Political Insights Series | Cutting Red Tape: The Deregulation Agenda

by Steve Lewis, Senior Adviser at Newgate Australia

When Ben Morton was asked to lead the Morrison Government’s deregulation agenda, his first reaction was ‘oh no, here we go again’.

Such cynicism is understandable. After all, successive federal governments have spruiked the benefits of cutting regulatory red tape and yet the layers of legislation keep growing. Eighteen months later, however, the Assistant Minister to the Prime Minister & Cabinet is an enthusiastic backer of deregulation and is charging ahead with plans to help unleash the ‘animal spirits’ in the economy.

A confidant to Scott Morrison – and tipped for possible promotion in the looming ministerial reshuffle – Mr Morton is charged with modernising business communications, cutting the compliance burden, and removing costly duplication between layers of government.

During a widespread interview, he insists everything is on the table: from streamlining bank lending practices to removing archaic paper-based compliance systems, and reforms that he hopes will save business $100 million in transaction costs by 2030.

He also wants Australia to be a global leader in areas such as Regtech and believes the Morrison Government and the States can work on tackling deregulation in a new spirit of “cooperative federalism” through National Cabinet.

Not afraid to speak his mind, Mr Morton admits “there’s nothing worse than when deregulation agendas rise and fall”.

The reform agenda, he insists, is “like painting the Sydney Harbour Bridge: your work is never done”.

Even though Australia’s business community has been battered by COVID-19 in 2020, the Government has been heartened by the response from business to the deregulation agenda. Financial services, the big banks and the insurance sector have been particularly supportive when asked to contribute ideas.

“Normally, the sentiment is like ‘I’m from the Government and I am here to help’ but it was the opposite (earlier this year) when we needed the regulators and industry to work together,” he said. “And we saw, with some of those decisions, that it was a Team Australia moment. And we are going to need many more Team Australia moments if we are to get ourselves out of the economic consequences of coronavirus.”

So, has COVID-19 accelerated the use of technology in tackling deregulation reform?

Yes, it has, with Mr Morton referring to several examples, such as the introduction of virtual AGMs and even allowing for virtual inspections of meat abattoirs.

And it’s not just big business being targeted by the Government’s deregulation agenda. In the October Budget, the Government announced a $11.4 million Regtech Commercialisation Initiative which aims to streamline Government administration and simplify regulatory compliance.

“What this initiative will allow us to do is to identify some challenges, [and] SMEs (small- and medium-sized enterprises) are invited to apply to compete for grants [which would go towards solutions to these challenges] … where we would fund up to $100,000 for up to five Feasibility Study Grants and two Proof of Concept Grants of up to $1 million,” he said.

The program will be managed by the Minister for Industry, Science and Technology Karen Andrews, with Mr Morton promising there will be more to say about developing “Regtech solutions to regulatory compliance issues”.

And while the deregulation agenda doesn’t usually generate front page headlines or excite robust parliamentary debates, Mr Morton says Australia has an opportunity to embrace world’s best practice in the area of Regtech - and even generate new export markets.

“Our job is to identify under this initiative the problems and then ask the entrepreneurs, the data scientists, the experts to compete in relation to what that solution may be,” he said.

Australia, he added, can be at the cutting edge of technology adoption: “It is absolutely part of our deregulation agenda to ensure that we use those opportunities to develop and adopt technology that will actually improve the protections that we are seeking and at the same time reduce the compliance burden on business,” he adds.

In the October Budget, the Government announced a series of deregulation initiatives that highlight the huge modernisation task ahead. This includes working with business to reduce by 50,000 hours every year the level of reporting to the Australian Bureau of Statistics (ABS).

Mr Morton cites another area where he’s pushing to cut red tape – the Therapeutic Goods Administration. The TGA regulates medicines and vaccines by the thousands but the bureaucratic process is cumbersome and, in some cases, archaic.

Says the Assistant Minister: “We are going to fund a process for the TGA to digitise their systems. It will make the application process quicker.”

But it will also speed up the process to report adverse reactions to medicines, as he explains: “Currently, if a business has to report an adverse reaction to a medicine, the TGA has to receive that in a PDF form or via the fax machine, or post. The TGA then has to data entry that into their systems and they then have to produce a receipt number. That receipt number has to be sent to the person who submitted the form and that business must record that receipt number in their system.”

Why, asks Mr Morton, can’t the TGA develop direct-entry systems that allows that reporting to occur in a timely way?

“It is very clearly possible that our deregulation agenda can lead to better reporting of adverse reactions to drugs that will allow the Government to better look after the health of all Australians,” he says.

These sound like straightforward and sensible reforms and Mr Morton insists it will be good for the economy and not lead to some scorched earth economic outcome.

“I don’t want to be partisan on this but there is a campaign from the Left that this deregulation agenda is scary and evil. But this is an efficiency agenda - this is not about everyone running wild. It’s about making it easier for businesses to do business, to reduce the costs and the time of getting things done.”

Other reforms being pursued by the Government sound almost like a plot from Monty Python. For instance, Mr Morton is fond of talking about a honey producer in Tasmania who if they wish to apply for an export certificate has to fill out a form, then print it and have it couriered or emailed to the local Department of Agriculture office. That local office will then print the export certificate on special paper using one of only eleven printers able to do this in Australia.

“For the Tasmanian honey producer, their closest agricultural department is in Tullamarine, Melbourne,” Mr Morton says, incredulously, adding: “There is a whole industry involved in the couriering of these certificates from where they are printed to where the shipment is being dispatched from. And then, when the shipment arrives overseas some time later, the certificate is more valuable than the original shipment because it can be used for counterfeit goods, time and time again.”

All of this sounds sensible and feasible and Mr Morton insists there is an appetite within the Commonwealth Government to have a fair dinkum shot at removing red tape.

“You do need leadership from the senior levels,” he says, insisting that the Prime Minister is the Deregulator-in-Chief and has made it very clear that this reform agenda is key to Australia’s economic revival.

“There is a big pipeline of things that we can do here. Every day is a day for deregulation.”