Although often characterised as a period of deregulation the last decade has witnessed a continuous addition to the regulatory burden of Australia. Corporations and taxation laws have been regularly changed and seem always to have new proposed amendments imminent. Other statutes are subject to periodic ‘initiatives’: from trade practices, anti-money laundering, privacy, and grouped proceedings to product liability, environmental penalties, suspect transactions, equal opportunity and ‘simplification’, to name but a few. The Financial Services Reform Act (FSRA) came into effect in March 2004 and while not impacting on equipment finance itself, placed far-reaching and onerous requirements on many of the institutions that offer it. Although the Government through its Corporate and Financial Services Regulation Review, has moved to ameliorate the FSRA’s impact for the future, this will not recover the extensive sunk costs. In a similar vein Australia’s anti-money laundering (AML) framework is currently undergoing major change, within the context of international obligations agreed by Australia, and despite adopting a risk-based approach to customer identification and account monitoring, the proposed framework has imposed further major compliance cost.
While it is appreciated that a complex modern society requires an up-to-date regulatory framework, the impact of this constant change on business certainty and incentive is often ignored and the equation of good government with more legislation rather than with better management has a sapping effect on confidence.
On the positive side, the National Competition Policy adopted by the Council of Australian Governments (COAG) has over recent years played an important role. Its February 2006 in-principle decision to adopt a common framework for benchmarking, measuring and reporting on the regulatory burden on business is welcome and hopefully will lead to an effective means of over-sighting this accumulating burden or forcing each new proposal to rigorous cost/benefit analysis. Building on this, COAG’s Business Regulation Competition Working Group has identified a range of reforms to move Australia to a seamless national economy. A heightened role for the Office of Best Practice Regulation is also welcome.