Performance benchmarking of Australian business regulation: Feasibility
Feasibility report
Released 06 / 03 /2007
The report responds to a request from the Council of Australian Governments' (COAG) that it assess the feasibility of regulatory benchmarking and put forward options.
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Overview (PDF 166.1 KB)
Feasibility report (ZIP 1.2 MB)Key Points
While much business regulation is essential, it can involve unnecessary compliance costs. Such burdens are compounded for firms operating across Australia.
Benchmarking compliance burdens could help identify where costs could be reduced, and complement other regulatory reform initiatives.
Such benchmarking is technically feasible and could yield significant benefits. However, there are methodological complexities and uncertainties about data, requiring a careful, staged approach to implementation.
Benchmarking across jurisdictions would need to be confined to areas of regulation with comparable objectives and benefits, and rely mainly on indirect indicators that would not be definitive about performance gaps.
Benchmarking compliance costs of key regulatory areas should include the costs of:
becoming and being a business, arising from one-off activities such as licensing and ongoing activities such as meeting OHS standards;
the delays, uncertainties and compliance activities associated with obtaining government approvals in doing business; and
regulatory duplication and inconsistencies in doing business interstate.
In addition, benchmarking the quality and quantity of regulation across jurisdictions and over time (including for specific business categories) would provide complementary insights into cumulative burdens and systemic problems.
It would be desirable to follow a limited and targeted program over the first three years, that would allow 'learning by doing'.
The first year would focus on benchmarking the quantity and quality of regulation, as well as compliance costs for a single area of regulation, and developing data sets for other areas. Progressively more regulation would be benchmarked in subsequent years.
Based on the likely significance of compliance burdens and other criteria, suggested priorities for inclusion in the initial three year program are OHS; land development assessments; environmental approvals; stamp duty and payroll tax; business registration; financial services regulation; and food safety.
Data for many indicators is obtainable from published sources and governments, but face-to-face surveys of individual businesses would also be needed.
Survey costs, including for business, can be reduced by targeting 'reference businesses' with appropriate attributes.
The cooperation and support of governments and business - in advising on indicators and supplying comparable data - would be crucial to the success of any regulatory benchmarking program. Advisory panels would facilitate necessary interaction.
