Cutting Red Tape In Project Approvals Can Boost WA Jobs

Western Australia's prospects of becoming the fastest-growing, highest-potential state in Australia after the coronavirus recession was boosted by the commitment of the Commonwealth and McGowan governments to slash red tape for WA's resources sector.

Yesterday, the Commonwealth government confirmed its intention to enter into a bilateral approval agreement with WA under the Environment Protection and Biodiversity Conservation Act 1999.

This would put the WA state government solely in charge of the environmental approvals process, removing unnecessary Commonwealth duplication.

Commonwealth government approvals for big projects currently average 1013 days, or almost three years.  The bilateral agreement could reduce the approval time up to six months, and would help unlock more than $100 billion of development.

This latest initiative builds on momentum developed by the state government to cut red tape.  In 2018, the McGowan government launched a whole of government red tape reduction initiative called Streamline WA.

The initiative has already produced tangible results, such as the establishment of risk-based statutory guidelines for mining proposals and mine closure plans.

The EPBC Act, and green tape more generally, impose significant costs on the Australian economy.

My research released this year found that regulation under the Act has increased by 445% since the year 2000.  With 4,820 individual regulatory restrictions, the Act provides one of the most significant regulatory burdens to WA's most important industry, the resources industry.

According to a recent survey by the Chamber of Minerals and Energy of WA, the resources sector contributed $102 billion of value to WA's economy, including by paying $45.6 billion in wages, in the 2018-19 financial year.

Additionally, the sector directly and indirectly supported 452,229 full-time equivalent jobs in the state ― that's just over a third of total employment in WA.

The resources sector is central to WA in emerging from the COVID-19 lockdown-induced recession.

By reducing the green tape that holds this sector back, Premier Mark McGowan can ensure that WA has the best-performing economy in Australia.

According to the Australian Bureau of Statistics, 73,000 West Australians have lost their job since March and an additional 98,600 people are working fewer hours than usual because there is no work, not enough work, or they have been stood down.

These job losses are both an economic and social tragedy that will have a lasting negative impact on people's lives, from worse mental health to increased likelihood of alcoholism and drug dependency.

The experience from past recessions has demonstrated that the longer people are out of work the harder it is for them to get a job.

While West Australians should be encouraged by the latest move to cut red tape, it is up to the McGowan government to hold its Commonwealth counterparts to their word.

The WA and Commonwealth governments originally finalised a bilateral agreement way back December 2014.

The draft agreement sat in the bottom draw of a bureaucrat's desk until November last year when Mr McGowan revived interest in it, saying that "we need to do everything we can to speed up approvals and bring on these new jobs as a matter of urgency."

Indeed, we do.  But doing so means moving beyond "confirming an intention" to enter into the bilateral agreement, to actually signing that agreement.

Blue-Collar Jobs Are Worthy Too

Labor senator Raff Ciccone's statement at the weekend that "there is dignity in all work" is something mainstream Australians have always understood, and at last the political class appears to have cottoned on.

Ciccone called for an overhaul of state and federal environmental laws to create more blue-collar jobs, and for limitations on legal injunctions — commonly referred to as "lawfare" — launched by activist green groups.

My research estimated that the lawfare provision, section 487 of the Environment Protection and Biodiversity Conservation Act 1999, has put more than $65bn of investment at risk in Australia by holding up major projects such as dams, coalmines and roads in court for a total of 10,100 days since the year 2000.

Much of this investment is concentrated in job-starved regional communities and includes projects from the $16.5bn Adani coalmine in central Queensland to a $30m salmon farm in Tasmania.

Graeme Samuel's confirmation that there is evidence to support the existence of lawfare, which he spoke of in his joint press conference with Environment Minister Sussan Ley on Monday, reflects a growing consensus that jobs must be put ahead of the inflated concerns of noisy, inner-city green groups.

Even former Labor leader Bill Shorten criticised the government's "go-slow" approach to approving major projects, saying on Twitter yesterday that the "ones who miss out are Australians in need of a secure job".

The interim report of the independent review of the EPBC Act, authored by Samuel and released on Monday, also rejected adding "climate change" as a trigger for the EPBC Act.

The climate trigger, long a hobby horse of green activist groups, potentially would have ­required all greenhouse gas-­emitting projects to be approved by the federal environment minister.  This would have constituted the de facto nationalisation of approvals for Australia's resources, transport, agricultural and heavy industrial sectors and the dest­ruction of hundreds of thousands of jobs.

Green groups also were expecting that the review would call for a federal government takeover of even more parts of environmental law.  Instead, jobs again were put first and the report recommended more devolution and decentralisation of authority to state governments — a recommendation the government has already adopted.

Ley said the government would pursue two bold reforms:  to accredit state governments to carry out environmental assessments and approvals on the federal government's behalf, and to explore market-based solutions to habitat rehabilitation.

The move to accredited state governments will substantially reduce duplication and sometimes contradictory regulatory requirements between the state and federal governments, and signals a shift away from Canberra's failed command-and-control approach to regulation.

Seeking market-based reforms to environmental conservations, meanwhile, has long been advocated by organisations such as the government's independent think tank, the Productivity Commission, to attain environmental outcomes with more flexibility and at less cost.

For example, the commission noted in its 2016 Regulation of Australian Agriculture report that "better use could be made of market-based approaches to native vegetation and biodiversity conservation at times".

The fact these two initiatives were announced on the same day as the release of an interim, rather than final, report indicates that the government is starting to understand how important job creation will be to Australia's recovery from the pandemic.

Between March and June, 815,000 jobs had been lost because of the COVID-19 social distancing regulations introduced by federal and state governments.  And while the official unemployment rate is 7.4 per cent, the real rate is 11.7 per cent once those who have on net left the labour market since March and those working zero hours are added.

Young Australians have been affected disproportionably by the lockdown measures, with 355,000 15 to 24-year-olds not in full-time education and not working, the equivalent to 29.6 per cent.  This is up from 22.3 per cent in March.

Getting Australians back into work will be the most important factor in economic and social recovery.  Mass unemployment is not only an economic problem, it is also a humanitarian tragedy.

Work is the epicentre of a good and flourishing life.  Those who work are more likely to own their own home, participate in their community and send their kids to good schools.  They are also likely to have far superior physiological and psychological health outcomes, and are less likely to become dependent on drugs and ­alcohol, or to commit crimes and to be in jail.

Losing your job because of coronavirus is one thing.  But missing out on the dignity of work because a small group of inner-city, university-credentialed elitists look down on blue-collar jobs and manual labour is not who most Australians are.

Parts of the interim report raise concerns.  The suggestion that ­project actions "must deliver a net gain for critically endangered species habitat and ecological community distribution" is vague and inviting itself to be used as a mechanism for throwing spanners in the works, while the proposed adoption of federal government-enforced national environmental standards could result in a bureaucratic and lawyer-infested investment quagmire.  These issues can be ironed out.

By putting jobs for mainstream Australians ahead of the boutique concerns of noisy activists, the government has a unique opportunity to develop a much needed pro-worker and pro-jobs economic recovery strategy.

Building Plan Could Fall Over

The HomeBuilder scheme announced by Prime Minister Scott Morrison has a worthy objective but we have to be careful it doesn't become a hand-out to the big banks and they don't forget that red tape is the biggest roadblock for Australia's construction sector.

The scheme HomeBuilder provides eligible owner-occupiers with a grant of $25,000 to build a new home or substantially renovate an existing home.  The government claims HomeBuilder will assist the residential construction market by encouraging the start of new home builds and renovations.

But as is the case with all government policy, it is important to check the fine print.  No individual earning over $125,000 or couple earning over $200,000 can access this scheme.  And the minimum cost of the renovation to be eligible for the $25,000 grant is a whopping $150,000.

It would be surprising if any individual on under $125,000 a year or couple earning under $200,000 has more than their entire annual salary lying around to spend on a home renovation to even be eligible.

To access this scheme, the practical consequence for many Australians could be, in order to access the payment of $25,000, they will increase their mortgage and pay more than the grant amount in interest.

While deliberately targeted at middle Australia, by design it may only saddle them with more debt to build a granny flat.

These rules are symbolic of the red tape that actually slows down Australia's home renovations and housing construction sector.

A superior "job creation" scheme would be cutting red and green tape that tangles basic home renovations and developments of new homes and apartments.

NIMBY councils in our major cities have not only blocked all sensible high-density development in the inner city where public transport infrastructure is readily available, but also opposed unlocking land in green wedges in our cities.

Permits for basic renovations can get tied up in council approval processes for years sometimes.

This red tape is compounded by direct costs governments place on landowners through taxation, planning red tape and stamp duty.

Scott Morrison should commit to slash construction red tape;  he could use the new National Cabinet process to get the states to the table on the issue of planning red tape and stamp duty.

Cut Red Tape, Green Tape And Taxes ― As Only The Private Sector Can Get Us Out Of Recession

All eyes were on the headline economic growth figure in the national accounts released on Wednesday, which shows the first quarter of negative growth since 2011.  Despite the government claiming that the economy was in good health before COVID-19 arrived in Australia, upsetting 29 years of continuous economic growth, the truth is that the economy has been in the doldrums for quite some time.

Long before the lockdown measures to prevent the spread of COVID-19 were introduced, private sector wages were stagnant, job creation was at a crawl and there were fewer businesses per capita compared with a decade ago.  Underemployment, where workers have a job but not enough hours, has been steadily rising and has not been below eight per cent at any time in the past six years.  Youth unemployment, which spiked to almost 20 per cent in the wake of the 1990-91 recession and steadily trended down to 7.6 per cent in August 2008, has averaged 12.1 per cent since the global financial crisis.

These are signs of a sick economy with weak foundations.  While the political class like to boast about economic abstractions that support their narrative, like GDP growth, this means little to ordinary Australians who are struggling to find work, or to get a pay rise to save for their first home.

Looking past the headline figure of the economy contracting by 0.3 per cent, the national accounts released by the Australian Bureau of Statistics offer some insight into Australia's economic malaise.

Australia is experiencing the longest-run decline in new private sector business investment on record.  For almost seven years, business investment has been trending downward.  And the only reason that the trend didn't start earlier is that the mining boom offset declining investment seen elsewhere in the economy.

The Morrison government has consistently failed to mention that along with a record streak of economic growth, they were overseeing a record decline in business investment.  In the first three months of 2020 business investment fell to 10.8 per cent of GDP.  For context, the lowest level ever recorded was 10.2 per cent of GDP following the 1990-91 recession, and the average level during the economically-hostile Whitlam years was 13.7 per cent of GDP.

This is a serious structural issue.  Business investment is what creates more and higher-paying jobs and improves productivity.  There will be no economic recovery without improved business investment.

There is plenty the Morrison government can do to address this issue.

For a start, they should cut red and green tape and slash the company tax rate.

Red tape costs $176 billion each and every year, according to my research.  Every dollar spent on this excessive burden is diverted away from productive uses, such as hiring a new employee or investing in new equipment.  And as my research published earlier this year has shown, green tape has put at risk over $65 billion of investment since the year 2000.  The red and green tape burden is self-inflicted economic harm Australia can no longer afford.

Australia has the second-highest business tax rate in the OECD at 30 per cent, well above the average rate of 23.6 per cent across the group of 37 countries.  An internationally-competitive business tax rate below 20 per cent will attract business investment, which leads to more jobs and higher wages.  And lowering the tax rate will reward entrepreneurial Australians who put everything on the line to start a small business, which will be vital in the post-lockdown economy where private sector business creation will lead the recovery.

As the job-crushing lockdown restrictions are eased, policy settings need to be geared towards creating a prosperous and dynamic economy.  This means unleashing the private sector, which is responsible for about 80 per cent of economic activity.  Getting Australians back into work is the number one priority, and only the private sector can do this.

Not Kean On Climate Plan

The only excuse energy minister Matt Kean could have for recklessly forging ahead with the hard-line policy of net-zero emissions in NSW by 2050 is that he missed the latest jobs report showing 320,000 jobs in NSW had been destroyed since the coronavirus lockdown measures started in March.

The extent of the job losses are the worst in the nation.

At the same time as businesses are shutting and Australians are losing their jobs in numbers never seen before, a senior minister in Australia's largest state apparently has nothing more to offer than mandating that 30 per cent of all new government vehicles be electric or hybrid in three years' time.

And many would be wondering why at a time when getting into and out of the city on public transport is almost impossible due to social distancing, the energy minister would suggest making 8000 of Sydney's buses electric.

At least Treasurer Dominic Perrottet appears alive to the issue, with his proposal to freeze the pay of public servants for a year and for the $3 billion in savings to be reinvested into job creating projects to help get NSW back to work.

The plan to mandate the electrification of NSW government fleet vehicles is being undertaken to help NSW reach its goal of net zero carbon emissions by 2050, which includes the interim aim of a 35 per cent cut to emissions by 2030 on 2005 levels.

This goal is reckless and goes beyond even what the federal government committed to in 2015 when it signed Australia up to the Paris Climate Agreement.

Under that agreement, Australia must cut its emissions by 28 per cent by 2030 ― which are already the deepest cuts to emissions per capita in the developed world.

At the same time, China, which is the world's largest emitter of greenhouse gases, is completely uncontained by the Paris Climate Agreement and is expected to increase its emission by some 1454 per cent.

As the Senator for Queensland and former resources minister, Matt Canavan argued in The Australian on May 27:  "We should end our participation in the Paris Agreement, given the more immediate need to secure our manufacturing jobs."

But even Mr Keane's own climate strategy document Net Zero Plan Stage 1:  2020-2030 shows that electric vehicle technology and more renewable energy generation are dud policies.

According to the document, the plan will create just 240 jobs each year for a decade at a cost of $2 billion.  That is more than $830,000 per job.

In any event, the number of jobs created is peanuts compared to the number of jobs that are likely to be destroyed through higher electricity prices which inevitably result when more wind and solar are brought onto the electricity grid at the expense of coal.

About 42,000 jobs have been lost in the energy intensive manufacturing sector in NSW since the year 2000 when the commonwealth government first introduced the Renewable Energy Target, which drove more wind and solar onto the energy grid.

Over the time electricity prices have risen by a staggering 237 per cent, or 12 per cent per year, which is four times the rate of economy-wide inflation in NSW.

A report prepared by consulting form Frontier Economics for the government agency NSW Coal Innovation estimated that electricity prices could jump by 15 per cent if there was to be greater emphasis on renewable energy, such as that outlined by the energy minister.

What this means for the future of manufacturing in NSW, or the 75,000 jobs dependent on the coal sector, Mr Kean does not say.

All of this at a time when the unnecessarily prolonged and exaggerated COVID-19 lockdown measures, which continue to force Australians out of business and out of work, remain in place.

In terms of electric vehicles, the mainstream of NSW has already had their say, and they said they don't want them.  Again, according to Mr Keane's own analysis just 47,000 motorists in NSW have "opted for an electric or hybrid vehicle" out of a total of 5.2 million vehicles.  This is even though electric vehicle battery prices have also fallen by more than 85 per cent since 2010.

The fact remains that none of the policies will make any noticeable difference to the global climate or the global temperature ― much less weather and climatic conditions in NSW.

Humans account for 1.3 per cent of carbon emissions around the world.  And NSW accounts for a quarter of Australia's total emissions.

This means that NSW contributes just 0.000075 per cent of global human greenhouse gas emissions.

Many Australians have largely accepted the need for extraordinary government measures to stop the spread of coronavirus which have resulted in job losses and business closures.

But mainstream Australians living in the suburbs, outer suburbs, and regions want to get back to work and to see small businesses up and running again.  Not just because of the financial independence that work and business formation bring, but because of the dignity and self-sufficiency that they enable.

Not only does this mean freezing ― and ideally reducing ― public sector pay and reinvesting the savings in job-creating private sector projects, but it means reducing red and green tape, cutting taxes, and, most importantly, getting electricity prices down to support job creation and small businesses.

Red Tape Holds Back Growth

The WA state government is leading the way for a post-lockdown recovery based on slashing business-crushing red tape to support small businesses.  Premier McGowan's moves to make it easier for certain businesses to change how they use their premises and streamline the process for single development applications are welcome.  However, the Government can and must go further in cutting red tape to make WA an economic powerhouse in the wake of the devastating lockdown which has smashed the productive private economy.

Red tape imposes an enormous burden, reducing economic output to the tune of $176 billion across Australian each year.  While this is a dangerous handbrake on prosperity, it is also a serious moral issue.  By preventing people from starting new businesses, innovating new products and creating opportunities for themselves and their families, red tape stifles the aspirational spirit that drives so many West Australians.

My recent analysis estimated that the private sector has been crippled by the coronavirus lockdowns, while the public sector remains relatively unscathed.  Jobs in the private sector have decreased by 7.7 per cent since the middle of March while the public sector has seen only a 1.7 per cent decline.

Despite politicians insisting that "we are all in this together", their pay and hours remain the same while 1.3 million people have had to work fewer hours and another 900,000 have lost their jobs entirely, according to data from the Australian Bureau of Statistics.

This environment, where the private sector is punished while the public sector remains unscathed, cannot be maintained if there is to be an economic recovery.  The private sector accounts for 80 per cent of economic activity, and it is only by taxing this activity that we can afford public services such as roads, schools, and hospitals ― including ICUs for coronavirus patients.  The number one priority must be maximising this wealth creation, and slashing red tape is one of the best ways to do this.

The link between red tape and economic prosperity is clear.  Cutting red tape allows for more businesses, more jobs, and higher wages.  It allows people to experience the dignity of work, and encourages people to be enterprising by reducing unnecessary compliance costs.  Most importantly, red tape disproportionately impacts small businesses, so cutting red tape will provide a boon to sole traders and family-run businesses across WA.

Small businesses are vital to the West Australian economy.  According to the most recent data from the ABS, there are 226,416 small businesses in WA.  At least there were before the lockdown started in March.

Creating new businesses is essential to the economic recovery.  Small businesses don't just provide an income to their owners and employees, they provide a sense of community and a ladder to prosperity.

WA has been incredibly successful in containing COVID-19, and has done so without carelessly treading on freedoms as the Eastern States so willingly did.  The WA government should quickly lift the remaining restrictions on businesses, while maintaining social distancing and hygiene requirements.

After allowing all businesses to reopen, Mr McGowan must slash red tape.  The tentative steps taken in this direction are encouraging, but there is no shortage of overzealous regulation that can be discarded.  WA has 107,812 individual regulations on the books, according my analysis published last year.

Food truck owners who want to set up at the local park or do the rounds of the suburbs are simply not allowed to do so.  They can only serve customers in registered areas and at certain events, all of which have been cancelled.

Chauffeurs who have seen their bookings drop by 80 per cent or more are still required to pay 10 per cent of every fare to the government's taxi plate buy-back scheme.  And that's in addition to GST.

And when a Perth surgeon wanted to start an intimate, high-end wine bar on William Street, he was forced to spend upwards of $12,000 on communicating with police about his liquor license.

This kind of onerous and petty red tape is simply unaffordable in the post-COVID-19 economy.

Mr McGowan must set an example for his Eastern States peers.  By slashing red tape, the Government will allow West Australians to create a bonanza state once again.

Voice Of Small Business Is Silent On The COVID-19 Commission

Senator Michaelia Cash is the Minister for Employment, Skills, Small and Family Business in the Morrison government.  It's one thing for a minister to have such a title.  It's another thing entirely for the government to take that title seriously.

It might have been that the minister was absent when the Morrison government was busy selecting the members of its National COVID-19 Coordination Commission.

The commission was announced by the Prime Minister in March and it has six commissioners.  Its task is to "ensure the government receives the most comprehensive advice to meet the challenges ahead to cushion the economic impact of the coronarvirus and help build a bridge to recovery".

The commissioners, by virtue of their role, are now some of the most powerful people in the country.  They're advising the government on nothing less than the future of the Australian economy.  And when you design an economy, you design a society.

The six commissioners are Nev Power, who was chief executive of Fortescue Metals Group;  David Thodey, who was chief executive of Telstra;  Greg Combet, who was secretary of the ACTU and a minister in the Rudd and Gillard Labor governments;  Jane Halton, a career public servant;  Paul Little, who was managing director of Toll Holdings;  and Catherine Tanna, who is managing director of an energy company.

That's four commissioners from big business, one from the public service, and one from both the trade union movement and the Labor Party.

Missing from the commission is the voice of the sector that accounts for one-third of the economy, that provides more than 40 per cent of the jobs in the private sector, and that is the foundation of a free enterprise economy.  That voice, of course, is that of small business.

It is small business and the families of the owners of small businesses ― not big business and not the public service ― that are bearing the brunt of the government-imposed shutdown of the economy.  Seventy per cent of small businesses are family-owned.

My analysis of Australian Bureau of Statistics data shows that over the past three months jobs in the private sector have been lost at 4½ times the rate of job losses in the public sector.  Most of those lost jobs will have been from small business.

In fact the government is doing everything it can to ensure public servants are untouched by what's happening in the rest of the economy.

Although nearly 75 per cent of Australians support pay cuts for politicians and public servants earning more than $150,000, the Prime Minister has categorically ruled out any such reduction.  The biggest sacrifice Scott Morrison has offered is to delay pay rises for some public servants.

It's incredible that a perspective from the sector that employs 4.5 million Australians (or at least did until March) is not represented on the commission.

If and when the unemployment rate reaches 10 per cent or more, the vast majority of those who will have lost their jobs will be small business employees.  By the end of March, approximately 8 per cent of small businesses had already stopped trading because of COVID-19 restrictions, while 61 per cent of small businesses have applied, or will apply, for wage subsidies from the government.

The Australian economy won't recuperate and employment will not grow in any meaningful way until small business recovers from the economic shutdown.  The future of small business should be front and centre of the government's attention, not an afterthought ― if that.

It's frightening to contemplate, but maybe what happened is that those who picked the commissioners thought if you're deciding how to save the Australian economy, the only people you need an opinion from are those who inhabit the cosy club of the Qantas Chairman's Lounge:  big business bosses, public servants, and former union officials and Labor politicians.

It is revealing these are the sort of people the Morrison government picked to advise it.

Presumably, no one in the Coalition thought to ask the cafe owner in Parramatta who has just laid off all their staff, shut their business and lost their livelihood, whether they would like to be on the National COVID-19 Coordination Commission.

This Silent Deregulation Must Become A Pillar Of Recovery

The government has hurriedly dumped a large number of costly business rules.  Why would we now want to bring them back?

The COVID-19 pandemic has seen a massive expansion of the power of the state ― heavy-handed police action and huge increases in government spending are just the most obvious.

But at the same time, the crisis has also seen a major retreat of state power in other areas ― a wave of deregulation across the economy that has almost no historical parallel.  And these regulatory reforms offer us a path back to prosperity.

The most obvious regulatory reductions have been on the medical frontline.  Some controls over the production and use of medical face masks, ventilators, virus testing and pathology have been relaxed.  Supervision requirements have been reduced for nurses re-entering the workforce.  Regulations have been eased to allow distilleries to produce alcohol-based hand sanitiser.

But the most consequential deregulations have been intended to keep the economy afloat.  Night-time curfews on delivery trucks have been lifted to ensure supermarkets can be more easily restocked, and trading and operating hours restrictions for essential retail have been eliminated.  Liquor licensing has been relaxed to allow restaurants and bars to do home-delivered alcohol.  Construction work can now be done on weekends and public holidays to make up for productivity losses that might come from trying to build while social distancing.

Other reforms have involved the government relaxing its most burdensome regulations.  The Australian Prudential Regulatory Authority has eased capital requirements on banks.  The Australian Competition and Consumer Commission is reducing its enforcement and surveillance program, announcing that it would now "carefully consider the impact on businesses already under pressure" (this is great, but at the same time reveals a lot about their attitude before the pandemic).

The Australian Securities and Investment Commission has even put a hold on the program that embeds bureaucrats in private companies.  This is the program introduced after the financial services royal commission that has government-appointed psychologists observing the ethical standards of senior management.  It was widely derided as "shrinks in the boardroom" ― and it is no longer active because of COVID-19.

THE RULES WE DIDN'T NEED

Even more astonishingly, the communications regulator has suspended Australian content requirements on commercial television and pay TV.  It would be hard to nominate a more heavily defended and politically sensitive bunch of regulations.  And they have now been shelved with almost no comment.

For the past two decades Australian governments have repeatedly announced red tape reduction programs.  Regulatory reform has been a major plank of the Coalition government's agenda.  It was a major plank of the Labor government before it.  But none of those heavily promoted programs have had as much scope and scale as the COVID-19 deregulations.

Those earlier red tape reduction programs focused on the sorts of regulations that nobody was interested in defending.  They tended to eliminate lots of minor rules rather than significant ones.  The guiding principle has been quantity not quality.  Ultimately they were less major economic reform and more tidying up the statute books.

But this time is different.  The regulations that have been suspended are precisely those that are most burdensome.  They are the rules that are most costly to comply with but also least essential to support a functioning economy.

In other words, they are the rules that governments worried about the effect of over-regulation on productivity and economic growth should be very reluctant to reinstate.

This is the conversation to have now.  The pandemic is moving from urgent crisis stage to risk-management stage.  The Reserve Bank governor warns that we are looking at the greatest hit to the economy since the Great Depression.  We need to start thinking about what policy settings will be able to revive the relative prosperity we enjoyed at the end of 2019 ― and pay for all the spending that the government has committed to.

DEREGULATIONS MUST STAY

Making these temporary deregulations permanent should be one of the pillars of recovery.  We cannot assume that the economy will happily bounce back once social distancing controls are lifted.  The damage inflicted by the shutdown on business models and supply chains has made this naïve hope impossible.  The economy needs to adapt to the post-pandemic world ― quickly.  Regulations that prevent this rapid adaptation or prevent firms from establishing new sustainable business models need to be culled.

In a 2016 paper published in the European Journal of Political Economy, the economist Christian Bjørnskov looked at how economic freedom (that is, low taxes and minimal regulation) affected how different countries performed during an economic crisis.  He found that how heavily a country was regulated predicted how quickly it recovered from crisis ― the less regulation, the quicker the recovery.

A lot of the growth in government is likely to survive after the COVID-19 pandemic.  It will be politically hard to abolish free childcare or to return Newstart payments to where they were.  But we're going to need a much more productive and prosperous economy to pay for it all.  So the deregulations done during the crisis should be locked in too.  And the principles that have been established during this crisis ― that many politically popular regulations make it hard for businesses to adapt to unexpected circumstances and keep people employed ― will be needed to guide our policymakers when they return.

As Scott Morrison has said, all workers are essential.  But not all regulations are.

How Red Tape is Compounding The Coronavirus Commerce Crisis

Red tape is exacerbating the economic fallout brought on by the coronavirus crisis by making it more difficult for businesses to adjust to changing circumstances.

While no one could foresee the outbreak of a global pandemic, politicians and bureaucrats have willingly ignored the red tape crisis for years.

Red tape increases the likelihood of economic crises, deepens these crises when they occur, and prevents a quick economic recovery.

Red tape makes the economy more susceptible to economic shocks by putting unnecessary pressure on businesses even during the good times.  Many businesses, especially small and family-owned ones, run on very slim margins which are made even slimmer by unnecessary compliance obligations.  When a crisis hits and cash flow slows, red tape diverts resources away from recovery and toward compliance.

During a crisis red tape prevents businesses from responding in the most effective way.  Rather than adapting their business model or innovating to respond to the changing needs of consumers, some businesses are left with no choice but to shut down.  This creates enormous stress for owners, with many small business owners risking their family home used as collateral for business loans, and for employees who are now out of the job.

And red tape acts as a handbrake on economic recovery by adding to the cost of starting new businesses and employing new staff.

Three recent examples demonstrate how red tape is making the current economic crisis worse.

Food truck owners in Western Australia have warned that they are likely to lose their livelihoods as their entire calendars are cancelled in order to comply with the federal government's limit on the size of gatherings.  To respond, food truck owners want the freedom to serve food in alternative settings.  Cafes and restaurants have been allowed to respond to the lock-downs announced over the weekend by providing takeaway or delivery options.  Excessive compliance obligations, however, prevent food trucks from adapting in a similar manner.

Food trucks must be registered under the WA Food Act 2008, with the council where the truck is stored, and with each council they wish to operate in.  Each of these registrations requires submitting a form (usually around five pages long), providing supporting documents such as a floor plan and evidence of the truck's registration with the council it is garaged in, and paying a fee.  These forms typically take around 10 days each to process and once approved food trucks can only be operated in specified areas of each council.

Sandra Bahbah, who owns a Perth-based food truck, explained to WAToday, "This is going to be a disaster for the industry.  A lot of [businesses] will fail because they won't be able to afford the hit".

Supermarket operators want to respond to rapidly escalating demand by restocking outside of the usual hours so that the shelves can be full for customers the following day.  But rules which prohibit supermarkets from making deliveries outside of strict timeframes prevent this stocking from occurring.  These timeframes vary from council to council, and between different supermarkets within each council.  Russell Zimmerman, executive director of the Australian Retailers Association, explained the situation to The Australian earlier this month, saying "If we could get those trucks into those retail stores at other times beyond the curfew times [typically 7am to 10pm], there is a huge opportunity to get the stocks into the shelves so that people would then realise that the stock is there".  Fortunately, some states have acted on this, but there is much more to do.

Section 487 of the Environment Protection and Biodiversity Conservation Act 1999 allows activists to engage in "lawfare" to delay and disrupt major development projects.  My recent research estimated that this has put $65 billion of investment at risk since the year 2000 by holding up projects in court for a cumulative 10,100 days.  Section 487 has placed a significant burden on the economy, but it does not improve environmental outcomes.  I have demonstrated that 94 per cent of cases brought about through it have not resulted in substantial changes to the original project proposal.

These three examples illustrate the broader cost of red tape which I have estimated to be $176 billion each year.  This cost captures of all the businesses never started, the pay rises never given, and the hours spent complying with the edicts of unelected bureaucrats rather than training new employees and running a successful business.

This red tape burden is one of the key causes of Australia's weak economic foundations.  New private sector business investment is only 10.9 per cent of GDP.  This is the lowest level since the last recession in 1990-91 and is even lower than the average rate in the turbulent times under the Whitlam government.

Low business investment is caused by excessive red tape, an inflexible labour market, and a corporate tax rate that towers above the OECD average.

No matter how quickly or slowly the coronavirus crisis passes, these structural issues must be addressed.

Governments at the local, state, and commonwealth level must cut red tape to lessen the severity of the forthcoming economic crisis, and enable a quicker recovery where businesses can open and people can get back into work.

Coronavirus Pain Must Be Shared Around

The economic and social burden of the government-imposed sanctions to manage the health crisis must be shared equally with the public sector, which so far has remained shielded from the fallout while thousands of small businesses, sole traders and tradies go to the wall.

Seven modest measures to cut inefficient and wasteful government spending worth $30bn could be redirected to help fund the commonwealth government economic recovery packages, which assuming an annual salary of $80,000 could save 375,000 jobs.

Inefficient and wasteful spending is any dollar the commonwealth government is spending that does not meet the objectives set out by Scott Morrison of keeping Australians in a job and businesses operating.

Public servants on average have higher wages and higher superannuation contributions than private sector workers in Australia.  This is unacceptable in good times but unconscionable in the middle of economic and social Armageddon.

According to the Australian Bureau of Statistics, average weekly private sector earnings are 20 per cent lower than in the public sector, implying a $4.4bn annual commonwealth public service wage premium (20 per cent of the total commonwealth public sector wage bill of $22.12bn).

Commonwealth public servants also receive at least 15.4 per cent superannuation, compared with 9.5 per cent for private sector workers, implying a $1.3bn annual commonwealth public service superannuation premium.

The combined premium is $5.7bn, which (at an annual salary of $80,000) would be equivalent to 71,250 jobs.

Scandalously, according to the Australian Public Service Commissioner's 2018 Remuneration Report, one executive level 2 employee — which is the equivalent to a middle manager who might manage five staff — received $934,612 in 2018.  This included an eye-watering "retention bonus" of $91,196, which is higher than Australia's median salary.

No one in the public service should be receiving a productivity or retention bonus until the crisis is over and the unemployment rate drops below 5 per cent.

According to the APSC's report, the average "benefit" component — sign-on, productivity, retention and performance bonuses — of public sector salaries is 15 per cent.  Removing this and keeping the remaining 85 per cent base salary would net $3.3bn, or 41,250 jobs.

The Clean Energy Finance Corporation oversees $10bn of investment in clean power that has done little other than give Australia the fourth highest electricity prices in the world.  This is the equivalent 125,000 jobs.

The government provided a one-off grant of $444m to the Great Barrier Reef Authority in 2018 when the authority had only six full-time members.  This grant should be recalled, to the value of 5500 jobs.

The ABC's property portfolios in Brisbane, Sydney, and Melbourne are worth about $522m.  Having the public broadcaster lease premises while selling these would help save more than 6000 jobs.

Selling the National Broadband Network could retrieve just less than $10bn, according to the Parliamentary Budget Office, the equivalent to a further 125,000 jobs.

These are more than just numbers.  These are lives and livelihoods.

Every effort must be made to keep Australians in their jobs.  A job and a life are more valuable than a windmill or a solar panel, or the ability for a retired public service employee to play golf three times a week instead of twice.

The longer someone is unemployed, the harder it is to get back into work.

Maintaining the relationship between workers and their employers will play the most important role in the nation's recovery.

Yes, many will rely on unemployment benefits.  But more than a few of those who now enter the queues outside Centrelink will never work again.  The bureaucrats and experts who are re-engineering our society and economy but who themselves might never stand in an unemployment line seem less than fully aware of this stark fact.

The financial costs of unemployment are obvious.  But the social, cultural and psychological costs are substantial and, in many cases, permanent.

A job is more than a pay cheque;  it is source of meaning, dignity and self-sufficiency.  People who do not work are often unable to afford their own home, involve themselves in their communities or build a family.  The impacts of joblessness can be felt for generations, as the children of the unemployed fall behind at school and must endure the domestic pressures associated with that loss of income.  Some might even come to the conclusion that they have little to live for and nothing to offer the world.

Equality of sacrifice is required to get Australia through this unprecedented challenge.  We must all dig in.

A Simple Stimulus Step That Won't Cost A Cent: Stop Green Lawfare

Over $65 billion of investment, mostly in regional Australia, has been put at risk by a small group of environmental and inner-city activists who have exploited a special legal provision to engage in frivolous and vexatious legal activism without delivering a discernible environmental benefit.

Research recently released found that green groups such as the Australian Conservation Foundation and the Wilderness Society have used a legal provision in Commonwealth environmental law to hold up major projects in court for a cumulative total of 10,100 days since the year 2000.

Section 487 of the Environment Protection and Biodiversity Conservation Act specifically empowers green groups to challenge projects that have been approved by the federal environment minister.

With Australia facing the economic impact of coronavirus, it is now more important than ever to remove barriers to investment.

Since 2000 there have been 28 projects targeted through this provision, including coal mines, dams, vegetation management, and public infrastructure.  Prominent projects include the original $16.5 billion Adani coal mine, a $2.3 billion pulp mill in Tasmania, and a $767 million coal mine at Maules Creek in New South Wales.

Despite the costly delays, the vast majority of these cases have not led to environmental improvements.  According to my research, only three out of 51 cases since 2000 ― or six per cent ― have resulted in significant changes to environmental approvals.

The success of legal challenges is not the primary concern of green groups.  Their aim, as outlined in the 2011 Greenpeace document Stopping the Australian Coal Export Boom is to "stop projects outright", "increase costs", and "raise investor uncertainty".  By holding up projects in court, even without winning the case, they deter investment in the resources sector with the prospect of costly delays and increased legal risk.

For investors in the resources industry, the punishment is in the process.

The pursuit of environmental ends with no consideration of costs or care for those forced to bear those costs is characteristic of the green movement.

The movement is based largely in the inner cities, far away from those Australians who their policy prescriptions hurt the most.  In the 2019 federal election, over 80 per cent of the Greens' primary vote came from non-rural electorates, and their share of the vote was twice as high in the inner city compared to regional Australia.

Mining projects have been opposed at the cost of jobs in regional Australia and to the detriment of regional communities.  Continued restrictions on logging are destroying a once vibrant forestry industry.  Farmers suffering through severe drought have been forced to sit by hopelessly as they watch an abundance of water flow by out to sea due to onerous restrictions on irrigation and red tape preventing the construction of industry saving dams.

Landowners have faced hundreds of thousands of dollars in fines for the crime of trying to save their homes from bushfire by clearing trees.  For example, a Queensland grazier was fined $1 million in 2017 for clearing a fire break on his property previously ravaged by bushfire.  Fires have raged at a ferocity enabled by an abundance of fuel that environmentalists have ensured has not been adequately managed.

And of course, the green movement has opposed coal and gas generated power that delivers affordable and reliable energy.  A jump in electricity and gas prices may not be felt as strongly by Green voters who have a median household income $14,000 higher than the general public, according to research from Roy Morgan.  But for many people it is the difference between their small business turning a profit, being able to spend money on the kids, or the ability to heat their homes in winter.

Many of these struggles are simply not felt by inner-city elites.  It is all too easy to advocate "action on climate change" and radical environmental policies when you are not the one bearing the cost.

The resources and agriculture sectors are an integral part of the Australian economy and the lifeblood of regional Australia.  They represent 20 per cent of private capital investment and 75 per cent of the value of Australia's top 25 exports.  Outside the big cities, agriculture and mining are major employers and support the services and retail sectors that are built up around them.

While all Australians want positive environmental outcomes, duplicated layers of complex regulation combined with legal activism are imposing an unnecessary burden on regional Australia for no discernible environmental gain.

Green activism, enabled and emboldened by lax legal loopholes, poses an existential threat to the resources sector, regional communities, and the Australian way of life.  Repealing Section 487 should be the first step in reining in the excesses of the green movement.

Economic Zone Can Be Boost For North

Making Northern Australia a special economic zone with low taxes and less red tape, and devolving governance away from Canberra to regional hubs such the Kimberly, will deliver an economic boom and make Australia safer.

According to a report earlier this month, the Government is planning to strengthen Australia's engagement with India and Southeast Asia, in part to reduce Australia's economic dependence on China.  The rise of China over the past two decades has generated many benefits for the Australian economy, particularly in the resources sector.  Increased demand for commodity exports from Australia has driven investment, job creation, and supported the growth of regional communities.

However, this has come at the cost of a growing dependence on the Communist dictatorship which, if not managed, will erode Australia's economic and political sovereignty.

The federal government's planned return to a Budget surplus this financial year would not be possible without the revenue generated from commodity exports to China.  This has created a vulnerability for Australia and provided China with leverage.

In December the Chinese Ambassador to Australia, Cheng Jingye, hinted at this when he said China's purchases of Australian exports "... is largely responsible for the federal budget returning to surplus ahead of schedule".

Northern Australia Minister Matt Canavan, for one, appears alive to the issue, stating "we [Australia] shouldn't hitch our star to one country because that elevates risk, not just from a political perspective but from an economic one, too."

The task is to pivot Northern Australia, which is the area above the Tropic of Capricorn and all of the Northern Territory, away from its heavy reliance on China.

There are already some good initiatives underway.  During the recent US-China trade war, concerns were raised that a large amount of the rare earth minerals used for US military equipment and industry came from China, creating a national security vulnerability.

This led to renewed interest in Australia culminating in an agreement last year for the US to expand its use of Australia's rare earth minerals including antimony, manganese, and rutile.  Australia is the second largest producer of rare earths, accounting for 13 per cent of global production.  This initiative sits alongside the Northern Australian Infrastructure Facility, which provides finance to projects in the region, and an expansion of defense capabilities in areas such as Darwin.

Now is the right time to build on this good start by turning Northern Australia into a Special Economic Zone.

SEZs are designated areas where tax and regulation are significantly relaxed or reduced.  The focus of such a zone in Northern Australia would be to promote investment, create employment opportunities, and transform depressed and under-developed regions into areas of considerable economic activity and opportunity.

Reducing regulation and red tape will enable the development of more infrastructure, such as dams, which is crucial to the development of the region.  The North of Australia receives approximately 60 per cent of Australia's rainfall but currently only about two per cent is captured.

Crucially, a special economic zone will enable the North to access more diverse sources of capital and investment.  The two major impediments to business investment in Australia are the corporate tax rate and red tape.  Australia's corporate tax rate of 30 per cent is well above the OECD average of 25 per cent, while red tape reduces the size of the Australian economy by $176 billion each year which is the equivalent to 10 per cent of GDP.

As a consequence, new private sector business investment in Australia is just 10.9 per cent of GDP which is lower than the rate in the economically depressed Whitlam-era.

A lower regulatory and tax impost will help the north access more capital from the US, South-East Asia, and India.

Economic liberalisation is not only necessary for economic prosperity.  It is now a national security imperative.

We'll Not Prosper In A World Tied By Red Tape

While the wider Australian economy struggles under excessive regulatory burden and lack of ­opportunity, the Canberra swamp charges ahead as a perpetual growth machine.

According to Deloitte Access Economics's latest quarterly business outlook released on Monday, Australia continues to suffer the triple threat of drought, a downturn in housing construction, and low confidence among consumers and business.

According to the ­report, Australia is "locked into slow growth" with an outlook ­described as "comfortably treading water rather than roaring into recovery".

Claims about the robustness of the economy do not stand up to scrutiny.  Even Josh Frydenberg in The Australian on Wednesday pointed to an International ­Monetary Fund report showing only "tentative signs of improved market sentiment" and recent data showing unemployment has fallen to the still high rate of 5.2 per cent.  Conditions are sluggish and the federal government is not doing enough to improve productivity.

But while Australia's private sector is living "in the slow lane" and "productivity growth has been as dead as a doornail", Deloitte ­reserved special praise for the ­nation's apparent economic leader, the ACT.

"Canberra is defying the ­national downturn, continuing the drive which has seen it record its largest ever share of the nat­ional economy.  Job growth is healthy and lower interest rates are loosening the noose on family budgets," noted the paper's lead author, Chris Richardson.

Data published by the Australian Bureau of Statistics in Nov­em­ber reveals what is so unique about the ACT.  Last year "public administration and safety" — which refers to most public sector activities but doesn't include education and health — accounted for about 28 per cent of the ACT's economic activity alone.  Nationally, public administration and safety accounts for about 5.7 per cent of the Australian economy.

Success for Canberra is based on a business model of regulatory and bureaucratic expansion.  A paper last year by a team of ­researchers at the Mercatus Centre of the George Mason Univer­sity in the US and RMIT in Melbourne found that the number of regulatory restrictions in Australia increased from about 2000 in the late 1970s to 95,000 in 2015, and in that time has ­become substantially more complex and wordy.

Government agencies have been given broad powers and discretion to administer this regulatory expansion, which in turn leads to further calls for red tape.  This month the Australian Communications and Media Authority ­released a discussion paper on ­impartiality and conflicts of interest in news broadcasting.  Having taken the initiative to identify the problem, it now assumes the ­responsibility for solving it.  This will undoubtedly mean more powers for bureaucrats and more regulatory burden for commercial broadcasters.

Notably, the public broad­casters — another intractable part of the swamp — were explicitly excluded from the scope of the ACMA's review.

The expansion of regulation is further facilitated by former politicians who, on retirement from parliament, rarely cease being members of the permanent political class.

In the past 12 months, former ministers Julie Bishop and Christopher Pyne have come under criticism for taking jobs closely connected to their former port­folios.  For many, this confirms the view that there is a revolving door between the corridors of power in parliament and the lobby and consultancy industry.

This system has many benefits for firms such as Deloitte, which benefits directly from bureaucratic expansion.  Between 2007 and 2017, the annual collective value of government consulting contracts between the federal ­government and the big four ­accounting firms — Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG — increased from $44m to $453m.  The total in that period amounted to $3.4bn.

But economic success for Canberra, which is contingent on the proliferation of big government, necessarily comes at the expense of the rest of the country, which must contend with more regulations and red tape.

The consequences for this model are plaguing the Australian economy.  For instance, private sector investment has sunk to 10.9 per cent of gross domestic product, which is lower than the levels experienced during the hostile Whitlam years.  The rates for small businesses ­exiting the economy are at historic highs.

Redefining economic success to mean the size of the public sector is a recipe for disaster in the real economy.

Australians already understand the problem of red tape.  Polling by Dynata of 1016 Australians last month found 64 per cent of Australians agreed with the statement that "unelected bureaucrats have too much control over our lives".  The same poll found 58 per cent of ­respondents believe Australia has too much red tape.

Red tape is the largest barrier to economic opportunity and prosperity in Australia.  My research estimates red tape reduces economic output by $176bn a year, the equivalent to 10 per cent of GDP.

You could say that this makes red tape Australia's largest ­industry.

Challenging this status quo and cutting red tape and lowering taxes will lead to significant economic benefits for all of us.  The US under the Trump administration, by adopting red tape ­reduction programs such as the one-in, two-out model for new rules, has lifted the US out of its sluggish Obama era "recovery".

Relying on the bureaucracy to generate economic growth will only feed the beast that is already strangling the private sector.  Draining the swamp will mean that more Australians can reach their potential and unleash prosperity in the Australian economy.

Time To Break The Shackles

Western Australia has always been a fast-moving, entrepreneurial, and successful state.  Blessed with an abundance of natural resources, a thriving agricultural sector, and people with go-ahead attitude, WA has much to celebrate as the 2010s draw to a close.

More people than ever before are in full-time work, exports are booming, and West Australians possess a lifestyle that is the envy of the Eastern States.

Now is the time to take stock and consider the challenges and opportunities that WA has as we prepare to enter the first year of a new decade.

CHALLENGES

Red Tape

The first challenge for the West Australian economy is to cut red tape.

My recent research found WA regulations placed nearly 108,000 restrictions on businesses, organisations, and individuals.  The restriction count is comparable to the Eastern States, even though they have far bigger populations than WA.  There is significant work to do be done to cut the red tape burden that is weighing the economy down.

The Government has taken positive steps to cut red tape.  Its willingness to work with the Federal Coalition has delivered positive results.  Establishing a "one-stop shop" for environmental approvals will fast track investment in the resources sector by removing the onerous process of dealing separately with both State and Federal regulators.

Its Streamline WA project has also raised the profile of red tape reduction.  The challenge now is for the government to deliver reductions that unleash the WA economy.

Green Activism

The second major challenge is to fend off the continual attempts by the green movement to undermine WA's resources and energy sectors.

The mining industry alone accounts for 40 per cent of the WA economy.  Attempts by activists to shut down new mining projects through lawfare and boycotts must be resisted.  The Environmental Protection Authority's plans from earlier this year to introduce a backdoor carbon tax through industry "contributions" to a carbon abatement fund has fortunately been quashed.

The Government needs to ensure that environmental policy does not take the state down an economically harmful route.

The WA Government should form sensible policy to allow the resources sector to flourish.

The move to allow fracking last year was a step in the right direction.  However, the ban is still in place for 98 per cent of the state.

New gas projects will help drive down the cost of energy that is currently crippling the Australian economy.

Fair Share of GST

Thirdly, despite recent positive changes to the State distribution of GST, WA is still not receiving its share of revenue.  Even with improvements, WA continues to subsidise economically underperforming states like South Australia.

West Australians should reap the full benefits of their strong economic performance and the WA Government should argue for States to retain 100 per cent of the share of the GST that they raise.

OPPORTUNITIES

Small Businesses

With red tape reduction on the cards, and the phasing in of small business tax cuts by the Federal Government, small business in WA is in a strong position to thrive.  Small businesses account for 97 per cent of all businesses in WA and contribute over $48 billion to the State's economy.  Small business growth promotes competition and creates employment opportunities.  Favourable conditions for small business will allow WA to take full advantage of a strong culture of ingenuity and entrepreneurship.

Resources Sector

Next year will be another big year for the WA resources sector.  The deal struck between Australia and the United States on mining rare earth materials will be a boon for the State's mining sector.

The ability to form new supply chains with the US offers Australia's mining industry a significant opportunity.  WA has the resources to take full advantage of the new partnership.  WA is already home to the largest rare earths producer outside of China, Lynas, which mines and processes rare earth oxides at Mt Weld, south of Laverton.

High iron ore prices have boosted Australia's mining exports and strong demand from Asia for Australian resources is likely to continue to grow in the new year.

The strong prices have resulted in higher-than-forecast Government surpluses, which have given the Government the opportunity to tackle the State's growing debt.  While prices are expected to ease, the recent pickup in investment combined with moves to cut red tape in the resources sector will put the WA economy in a good position moving into the 2020s.

Sporting Capital of Australia

And finally, WA has the opportunity to turn Perth into Australia's new sporting capital in the new decade.

New and improved facilities will attract more sporting events.  With the redevelopment of the WACA, the iconic wicket can play a greater part in world cricket.  Optus Stadium has packed more Fremantle and West Coast fans in to create an even more hostile environment for the eastern clubs.

This should go a long way to boosting the odds of bringing a flag home to Perth in the 2020s.

Red Tape Is Costing Australia $176b A Year

Excessive government regulation is harming the economy, reducing freedom of choice and making people's lives harder.

Becoming a hairdresser in New South Wales requires approximately 1,224 hours of study and can cost $12,060.  In order to open a restaurant in the same state you must fill out 48 separate forms and acquire 72 licences.

These are just a few of the regulations that make up the endless web of federal, state, and local government red tape that is costing the Australian economy $176 billion per year — the equivalent of $19,300 per household.

Even kids' birthday parties are affected, as an Adelaide mother found out when she was fined $187 for hiring a magician to entertain 14 children at her son's birthday party in a local park.

As Jenny Barret from the City of Burnside council told ABC Radio Adelaide, members of the public must pay $185 for a permit to use the park "if [they] are going to get a third-party contractor in, such as a magician or a bouncy castle or a face painter".  This is because third-party contractors require public liability insurance.

A permit is also required for people planning to hold an event with more than 60 people, and this may be reasonable.  But it's hard to see the sense in requiring a permit for a magician to entertain 14 kids at a birthday party.

Does the council think the kids will be attacked by the balloon animals or traumatised when they see a rabbit suddenly pulled out of hat?  Unexpected things do happen, but if there is a need for insurance then surely it is the responsibility of the magician hiring out his services.

Local councils issuing ridiculous fines is sadly all too common.

Last month A Current Affair reported that Melbourne's Melton City Council had fined a man $1,000 for using an outdoor fire pit he had bought at Bunnings, while a Beaumaris woman received a $200 fine from Bayside Council, also in Melbourne, for only carrying a single dog poo bag.

But all levels of government impose red tape that makes people's lives harder.

Here in NSW there are a staggering 107,726 regulatory restrictions on the books.  And on a per capita basis, NSW is the least regulated state — with 13.3 regulatory restrictions per 1,000 people — compared to Tasmania's 74.1 regulatory restrictions per 1,000 people.

That's according to my forthcoming research, which applies a new method of measuring red tape pioneered by the Mercatus Center at George Mason University in the United States.  Known as RegData, this method uses artificial intelligence to count the number of restrictive clauses in legislation and regulation, which are words and phrases such as "shall" and "must not".

The research found that the number of regulatory restrictions at the federal level is 356,000, a 9 per cent increase from just five years ago.  Staggeringly, regulations created by federal agencies, such as ASIC and APRA, have increased by 200 per cent since 2005.

The scale of this regulatory increase is surprising, but the fact it's increasing is not.  We have a permanent bureaucracy and a political class that believes its job is to constantly come up with new rules and regulations, whether they are necessary or not.

This doesn't mean reducing red tape is impossible, it just takes political will.  Governments at both the state and federal level should begin by implementing a "one-in-two-out" rule so any new regulation must be accompanied by the repeal of two outdated or unnecessary regulations.

This was the approach taken by British Columbia in Canada, which has succeeded in cutting red tape by 48 per cent since 2001.  Once one of Canada's worst-performing provinces, British Columbia is now one of its best — and personal incomes have increased by almost 20 per cent in real terms as a result.

Thankfully, there are signs that the federal Coalition government understands the problem and wants to address it.

Assistant Minister Ben Morton has set up a Deregulation Taskforce with an initial focus on three areas:  reducing the regulatory burden for food manufacturers, making it easier for businesses to employ their first person and getting major infrastructure projects started sooner.  The task force will presumably then move on to other areas.

There are also positive signs coming out of the NSW Government, with Premier Gladys Berejiklian and Planning Minister Rob Stokes recently announcing a series of reforms to the state's planning system designed to "slash assessment timeframes, reduce red tape and fast-track projects in high growth areas".

Time will tell if these efforts are able to significantly reduce the red tape burden.  In the meantime, people across Australia will have to continue to bear the burden of endless rules and regulations dreamt up in by politicians and bureaucrats across the country.

Cutting Red Tape Will Drive Growth

Momentum is building for bi-partisan reform between the Western Australia state Labor government and the federal coalition government to cut red tape and boost economic growth.

As reported in these pages on 27 November, the McGowen government has reached out to the federal government to establish a "one-stop shop" for environment approvals.  This means that WA would be able to conduct the environmental assessment on major projects in the state, such as gas, gold, and iron ore developments, removing the need for assessment at the federal level as well.

This is a very important development which could reduce the approval time of major projects by up to six months.  The fast-tracking would not alter environmental standards because it is the duplication between state and federal regulations that is to be removed, rather than reducing underlying regulatory obligations.

In announcing the initiative Premier McGowen said "industry has been crying out for bilateral approvals and we are responding to these calls.  This plan ensures we maintain the highest environmental standards, but don't get bogged down in bureaucracy."

This is an example of Team WA working across party lines to achieve sensible economic reform.  At the federal level red tape reduction is being led by the highly capable Ben Morton, who is the Assistant Minister to the Prime Minister and the Federal Liberal Member for Tangney in the city's south.

The bi-partisan initiative comes at an important time.

Across the nation business investment is just 10.9 per cent of GDP, which is lower than it was during the Whitlam years and is slightly above the recessionary lows of the early 1990s.

New private sector business investment in Western Australia is 54 per cent below the 2013 peak which is holding back productivity, employment, and wages growth.

While there are non-policy reasons for this decline, it is red tape which has caused the decline to business investment to be deeper, wider, and more protracted than it otherwise would be.

My recent research estimated there are 107,817 regulatory restrictions contained in Western Australian legislation alone.  To put this in context, New South Wales has a population around three times that of WA, yet has slightly fewer regulatory restrictions on the books.

Regulatory restrictions refer to instances in legislation which restrict or compel behavior, including words such as "should", "must", and "shall not".

Importantly, my research found that the Department of Mines, Industry Regulation and Safety was responsible for imposing the most regulation on the Western Australian economy with 17,097.  This was followed by the Department of Jobs, Tourism, Science and Innovation with 16,272 regulatory restrictions, and the Department of Justice with 15,226 restrictions.

It is a big problem that the two departments who have primary oversight of the WA resources sector and job creation, respectively, are also responsible for imposing the most regulation.

This will undermine the ability of the McGowen government to achieve its ambitious objective of overseeing the creation of 150,000 new jobs in WA over the next five years, which includes some 30,000 new regional jobs.

To understand the problem of red tape in the resource sector, consider the Roy Hill iron ore project located in the Pilbara region.

The Roy Hill project required some 4,967 licenses, permits, and approvals for the pre-construction phase alone, approximately 79 per cent of which were imposed by the state government.

And while Roy Hill has been able to successfully navigate the reams of red tape, many other projects, particular those being undertaken by smaller businesses, cannot.

To further build on the encouraging bi-partisan effort to cut red tape, the WA and federal governments should also introduce a one-in-two-out approach where two regulations must be repealed for every new one introduced.  This will place a binding constraint on bureaucracy to ensure there is a steady decline in regulation.

More Regulation Is Not The Solution To Westpac Revelations

Yet another scandal among Australia's banks suggests the industry is in dire need of a clean-out.  Westpac has committed one of the most startling failures of corporate governance in Australian history.  After a year-long investigation, the bank stands accused of failing to report, as required by law, 23 million transactions that it had facilitated, and, in particular, failing to notice a series of suspicious transactions originating from South-east Asia that have been implicated in child exploitation.

The consequences for Westpac continued to mount.  The bank is expected to be fined more than $1 billion.  It lost $6 billion in market capitalisation, or 7 per cent of its value.  Its chairman and chief executive have both resigned.  All of this is fair enough.  The allegations are extremely serious and, if proved, demonstrate an almost-incredible negligence.

Inevitably, these facts raise the question of whether a policy response is required, and what kind.  Given the recent Hayne inquiry into various kinds of malfeasance by Australia's banks, it would be understandable if the first recourse that comes to political minds is more legislation or regulation.  But this would be a mistake.

Banks, as unsympathetic as they are, already labour under the weight of a substantial regulatory burden:  apart from the various civil and criminal laws to which they are subject, my research has shown that banks and the finance industry are governed by 76,000 pages of regulatory dark matter, referring to legislative instruments and bureaucratic guidance.  An earlier report by Deloitte found that one in 11 Australian workers is employed in compliance, with the number in finance estimated to be even higher.

None of this amounts to a defence of Westpac, but it suggests that Australia's banking industry does not suffer for a lack of rules.  Instead, the better question is:  why are Australia's banks so bad?  We ought to consider whether all of these scandals point to a systemic problem.

To begin to answer this question, note first that the big banks, and big business generally, welcome regulation and actively co-operate in its creation.  For example, the act under which Westpac was charged was passed in 2006 after extensive consultation with the sector, and in particular with the then Australian Bankers' Association.  For big businesses, it is well understood that compliance can be useful for limiting competition from smaller rivals that are less able to bear the associated costs.  They have little incentive, then, to adopt an adversarial approach to regulators.

For this reason, it is not surprising that a 2018 Grattan report found businesses in heavily regulated industries put more effort into lobbying than other businesses.  It might be thought that this effort is towards deregulation.  But if that is the case, then it is the least successful lobbying operation in history.  The simpler explanation is that this effort is towards self-interested regulation.

In the case of banking, the most obvious self-interest is the perpetuation of Australia's anti-competitive cartelisation of the industry.  The "four pillars" policy prevents mergers between Australia's biggest four banks.  Despite the Productivity Commission last year advising that the policy be dropped, it has the support of the now Australian Banking Association.  Its chief executive, former Queensland Labor premier Anna Bligh, told the ABC after that report came out that the policy had contributed to stability, which necessarily has to be traded off against competition in the marketplace.

This aversion to competition can also be attributed to the growing role of institutional investors, such as super funds.  Super funds value stability over growth because their product is low-risk guaranteed returns to members.  Not coincidentally, the removal of Westpac chief executive Brian Hartzer reportedly followed a meeting with Australian Council of Superannuation Investors chief executive Louise Davidson.  Her organisation represents all of the major super funds, which control $2.2 trillion of capital, much of which is invested in blue chip Australian companies like the banks.  Super funds own an average of 10 per cent of every ASX 200 company.

The banking industry, then, has been deliberately constructed — by government, its practitioners and its investors — to prefer regulation and stability to competition and dynamism.  This is the context within which the recent scandals have occurred.  It is an industry that knows that no matter what it does, it has the protection of its powerful friends.  So it feels at liberty to behave badly, or negligently.  As risk analyst Nassim Taleb would say, Australia's banking industry has no "skin in the game" — and its performance is worse for it.

Any policy response should target this insularity by instilling some competitive discipline into the industry.  The alternative is more regulation and more compliance costs.  But if the root cause of Australia's banking problems is that the banks, the regulators, the government, the lobby groups and so on are all in it together, then further regulation should be seen for what it is:  the ruling class closing ranks.

Cut Red Tape, Get In Black

If Scott Morrison and his government want to deliver an economic boom, they should follow the highly successful template of President Trump in the US and cut red tape.

New research released today by the Institute of Public Affairs finds that President Trump has overseen a $45.6 billion ($31 billion USD) reduction to the cost of red tape since 2017.  That is the equivalent to around 20 new hospitals, 15 years work of Gonski 2.0 education funding, or four years' worth for funding for the NDIS.

The new research, titled The Trump Administration's Red Tape Reduction Agenda, finds that the key to Trump's success has been a one-in-two-out requirement where two regulations must be repealed for every new regulation introduced.  This requirement imposes a binding restraint on the bureaucracy to consider the costs of the new rules they impose by introducing a trade-off into the equation.  If bureaucrats consider that a new rule is of such importance then they can introduce it.  But they have to find two existing rules to get rid of first.

The outcome of the red tape reduction agenda, along with corporate tax cuts and liberalisation of domestic energy production, has been a once-in-a-generation economic boom.

The unemployment in the US fell to just 3.5 per cent in September, which is the lowest rate since 1968.  The unemployment rate in Australia, by contrast, is 5.3 per cent.  New private sector business investment is above its 40-year average.  There has been an increase to average quarterly business applications (a good indicator of new business formation) from 650,000 in 2016 to 826,000 in 2019.  And a net increase of 422,000 jobs in the manufacturing sector since 2016.  Try impeaching a President with that economic record, Democrats.

Importantly, the bounty of this economic boom has been widely shared across the US.  The unemployment rate for African Americans is at a record low 5.4 per cent, which is down from eight per cent when Trump took office.  And the Hispanic unemployment rate dipped to below four per cent for the first time on record in September this year.

To be sure, not all of this success can be attributed to Trump's economic policies.  There has been a long-term structural improvement to the US labour market following the GFC in 2010.

But Trump's red tape cuts have supercharged the economy by making it easier and less expensive to do business in the United States.  Indeed, while business investment into the US is booming, it is stagnating in Australia.  New Private sector business investment in Australia is just over 11 per cent of GDP, which is lower than during the economically-hostile Whitlam years.

While not yet at Trumpian levels, the Morrison government have cottoned on to the fact that red tape reduction is the key to economic growth.  In a speech to the Business Council of Australia last week, the Prime Minister outlined a number of important reforms including simplifying Australia's employment laws system and speeding up approvals for major projects.

In addition, government's red tape reform efforts are being driven by the highly capable Ben Morton, who is the Assistant Minister to the Prime Minister.  Just yesterday Morton outlined important changes to the policy-making process that will require departments to provide more rigorous analysis to justify new regulations.

This is a welcome start.  But much more work needs to be done.

To start with, the government must take the scissors to the mountain of green tape which is holding up projects across the country from dams and mines in Queensland to logging projects in Tasmania.

As reported in these pages on October 23, there has been a 80-fold increase in green laws since the first federal environmental department was set up in 1971.  Much of this increase is duplication — and triplication in some cases — between local, state, and federal laws.  At a minimum the government should remove areas of duplication by removing the federal government from regulating any areas that state governments or local councils are already involved with.

Most importantly, though, the government must hold the bureaucrats to account.  Every year, more bureaucrats are employed by state and federal governments and, inevitably, look for more work to do.  Unfortunately, more work for bureaucrats typically means more regulation for everyone else.

Imposing a regulatory budget on all federal government departments will bring them to heal.  Such a budget could take a one-in-two-out form, such as with President Trump.  Or it could be a numerical target of, say, a 10 per cent reduction to red tape each year.  Either way, the bureaucracy would finally have some skin in the game and would feel the pinch of the ever-expanding array of regulations.

Morrison and Morton should build on a good start to cutting red tape in Australia by applying the highly successful approach of Trump.  They too might just find it will produce a once-in-a-generation economic boom.

This Foolish Act Must Be Repealed At Once

Bureaucrats are using Australia's foreign-influence laws to run a covert political operation out of the Attorney-General's Department to silence Australians becaus­e of their political beliefs, all under the nose of the Coalition government.

This is the kind of behaviour one would expect from the Stasi in East Germany in 1961, not in Australia­ today.

On Saturday, The Weekend Australian reported that Andrew Cooper, the founder and president of libertarian advocacy organisation LibertyWorks, had received a letter from the Attorney-General­'s Department advising him to provide all documents ­"detailing any understanding or arrangement" between LibertyWorks and the American Conservative Union.

LibertyWorks and the ACU co-hosted the Conservative Political Action Conference in Sydney in August, which featured a range of speakers from Australia and overseas.

The notice, issued by the deputy secretary of the department's Integrity and International Group, also requested copies of correspondence with speakers, as well as the transcripts and recordings of the addresses given at the conference.

It further noted that a failure to comply with the notice within 14 days could expose ­Cooper to criminal penalties, with a maximum penalty of six months' jail.

Former prime minister Tony Abbott has also been harassed by A-G's bureaucrats under the same laws.  This political intimidation was enabled by the government's Foreign Influence Transparency Scheme, which came into force last December.

Under section 45(2) of the scheme, officials in the Attorney-General's Department are given broad powers to issues notices requiring a person to produce­ information where offic­ials "reason­ably suspect" that a person might be liable to register under the scheme.

When the Turnbull government introduced the laws into parliament in 2017, the scheme was purportedly designed to counter the "serious threat posed to Australia and our interests by covert interference and espionage".  Specifically, the laws were introduced as part of a push to challenge intrusions into Australian democratic activities undertaken by the Chinese Communist Party and its agents.

The Chinese government operate­s an extensive influence apparatus that includes Confucius Institutes embedded within Australian universities, Chinese govern­ment-owned companies that are deeply linked to the Commun­ist Party, and so-called community groups active in Aust­ralia but that lobby governments here on behalf of foreign powers.

However, instead of implementing careful and proportionate measures to curtail foreign influence, the Coalition government has handed the bureaucracy untrammelled power to operate a covert political operation to target Australians based on their political views.

Cooper has not been charged with a crime.  The laws enable a bureaucrat to go on fishing exped­itions without a warrant or court order to collect information on the mere suspicion of foreign influence.  The nature of this scheme raises the question of which govern­ment parliamentarians sat down to read the bill, and how they could approve of it.

Apparently the department has sent about 500 letters to a range of individuals asking them to consider whether they need to register under the scheme.  It is not an isolated problem.

Under the circumstances, the departmental secretary should be stood down so that an investigation can take place to understand why this has happened, who else has been targeted, and to ensure it does not happen again.

Observers of American politics will recognise the parallels to the Lois Lerner saga during the latter half of the Obama administration.  Lerner was the head of the Internal Revenue Service division which processed applications for tax-exempt groups.

A 2013 investigation found that the IRS had singled out conservative organisations for intense scrutiny, sometimes based on such arbitrary grounds as the name of the organisation.  The IRS delayed applications and improperly questioned some organisations about their donors and religious affiliations and practices.

This was the result of a massive bureaucracy becoming a power unto itself.  The signs from Aust­ralia's foreign-influence laws suggest­ we may be heading down a similar path.  The difference here is that the abuse of power is ­happening under the noses of an ostensibly centre-right government.  This is what happens when you try to govern with a public service­ stacked with people who align with a green-left agenda.

These consequences were not unknowable or unforeseen.  In research published in January, I identified that the Foreign Influence Transparency Scheme Act 2018 added to the body of laws that undermine our fundamental freedoms and betray the rule of law.

The research revealed that the legislation removes the right to silenc­e and imposes criminal penalties for failing to give inform­ation when requested to do so under a notice.  It even abolishes the privilege against self-incrim­ination when such information might expose the person to a penalty.  Finally, natural justice is ­removed as departmental officials are not required to observe procedural fairness when exercising the powers granted under the act.  An investigation must be launched into the Attorney-­General's Department to find out how deep and widespread the ­potential abuses of power are.  For every Andrew Cooper and Tony Abbott, who have the profile and public support to fight back, there could be thousands of conservative Australians being told to shut down and shut up.

The Foreign Influence Transparency Scheme Act 2018 must be repealed.  If the government fails to act swiftly, it could find that s45(2) becomes the new s18C.

When Regulators Roam Out Of Control

Ask Australian business people and industry representatives in formal meetings about our nation's regulatory burden, and you will be told that reform is necessary, a governmental inquiry would be welcome, and the evidence detailing the burden of red tape is persuasive.

Ask them privately, and the language is much less measured.  They will say that the sea of legislation is vast and impenetrable, that additional regulations being proposed are insult piled upon insult, and that regulators are out of control.  It is a potent combination of private anger and public diplomacy and acquiescence.

Business leaders look at financial estimates of the cost of red tape and say they still do not capture the Kafkaesque nightmare of dealing with a regulator determined to make itself a not so silent partner.  Previously it has been difficult to quantify the cost of such harassment, but last week's Federal Court judgment in ASIC v Westpac demonstrates it to be it is $34 million of shareholder funds just for one company.

Australian entrepreneurs with operations in the USA have endorsed President's Trump use of rules such as "one in two out" for new regulations, and seen the economic upside.  But more than that they've seen the importance of regulators being brought back within the confines of the rule of law.  As one with experience of the Obama era put it to me, what do you do when a team from the EPA literally parks itself in your head office for months on end, asking endless questions and interfering in decision-making?

In search of quantifiable evidence of the red tape burden, I have counted pages of legislation, as was done recently in the financial services sector.  This revealed that while there was an already impressive 9,524 pages of relevant legislation, plus a further 19,011 pages of regulation, and an even more incredible variety of "regulatory dark matter" such as the guidelines, notes, advice and so on, running to 56,965 pages.

We've also cooperated in a project using world-leading AI techniques revealing the number of regulatory restrictions in Federal legislation has increased from about 2,000 in the late 1970s to 95,000 by 2015.  This analysis is fundamental to build a case for change, but there is the further research challenge of how best to capture and cost the culture of unlimited discretion in which regulators operate?

At last, there's direct evidence, thanks to a landmark case of ASIC's pursuit of Westpac for alleged breaches of the National Consumer Credit Protection Act 2009.  The detail of the case is literally irrelevant.  Just as Herr K in Kafka's The Trial was never told the nature of his offence;  it was the power of the prosecutor and not the strength of its case that mattered.

For a considerable period, Westpac argued with gusto the merits of its defence, but ultimately it caved and in November 2018 agreed to a settlement in which it would have paid a $35 million fine.  Striking a blow against expediency and for the rule of law, Justice Nye Perram in the Federal Court refused to endorse the settlement, stating "I will not declare conduct which is not unlawful to be unlawful.  "How," he asked, "can the court be expected to assess the reasonableness of the proposed penalty if it be left in the dark about what the actual problem is?"

Despite this more than reasonable question ASIC simply resumed pursuit of its quarry through the court, but on 13 August 2019, Justice Nye Perram in the Federal Court found wholly in favour of Westpac on points of fact and on points of law.  ASIC was ordered to pay costs.

In response, ASIC said it would "carefully examine" the judgment but that in any event, it had been a "test case".  If it was such an important test case, why had it been so willing to settle in 2018?  The reality is that maintaining ambiguity by NOT testing the law would have allowed it greater scope to pursue other companies.  Labelling it now a "test case" is a risible retroactive rationale for prosecuting a corporation for the "vibe" of its alleged offending.

I have pointed out a litany of previous such cases where ASIC's pursuit of alleged corporate wrongdoing had comprehensively failed in court.  These include Australian Securities & Investments Commission v Fortescue Metals Group Ltd [No 5][2009] FCA 1586 and a case against a former AWB Executive which the judge labelled an "abuse of process" which "brings the administration of justice into disrepute in the minds of right-thinking people."

I have also discussed how regulators like ASIC (but not only ASIC) use regulatory dark matter (so-called soft law), enforceable undertakings, and "cooperative regulation" to achieve outcomes never contemplated by and certainly not overseen by democratically elected representatives.

I can only imagine — and certainly hope — that in the Westpac boardroom when their case was discussed in late 2018 the tone of the conversation veered towards the anger and frustration I described earlier.  But nevertheless, the decision was for abasement and apology for a crime directors must have known their corporation had not committed (since the crime could not even be accurately described).  It was submission to a forced confession in a manner that would have made Lenin or Torquemada proud.

Before the Federal Court's decision, we did not know how to quantify the price we pay for our out of control regulators, how to quantify the price we pay for a culture in which regulators can endlessly abuse their authority and operate well beyond the rule of law.  Thanks to Westpac and Justice Nye Perram we now know:  $34 million, multiplied across every large and small business in Australia.