the risk of regulatory error" and could discourage competitive conduct in the marketplace for fear of litigation by those whose less efficient operations were weeded out by competition.
The potential economic costs of this measure would be significant, not least because both incumbent firms and potential new entrants are likely to become less certain about whether their own efforts to create greater economic value might fall foul of the effects test.
If businesses do become spooked by the effects test, the certain losers would be the Australian consumer who could've otherwise benefited from product supplies courtesy of more efficient businesses who prevailed in competitive markets.
Another recent proposal on the regulatory policy front, if implemented, would also likely impose major costs upon an Australian economy desperate for more entrepreneurial flair and innovative improvements.
The Australian Securities and Investments Commission has, at least since the middle of last year, been calling upon government ministers to endorse stricter regulations concerning corporate culture, defined in legislation as "an attitude, policy, rule, course of conduct or practice".
It is suggested the culture provisions of the commonwealth Criminal Code Act, allowing a judge to consider whether corporate culture contributed to the "authorisation or permission" of the commission of a criminal act, should be broadened and applied to parts of the Corporations Act especially pertaining to financial services.
ASIC has also suggested its proposed provisions should extend to responsible management, meaning that company directors, officers and managers could be penalised if it is found that corporate culture (or a lack thereof) contributed to an employee breaching the law.
The regulator's call for more restrictions seems to be animated by concerns about several alleged and proven instances of corporate misconduct, but a number of legal experts have raised significant doubts about the workability of more stringent enforcement approaches surrounding a contestable concept such as "corporate culture".
Culture is a broad-based and intangible concept, so it is nigh on impossible to objectively define it for the purposes of imposing legal liabilities without running the risk of flouting time-honoured rule of law principles that rules be applied equally and fairly, and that legal arbitrariness should not apply.
It worries some scholars and experts in corporate law that ASIC's proposals may undermine the principle that a wrongdoing individual in a corporate setting is responsible for a crime committed, rather than that person's manager or a company director standing at arm's length.
As in the case of the trade practices effects test, the likely way in which prescriptive corporate culture regulation would influence behaviour is to further diminish the economic agility of the private sector, only adding to the overall cost of regulation.
These two cases illustrate very clearly why reform-minded politicians, who wish to genuinely reduce the costs of Australia's regulation, have their work cut out for them.
Over the past two decades or so governments have sought to tackle the very real problem of politicisation of regulatory settings by devolving responsibility for regulation design and enforcement to so-called "independent" agencies, such as the Australian Competition and Consumer Commission and ASIC.
But these regulators with inflated powers are themselves imbued with an "action bias" promulgating ever more regulatory proposals in response to politically sensitive matters, such as low milk prices or allegedly bad corporate culture.
And, as noted by James Cooper and William Kovacic in a paper for the Journal of Regulatory Economics, the incentive structure for regulators tends to reward those who adopt more politically expedient policies which are not necessarily welfare-enhancing.
What this implies is that there is still a nagging tendency to overregulate, with scant regard for the enormous, often long-term costs for doing so.
If we want to make red tape reduction a meaningful policy concern, we must fundamentally alter the regulatory culture that seeks to regulate first and ask questions about the efficacy and cost of interventions later.
As individuals we should be more willing to embrace experiments to resolve more of our own problems where we reasonably can, and hopefully online and other technologies that help us interact more easily offers such a prospect.
In our capacities as voters we should elect politicians who favour deregulation as a matter of principle, and ideally have a track record to match, and who disavow regulatory agencies becoming a law unto themselves.
Ushering in such changes will be mightily difficult, but it would only be at those cultural thresholds that we'll be able to dramatically cut the regulatory costs that hold all Australians back.
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