Regulators offer fresh ideas to slash red tape following roundtable

In a joint release last Friday (5 September), Treasurer Jim Chalmers and Minister for Public Service, Katy Gallagher, said a “clear consensus” was reached at the August Economic Reform Roundtable regarding the need for regulatory reform.

In July, the government called on Commonwealth regulators to brainstorm ways to cut red tape and “de-clutter” regulation. On Friday, they released letters from 38 regulators containing over 400 ideas on how to reduce regulatory burden and boost productivity.

“Today I have written to the Council of Financial Regulators (CFR) and other financial sector regulators asking them to identify additional actions to de‑clutter and improve regulation, including facilitating a deep dive on financial sector regulation,” Chalmers and Minister Gallagher said in a joint release.

“Better regulation was a big focus of the Economic Reform Roundtable and it will be a big focus of Labor’s economic agenda moving forward.”

Following a decade of stagnant productivity, the Labor government declared resuscitating Australia’s productivity growth as its top economic priority, as the post-pandemic inflation spike waned.

In mid-August, the government hosted its much-touted roundtable, which brought together Australia’s leading policymakers, advocates and academics to brainstorm ways to boost productivity. One clear reform area that emerged was reducing regulatory burdens.

In its bid to curb regulatory complexity, the government said it would alter statements of expectations for Commonwealth regulators to support a “better balance between outcomes and risk.”

It also pledged to remove “frustrating” duplicative processes, and progress towards a ‘tell-us-once’ principle on how individuals and businesses engaged with the government.

Chalmers and Minister Gallagher said the plethora of suggestions put forward by Commonwealth regulators would inform “priority areas” for reform. Some areas, such as streamlining and harmonising data collection, were already earmarked for reform.

In a bid to support the government’s productivity agenda, financial regulator ASIC pledged to streamline regulation based on stakeholder feedback. Accounting bodies have previously called on ASIC to review its entry requirements for financial advisers and auditors, which some have described as overly onerous.

In its letter, the ATO acknowledged that taxpayers found some aspects of tax law complex and time-consuming. It said it would aim to make compliance easy while ensuring that deliberate non-compliance had consequences.

It reflected on prior successes, such as the reduction in compliance time associated with individual tax returns, which fell from an average of 8.5 hours in the mid-90s to less than 15 minutes using the current myTax platform, according to ATO estimates.

Going forward, the ATO said it would strive to achieve similar efficiency gains for businesses, including potentially moving tax administration to businesses’ natural systems, rather than needing to acquire and hold large volumes of business data.

“We see advantages of this work in that it helps small business taxpayers to minimise their chance of making a mistake and coming to our attention, whilst improving integrity in the system,” the Tax Office letter read.

“Ultimately, it will mean that businesses are able to think less about tax and focus more on their business.”