Australian government scraps Repeal Day: Is business reform a political stunt?

The Australian Government’s decision to its scrap Repeal Day (I’ve written about this before: here, here and here) initiative after two years raises some interesting questions:

• Does red-tape reduction and improvement in regulatory quality require a specific day or event?
• How can government manage a continuous regulatory reform process connected to broader ambitions such as innovation, productivity and competitiveness?

The value of a Repeal Day

Repeal Day applies a technique known as the “red-tape guillotine”: A systematic, transparent, rapid, and low-cost means of counting and then reviewing a large number of regulations and eliminating those that are no longer needed. The aim is to get rid of economically significant regulatory costs for businesses.

The Australian Government has conduced two Repeal Days a year over the last two years to reduce the cost of the regulatory burden on business, and claims A$4.5-billion worth of “red-tape savings” were made. This is well in excess of the targeted A$1-billion annual savings. On this basis, it would appear that the Repeal Day has been effective. So why stop it?

Some have questioned the focus of these repeal efforts. The Australian opposition finance spokesman Tony Burke had a bit of a laugh about the trivial nature of some of these reform efforts noting, “On the first Repeal Day, the Defence Act 1904, which related to the definition of naval officers and state navies, was repealed.” Given that states haven’t had navies since 1913, Burke argued that repealing the Defence Act was unlikely to have much of an effect on the business environment. Not one to be fooled, Burke continued, “Owners of mules and bullocks were also given a reprieve, with the repeal of laws requiring the animals be registered for military purposes”. He also highlighted “pressing update”, which included changing the word ‘e-mail’ to ’email’ and ‘facsimile’ to ‘fax’ across numerous pieces of legislation.

Burke’s comments suggest that Repeal Day initiatives can be used as political stunts to show how governments are significantly reducing the number of regulations affecting the business sector without necessarily actually doing this. Claiming to have cut down on red tape, plays into a broader and often seductive narrative: government should be smaller and less intrusive.

The continuous reform process

Australia’s Assistant Minister for Productivity, Peter Hendy, says future regulation reform efforts will work in “lock-step and supporting the Government’s other economic and social policies”. From 1 July 2016, the Government says it will broaden its focus to regulation reforms that directly enhance innovation, competitiveness and productivity and says it will consult stakeholders on the priorities for reform.

A continuous process of quality improvements to regulation involves action to improve or reduce the stock of existing business regulations while ensuring the flow of new regulations are of a high standard. Red-tape guillotines are a useful way to address the stock of existing regulations (particularly the deadwood,), while regulatory impact assessments or statements have been successfully used in Australia and across the OCED to improve the quality of new regulations.

So, has the Australian government done the right thing? Probably. Red-tape guillotines have a specific purpose and a limited lifespan. They are designed as a first-order reform in a situation where too much red tape is a barrier to business growth and where urgent action is required. They cut a swath through an overgrown forest of regulation and set a momentum for future reforms. But once the most obvious tape as been cut, a more nuanced and strategically balanced approach is needed.