Senate Economics Legislation Committee, , 5:47:56 to 5:55:00
Technical discussion on accounting for gross versus net reductions in regulatory compliance costs when new regulations are introduced.
Topics: Government spending, Efficiency dividend
Speakers: James Kelly, Senator Dean Smith, Hon Katy Gallagher, Unknown Speaker
Uh thank you very much and good afternoon to you. I just wanted to just very briefly just continue a line of questioning that Senator Little was pursuing. So, in regards to the 718 million dollar red tape reduction in financial services. How in the how in that figure and how in the reporting does an increase in the So an initiative of government to increase regulation. How and then how does that get recorded or accounted for if then that same regulation is part of the regulations that are subsequently reduced or removed.
Um so what you are you asking about the specific ones in the budget where we're I'm asking about the 780 million. Ah, right, so a subset of the regulatory reform agenda. Yeah.
Get the 780 million red tape reductions in financial services.
Um Senator, um I'd say like in some ways we do the count based on decisions taken by government and our estimate of the regulatory impact of them. For the purpose of that 780 million dollar package or the Board of 10.2 million dollar package. It was a set of decisions being taken to uh reduce regulatory burden. Um any any decision that's to reduce regulatory burden that unwinds uh an existing piece of legislation or a private previous decision is always in some ways going back and unwinding something that um you know government has imposed. So they all kind of share that sort of similar issue, like there's no Way of reducing regulatory burden that doesn't involve unwinding something the government's imposed in the past. So that's but what we haven't tried to include in those packages because they are packages which are all about reducing regulation. We haven't tried to capture everything government does because as it's been, I think said many times, it's not a kind of deregulation agenda, it's a kind of better regulation agenda and the legitimate areas where government will sometimes need to regulate or kind of change regulations. And Senator Pocock's questions go to one of those areas that's a matter of public debate today.
So I suppose what I'm trying to understand is is it a gross or net reduction in red tape?
So it is the as we discussed at the last estimates, it is the it is like both the gross and net reduction would take from those measures because they're all measures that reduce regulatory burden.
But you so a regulatory burden or regulatory compliance of this value is introduced. Then a regulatory compliance arrangement is removed of this value, it still leaves that value. So it hasn't actually been. No, but you're not are you moving like for like? Are you moving regulatory burdens that are of similar value?
I think we're like in the sense of we're counting the saving from a decision of government in the same way that we would count an OAA, I think publishes on an you know kind of produces an annual stock take of them of the net so OAA produces a number that says here's the total net regulatory burden of all the decisions taken by government whether positive or you know, whether they ends up being positive or negative, and it publishes that, and I think it gives a bit of breakdown on the kind of major aspects of that. So that's you know, that in the system that's that measure that lags a bit. This is a package that was about let's explicitly look at things to reduce regulatory burden in the financial sector regulatory space. We came up with a package of I would say it's 960, but of that seven six seven hundred and sixty million related to things the government then had to implement the just going from a certain level of stock, reducing it down, but you know, clearly in you know one of those measures is the financial accountability regime. Regulators have already taken the steps to make that simpler. We're consulting on one thing to make that simpler, and there's some other commitments, but there will still be a uh financial accountability regime sitting there at the end of the day, which has a regulatory burden, which is something we've always got to be conscious of when we think about its ongoing value to the system versus the costs it imposed.
So if if the government added a billion dollars in uh new reporting, new climate reporting red tape. So added a billion dollars, and then removed 400 million dollars of that. Is that does the document or the report show that as a cut or as a net increase?
So Senator Lake, I think I think as I so as I said, that's kind of fiscal group's responsibility, but the way I think about it is the parliament has passed legislation to give effect to those to that regulatory.
Not unanimously.
But the parliament has passed it and now the government is making a decision to reduce that burden. Now, any burden that reduces our parliament must have previously passed, or some regulator must have previously imposed. Yeah, but we can't become removal.
But the point here, but the point here is that the Ministry is trying to claim credit for 750 million dollars worth of uh uh I don't know if it's credit.
That's what it's been considered if those um uh reforms are implemented.
So it may well be that sorry, Minister.
Well, that's I've made my point. I was being concise.
Right. So we're not talking about we're not talking about lighten the regulatory burden uh just of regulatory imposts of this government.
Well these arrangements that we are looking to reform have not been necessarily I would have to go through them one by one, but have been around for a while, some of them longer than others.
And so new regulatory imposts aren't being removed?
I don't know what So Senator, in the list, you know, in that list of 14 climate-related financial disclosures you would say has been uh um a measure introduced by the current government. If I pick to the if I look at the financial accountability regime, that was um an initiative originally in a different form of um uh Treasurer Morrison.