Impacts of COAG reforms: Business regulation and VET

• The Commission has been requested to report every two to three years to COAG on the economic 'impacts and benefits' of COAG reforms. The Commission is also required to consider the extent to which Australia's reform potential is being achieved and opportunities for improvement.
  • In preparation for its first report, the Commission has been requested to provide this framework report outlining its proposed approach.
• As in earlier exercises, the Commission will adopt an economy-wide approach for its assessments.
  • The proposed framework recognises the direct and wider flow-on effects of reforms. As far as practicable, costs incurred by government to achieve reform objectives and outcomes will also be taken into account.
• The framework will provide for the quantification of the impacts of COAG reforms on national economic activity, employment and income. It will also provide quantification of fiscal, as well as State, regional and other distributional effects of change.
  • The Commission proposes to use a 'dynamic general equilibrium model' to project economy-wide impacts.
• Where practicable, the social and environmental impacts will also be assessed.
  • Although not in comparable metrics, available indicators will be drawn on to help provide a broader assessment of the overall impacts of reform.
• The Commission will group reforms into three broad streams: competition and regulation; human capital (including health, education and training); and the environment.
  • The proposed framework will account for differing lead times and the implications of changing demographic and economic characteristics on reform impacts.
• Taking into account the progressive development and implementation of COAG's reforms, it is proposed that the Commission's first report provide:
  • an overview of the agenda and the potential for gains;
  • an assessment of areas of the competition and regulation stream for which policy development and implementation are advanced; and
  • an assessment of an area of the human capital stream, such as education, where agreements have been concluded and there are some realised as well as prospective impacts.
• It is proposed that the Commission progressively report across the three reform streams in subsequent reports.

Background information

Owen Gabbitas (Research Manager) 02 6240 3273