Annual Review of Regulatory Burdens on Business: Business and Consumer Services (2010)

• Despite long established (and reviewed) consultation processes used in developing regulations, industry still finds these processes lacking in several respects. Finance and property industry groups consider the most significant regulatory failings are a lack of transparency and continuity in consultation processes, short consultation timeframes and a lack of credible evidence in the current regulation-making process.
• These failings of regulatory process are of particular concern given the significant and wide reaching regulatory reforms of the finance sector currently being developed internationally in response to the Global Financial Crisis. It is important that any domestic reform proposals are subject to transparent and rigorous processes that take into account all of the impacts on the finance sector and local conditions.
• To improve the transparency and accountability of its consultation processes the Australian Government should:
  • incorporate a 'consultation' Regulation Impact Statement in the regulation-making process
  • require the Office of Best Practice Regulation to extend its monitoring and reporting role to the quality of consultation
  • use confidential consultation processes only in limited circumstances where transparency would clearly compromise the public interest.
• A number of regulations and associated administrative processes affecting the superannuation industry should be revised to reduce the regulatory burdens on business, including:
  • allowing non-lapsing binding death nominations
  • giving departing temporary residents the ability to submit their applications to superannuation funds for payments before the time of their departure, rather than after they have left Australia
  • standardising the instructions to superannuation trustees made on the dissolution of marriage
  • requiring superannuation fund members to make a specific request to receive transaction confirmation letters.
• There is duplication, overlap and inconsistency in the regulation of certain occupations. Regulatory burdens should be reduced by:
  • implementing a national register for architects so that payment of a single registration fee in any jurisdiction would automatically enable an architect to practice in all Australian jurisdictions
  • ending the 'dual regulation' of lawyers that practice in the area of migration law, by exempting those with a current legal practising certificate from the regulatory requirements of the Migration Agents Registration Scheme
  • harmonising personal and corporate insolvency laws - a reform taskforce should be established to identify provisions and processes that could be aligned and the case for a single regulator should also be examined
  • developing uniform real property laws for adoption in all Australian jurisdictions - this could be overseen by COAG's Business Regulation and  Competition Working Group.
• Unnecessary regulatory burdens in the hospitality and tourism sector should be addressed by:
  • indexing the monetary threshold at which proposed foreign investment in developed non-residential commercial property, including hotels, is subject to Foreign Investment Review Board (FIRB) assessment - similar to the thresholds applying to other types of foreign investment
  • removing the lower monetary threshold relating to FIRB assessment of the purchase of heritage listed developed non-residential commercial properties by foreign interests
  • providing mutual recognition across state borders of responsible service of alcohol training
  • removing inconsistencies between the Environmental Protection and Biodiversity Conversation Act and the regulations relating to the importation of endangered species
  • exempting Sunday and public holiday menu surcharges from the amendments to the Trade Practices Act dealing with component pricing.
• The earnings threshold for the superannuation guarantee continues to be an issue for business, in particular small business. The monthly earnings threshold attached to the superannuation guarantee should be increased and subject to indexation.

Reducing the Burden of Regulation in the Business and Consumer Services Sectors

A report released by the Productivity Commission - Annual Review of Regulatory Burdens on Business: Business and Consumer Services Sector - identifies ways to reduce the regulatory burdens on businesses in the finance and insurance, accommodation and food services, professional, scientific and technical services, and arts and recreational services sectors.

'Notwithstanding some progress, we still find duplication and inconsistency of regulations between different jurisdictions of Australia's federation that are hard to justify. These include those regulations applying to migration lawyers, architects, and property laws. These and other examples add to similar jurisdictional inconsistencies found in previous reviews', Commissioner Louise Sylvan said. Removing or reducing such inconsistencies will reduce business costs and increase the scope for better, cheaper services for the community.

'Consultation processes remain a weak point when developing regulations. In many areas consultation lacks transparency, continuity and time frames are too short. Good consultation processes will be important when implementing the domestic response to the regulatory reforms of the finance sector currently being developed internationally,' Commissioner Sylvan said.

The Commission identified several key areas where regulations can be made less burdensome for business while maintaining or improving services. These include harmonising personal and corporate insolvency laws, changes to regulations related to superannuation, changes to the treatment of foreign investors in commercial real estate and changes in the regulation of what should be included on restaurant menus.

The Commission's final report, follows a draft report released for public comment at the end of June 2010.

• Preliminaries
  Cover, Copyright, Foreword, Terms of reference, Contents and Abbreviations
• Overview - including key points
• Recommendations
• Chapter 1 About the review
  1.1 What the Commission has been asked to do
  1.2 Industry characteristics
  1.3 The regulatory reform context
  1.4 The Commission's approach for this review
  1.5 Conduct of the study
  1.6 Structure of the report
• Chapter 2 Finance issues
  2.1 Finance regulation
  2.2 Future regulatory reform: a need to balance stability and competition
  2.3 Consultation and implementation processes
  2.4 Achieving more effective consultation
  2.5 Superannuation
  2.6 Streamlining of processes
  2.7 Other general finance issues raised
  2.8 Issues that are out of scope
• Chapter 3 Tourism and hospitality related services
  3.1 Travel agents
  3.2 Overseas investment issues
  3.3 Trade Practices Act — clarity in pricing amendments
  3.4 Responsible service of alcohol training
  3.5 Zoos and the regulation of imported animals
  3.6 Employment related issues
  3.7 Travel related charges
  3.8 Environmental related issues
  3.9 Other issues
• Chapter 4 Regulatory barriers for occupations
  4.1 Introduction
  4.2 Architects
  4.3 Lawyers/migration agents
  4.4 Accountants and auditors
  4.5 Insolvency practitioners
  4.6 Property services
  4.7 Bookmakers
• Chapter 5 Building and planning regulation
  5.1 State and territory variations in building regulations
  5.2 Local government requirements create further inconsistency
  5.3 Differences in standards applying to similar use buildings
  5.4 Are disability access standards excessive?
  5.5 Cost of accessing the Building Code and referenced standards
• Chapter 6 Other issues
  6.1 Anti-money laundering and counter-terrorism financing(AML/CTF) legislation
  6.2 Extension of the Do Not Call Register
  6.3 Music related issues
  6.4 Australian content in broadcasting
  6.5 Quarantine requirements
  6.6 Chemical regulation
  6.7 Plant breeding rights
  6.8 Environmental related issues
  6.9 Sport and recreation services
  6.10 Library services
  6.11 Regulation impact analysis
• Appendix A Consultation
• References