On the Agenda

Government Regulation &  Reducing Red-Tape



The community sector has been raising the issue of 'red-tape' for several decades. As early as the 1980s, peak bodies were attempting to get government funding bodies to understand the impact of the various accountability requirements on community services and health NGOs. As calls increased from the private business sector, and evidence began to mount of the costs to small business in particular, the issue of government regulation began to be taken more seriously by government.

COAG (Council of Australian Government) committed State and Territory governments to 'red-tape reform' and several State governments reviewed practices and instituted policies to reduce red-tape, with specific inclusion of the funded community services sector. In 2010, the Productivity Commission conducted a specific inquiry into the 'Contribution of the Not-for-Profit Sector', which had as one of its aims: "... to identify unnecessary burdens or impediments to the efficient and effective operation of community organisations generally, including unnecessary or ineffective regulatory requirements and governance arrangements, while having regard to the need to maintain transparency and accountability.' The report of this inquiry led directly to a red-tape reform process and the establishment of the Australian Charities and Not-for-Profits Commission (ACNC).

Our take

Governments struggle with the mechanics of reducing red-tape.

They struggle with understanding how regulations actually impact on smaller organisations, and can easily end up creating more 'red-tape' with their solution. The ACNC is a case in point, with debate in the community sector about it actually increasing requirements while the Chair of the Not-for-Profit Sector Reform Council predicted a 'Nirvana' for NGOs and not-for-profits with the ACNC as the centrepiece (May, 2010).

They struggle with their own bureaucratic unwieldiness. One State government spent over a decade conducting a review of grants administration, with the aim of reducing red-tape in its funding relationship with not-for-profits.

Perhaps, we should look to a 'red-tape trading scheme' like that proposed by Oliver Hartwich (Research Fellow at the Centre for Independent Studies) in his paper, 'Towards a Red-Tape Trading Scheme: Treating Excessive Bureaucracy as Just Another Kind of Pollution' (May 2010). Hartwich argued creatively for an intra-government trading scheme where government departments would have to cut the regulatory costs they impose or otherwise purchase 'pollution' certificates from other departments.