PPRuNe Forums - View Single Post - Barriers To Prosperity: Red Tape And The Regulatory State In Australia
Old 24th Mar 2018, 22:09
  #1 (permalink)  
Join Date: Aug 2004
Location: Melbourne, Australia
Posts: 7,890
Barriers To Prosperity: Red Tape And The Regulatory State In Australia

Australia has experienced 26 years of unbroken economic growth. However, this aggregate figure masks stagnant wages growth and a deterioration in the living standards of many in the Australian middle class. The central cause of this deterioration is low and declining levels of business investment, which is approaching historic lows.

Overregulation and red tape are two key causes of weak investment. The regulatory burden on private enterprise has grown unabated for decades at the state and federal level, and under both Labour and Coalition Governments. Red tape reduces economic output by $176 billion each year. This means that if previous attempts to eliminate red tape were successful, the Australian economy would today be 11 per cent larger and the average household would be $19,300 better off each year.

From the report:

....Red tape arises when more regulation is in place than what is needed to achieve a given stated objective. More formally, red tape can be defined as 'rules, regulations and procedures that require compliance but do not meet the organization’s functional objective for the rule.'......

............Red tape imposes a range of costs on individuals, families, communities, and businesses. These costs can be broadly categorised along the following lines:

1.Administrative costs: costs incurred to demonstrate compliance with a given regulatory requirement. This includes the direct costs of compliance such as reporting requirements, paperwork, and keeping and producing records.

2.Substantive costs: costs incurred to meet the regulatory requirements, such as hiring or training new staff, or purchasing new equipment.

3.Opportunity costs: activities forgone or delayed as a result of red tape, such as delayed implementation of a new project.

4.Financial costs: payments of fees by private actors to government, such as through cost recovery
Amen brother.

Sunfish is offline