The Australian Institute of Company Directors wants whoever wins government after this year’s election to convene a national summit on reducing regulation within 100 days of their victory.
“We believe deregulation – both stemming the growth in new regulation and cutting back existing red tape – is a crucial part of the new government’s economic policy challenge. Creating a new system of efficient regulation is a key element of the agenda for boosting national productivity,” AICD chief John Colvin said.
“That is why we are calling on the next government, whoever wins the coming federal poll, to get serious about regulatory reform.”
In a white paper sent to all federal politicians, and released publicly today, the AICD said the government had passed more pages of legislation since 1990 than had been passed during the first 90 years of federation.
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“Notwithstanding the many reviews and other initiatives undertaken by or on behalf of successive governments with the aim of reducing the regulatory burden on Australian businesses, this culture of over-regulation continues,” the white paper states.
The institute said its consultations with business had uncovered costs to this approach, including Australian businesses being unable to compete with their international competitors due to regulatory handicap, red tape and overregulation forcing boards to focus on compliance over business strategy, and regulation discouraging wealth generation as businesses were discouraged from taking measured risks.
Colvin said the message was being delivered to both sides of politics, as it was important that the regulatory burden on company directors was addressed regardless of who wins the election.
“It’s the policies that are important, not the party implementing them,” he said.
In recent months the AICD has regularly raised the threat that too many regulations place on director performance. In November, Colvin said it was an issue directors often raised with him.
“I know from conversations with the director community that many great directors aren’t sitting on boards right now. They say they don’t want to be compliance officers, they want to guide company performance.”
What the AICD wants:
- A government summit on regulation to be convened within 100 days of the next election.
- Better use of the Productivity Commission as an independent assessor of legislation and regulation and as a catalyst for reform, including giving it the capacity to initiate inquiries.
- A commitment to include sunset clauses and post-implementation review provisions in legislation.
- Government departments and agencies should be required to quantify the cost to business of complying with the existing stock of regulations administered by them.
- Departments should have reportable annual targets for reducing red tape.
- There should also be a firm commitment to consult business when formulating new regulation before measures are announced as firm policy.
- Reform of a series of specific statutes affecting company directors, including reforming insolvency law, clarifying and reforming director liability laws, and abolishing the 100-member rule of the Corporations Act, which allows 100 shareholders to force a company to hold an AGM.