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Abbott's ill-judged crusade against red tape

  • 02 March 2015

The Prime Minister has been forced to announce a proposal to toughen food labelling laws after the recent outbreak of Hepatitis A was linked to ‘Nannas’ imported berries.

The move goes against the Government’s resolve to remove red tape that represents ‘unnecessary’ compliance costs for business. As he said after news broke of the berry contamination, ‘The last thing I want to do is put a whole lot of additional requirements on business’.

The good of the consumer was a secondary justification for his initial opposition to better labelling. He said it would ‘raise unreasonably prices to consumers’ and that ‘businesses have an obligation to … ensure that the product they sell is safe’.

The government set the right tone in its early days when it established the Royal Commission into the Home Insulation Program of the previous government. Labor’s ‘pink batts’ scheme had seen unscrupulous small business interests exploit the lack of red tape, resulting in the deaths of casual employees and dangerous installations that made ordinary people vulnerable to house fires.

The Royal Commission findings, which the government supported, pointed to the need for more regulation. In supporting its findings, the Prime Minister did not exactly say that more red tape was needed, but the message was that Labor's lack of red tape was the culprit. 

The Royal Commission did not lead to an obvious appreciation of the need for regulation. Instead, the government – intent on establishing its ‘business friendly’ credentials – proceeded to dismantle regulation and consumer protection in a many areas. For example, it took down the government’s healthy food rating website. Later it dismantled financial advice protections to the extent that the Senate allowed.

The government derided red tape and presented regulation as the enemy, without making a clear distinction between regulations that are redundant and those that are needed to protect the consumer. In what amounts to a crusade, it established a website – cuttingredtape.gov.au – and instituted Repeal Days in the Autumn and Spring of 2014. It proudly announced: ’The Australian Government has a plan to cut $1 billion in red tape every year’. Those ‘caught up in red tape’ were invited to make submissions.

Red tape is the enemy of business that is either unscrupulous or only interested in short-term profit. It can be the friend of business that thinks for the long term and values certainty over ad hoc decision making.

It is undeniably the friend of the consumer, even