Why the red-tape hedge keeps growing back thicker
Governments keep promising to cut red tape, and sometimes they do. But the far harder job is changing the incentives that make regulation the easy answer.
This is an edited extract from Productivity Chair Danielle Wood’s long-form essay, published today in Inflection Points.
One of my first jobs as a junior economist was working on the Rethinking Regulation review. In 2006, John Howard and Peter Costello asked Productivity Commission Chair Gary Banks to identify ways to reduce burdensome, complex, or redundant regulations. We came up with a list of 178 reforms, from mine safety to country-of-origin labelling laws, and 158 of them were adopted — not a bad hit rate!
So now, as chair of the Productivity Commission, it’s with a certain sense of deja vu that I find myself again recommending governments cut away at the regulatory thickets stifling our economy. Last year, our inquiry into creating a more dynamic and resilient economy found that regulatory burden is still one of the biggest issues facing productivity in Australia.
Why is it that despite our semi-frequent attempts to trim the red-tape hedge, it just seems to grow back thicker?
