Article by Saxon Davidson, courtesy of The West Australian.
Australia is in desperate need of economic reform. Productivity is low, private investment is stagnating, and Australians are personally struggling after nearly two years of a per capita recession.
We need our political leaders to advocate for and deliver policies that grow our economy, increase living standards, and unlock prosperity for everyday Australians.
Fortunately, they only have to look to the recently elected Finocchiaro Government in the Northern Territory for inspired economic leadership.
The Territory Government has announced it will appoint a “Territory co-ordinator” with statutory responsibility to fast-track economic investment by streamlining the regulatory approval processes for projects of major economic significance.
The Territory co-ordinator will be able to do this by way of an “exemption notice”, in which the co-ordinator or the Chief Minister recommends to Parliament that red tape be ignored in cases where compliance would lead to undue and unnecessary delays and reduce the likelihood of future investment in the Territory.
In an age when economic reform is easily misunderstood and under-appreciated by the electorate, it is promising to see a government in Australia taking action to reduce red tape and prioritise economic competitiveness.
This is desperately needed in the NT.
Over the past two years private investment has grown by just 34 per cent, compared with growth in public sector investment of 191 per cent.
This gap is unsustainable, as only private sector investment can drive meaningful and sustained economic growth.
The streamlining of project approvals will allow for long-term, sustainable investment in the NT, and greater employment opportunities for young Territorians — helping ensure they can build a long-term career and raise a family in the Top End.
But this policy approach needs to be followed by others, especially the WA and Federal governments.
With the Territory taking red tape reduction seriously, it makes industries in the West less competitive and a less favourable environment in which to do business.
This is especially true given the industries that will benefit from this policy shift, particularly mining, operate extensively in both WA and the NT.
Research by the Institute of Public Affairs revealed that in WA alone there are 108,927 restrictive terms in State legislation and regulation.
Adopting an equivalent policy of deregulation in WA would enable the State Government to recognise those regulations which are not fit for purpose and are holding the State back.
Other States and Territories adopting the policy should expand the concept so that a “red tape co-ordinator” can recommend the permanent repeal of regulations, rather than just on a project by project basis.
The first job for such a co-ordinator should be to cut the red tape locking up land from residential development and, in so doing, ease the cost of building new houses.
At the Federal level a red tape co-ordinator could slash the excessive regulations that are applied nationwide.
Australia has never had more red tape imposed on businesses than it does now, and this is reflected most obviously in nation-building projects that take far too long to get off the ground.
This occurs due to the sheer size and excessiveness of the regulatory bureaucracies at both the Federal and State or Territory levels.
IPA analysis revealed that there are going to be over 100,000 bureaucrats in the Federal Government alone who are responsible for policing red tape by the end of this financial year. On top of that, there is the activist class which delays projects through lawfare.
The radical and taxpayer-funded Environmental Defenders Office’s recent, failed, legal challenge to the Barossa Gas Project in the Timor Sea, first approved back in early 2018 but still to begin operations, is just one example of delay through baseless litigation.
The delay, and sometimes eventual cancellation, of these projects damages Australia’s reputation as a place in which to invest, prevents economic development, and costs jobs. Policy reform is urgently required to cease this economic decline.
The hardest part of enacting serious reform is to take the first step.
Now that the NT has done that, it’s time for the rest of the nation to get on board and unleash our economic potential.
Saxon Davidson is a research fellow at the Institute of Public Affairs
