11 March 1996 - 3 December 2007
REPORT OF THE TASKFORCE ON REDUCING REGULATORY BURDENS ON BUSINESS — FINAL GOVERNMENT RESPONSE
The Treasurer today announced the Australian Government’s final response to the Banks Taskforce report Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business, addressing all 178 recommendations of its recommendations. The Government has agreed in full or in part to 158 of the recommendations.
Regulation is a major concern to all businesses and especially small businesses. The Australian Government is leading the way in reducing the burden of red tape to improve the economic environment further so that all businesses, large and small, can prosper and grow.
In its final response, the Government commits to address the regulatory burden across a wide range of sectors and business activities. Action in specific areas includes:
- tougher rules for making new regulation, including cost benefit analysis;
- screening of all regulation at least every five years;
- work to harmonise State and Territory conveyancing laws;
- work towards a single regulator for mine safety;
- an FBT reporting exclusion for pooled motor vehicles;
- improved education and advice for occupational health and safety;
- a review of the thresholds for the definition of a large proprietary company;
- a simplified accounting method to be developed for small restaurants, cafes and caterers;
- commencement of work on the national streamlining of business names through the ABN/ABR system;
- alignment between definitions of small business, employer and associate; and
- aligning training and licensing and mutual recognition of occupational licensing.
The response to the report’s recommendations includes measures announced in our interim response to the report in April 2006, including:
- an increase in the minor fringe benefits exemption threshold from $100 to $300, effective from 1 April 2007;
- an increase in the fringe benefits reporting exclusion threshold from $1000 to $2000, effective from 1 April 2007;
- a halving of the incorporation fee from $800 to $400, at an estimated cost of $216.4 million over the budget forward estimates period with effect from 1 July 2006; and
- allowing companies to make annual reports available on the Internet and to send hard copies on request.
These improvements are in addition to the range of taxation and superannuation measures I announced in the recent Budget which will benefit business and reduce red tape. The Banks Taskforce recommended that the Government give high priority to comprehensive simplification of the tax rules for superannuation. The Government has announced a comprehensive plan to simplify and streamline the tax rules for superannuation including greater flexibility in how superannuation savings can be drawn down in retirement. This will drastically reduce complexity of tax arrangements that currently apply to Australians’ superannuation benefits. Small business tax relief arrangements have also been significantly simplified (see Attachment).
The report made recommendations across a wide range of sectors, including health and aged care, labour market regulation, consumer regulation, environmental and building regulation, financial, tax and superannuation regulation, and trade. It also made a number of important recommendations to address the underlying causes of over-regulation.
The final response acts in both these areas:
- It addresses costly red tape in specific areas of concern.
- It introduces a strengthened regulation-making and review framework to ensure ongoing gains.
The Government endorses the six principles of good regulatory process set out in the report and is announcing measures to ensure they are adhered to. The principles are:
- establishing a case for action;
- examining alternatives to regulation;
- adopting the option that generates the greatest net benefit to the community;
- providing effective guidance to relevant regulators and affected stakeholders;
- reviewing regularly to ensure the regulation remains relevant and effective; and
- consulting effectively with stakeholders at all stages of the regulatory cycle.
A key step the Government is taking towards reducing the regulatory burden is in ensuring that systems are in place to guard against the introduction of unnecessary regulation and improve the quality of existing and new regulation. This means that gains will continue to be made into the future. Government ministers will ensure that these strengthened processes are implemented in their respective portfolios.
The Office of Regulation Review in the Treasury portfolio will be strengthened and reoriented, becoming the Office of Best Practice Regulation. It will work closely with government agencies as they develop policy proposals in order to prevent the generation of unnecessary new regulation. Furthermore, the Government is mandating appropriate levels of regulatory analysis, including through the use of the ‘Business Cost Calculator’, also available to businesses, to quantify in dollar terms the compliance cost of proposed regulatory options. The Government will also undertake annual reviews to examine the cumulative stock of regulation and identify an ongoing red tape reduction agenda.
The Australian Government through COAG will be seeking agreement to apply the improved regulation-making framework to the work of ministerial councils.
To improve consultation with business and to ensure that businesses and their representative associations have better access to the range of information, reviews and other work being conducted across the whole of government, the Australian Government will establish a Business Consultation Portal through the www.business.gov.au website. The Government will also be stepping up efforts to present information to business in a user-friendly manner through a ‘New to Business’ guide, and will be examining the feasibility of introducing a business reporting standard to simplify the information businesses supply on a regular basis to government agencies.
The Banks report made a number of recommendations relating to corporate and financial services regulation. My Parliamentary Secretary, the Hon Chris Pearce MP, announced yesterday a comprehensive package of corporate law reform proposals, which follows the release of a discussion paper on 7April2006 seeking comment on a range oftopicsto reduce the regulatory burden. The reforms will be progressed principally through the Simpler Regulatory System Bill.
In many areas, regulation reform and red tape reduction are best achieved through cooperation between governments. COAG has committed as part of the new National Reform Agenda to work together to reduce the regulatory burden on business from all three levels of government and to improve regulation-making processes. At all levels of government we need to ensure that the regulation we have in place is effective and efficient, and that new regulation is not unnecessary, burdensome, costly or restrictive. We also need to ensure that any proposed regulation is an appropriate and measured response to the problem we are trying to address.
COAG members are actively working to address overlaps and inconsistencies in a number of regulatory ‘hotspots’, including occupational health and safety, chemicals and plastics, trade measurement, building regulation, business name registration, personal property securities and product safety, all of which are issues raised in the report. The Australian Government seeks the continued cooperation of States, Territories and local government to translate COAG’s commitments into real reforms that will deliver tangible benefits to industry.
One area of particular concern to business where the report made a number of recommendations is the regulation of occupational health and safety across all jurisdictions. The Australian Government considers it imperative that COAG work to deliver greater national consistency in occupational health and safety, in keeping with its decision that there be no reduction or compromise in standards for legitimate safety concerns in current occupational health and safety standards.
In the area of chemicals and plastics regulation I am pleased to announce that a comprehensive study will be undertaken by the Productivity Commission, which may inform the work of the Ministerial Taskforce on Chemicals and Plastics that COAG agreed to establish in February 2006.
I would like once again to commend the work of the Taskforce members, GaryBanks, RichardHumphry, Angela McRae and Rod Halstead, as well as the supporting Secretariat.
The Australian Government’s final response is available for download at www.treasury.gov.au
The report of the Taskforce is available at www.regulationtaskforce.gov.au
15 August 2006
Contact: Renae Stoikos
02 6277 7340
2006-07 Budget initiatives
The Government’s 2006-07 Budget made significant announcements to help business. The Government is sweeping away the raft of complex tax arrangements and restrictions that apply to superannuation benefits by:
- allowing the self-employed to claim a full deduction for their superannuation contributions as well as being eligible for the Government co-contribution for their personal post-tax contributions;
- abolishing reasonable benefit limits;
- replacing age-based restrictions limiting tax deductible superannuation contributions with a streamlined set of rules; and
- allowing deductible superannuation contributions to be made to age 75.
For small business, the Government also announced:
- tax cuts of $435 million over four years, in addition to the $36.7 billion in personal tax cuts which benefit all Australians;
- improvements to capital gains tax (CGT) concessions by making changes to the maximum net asset value test, the 15-year exemption, the retirement exemption, the small business rollover, and how the concessions apply to partnerships; and
- improved access to the small business CGT concessions by replacing the current 50 per cent controlling individual test with a more generous 20 per cent significant individual test.
The Budget also introduced measures to cut taxation red tape, by simplifying the alignment of various small business tax relief arrangements contained in the tax laws, including the simplified tax system (STS), capital gains tax, GST, fringe benefits tax and pay-as-you-go (PAYG) instalments from the start of the 2007-08 income year. This measure includes:
- an increase to both the STS annual turnover and the GST cash accounting thresholds from $1 million to $2 million;
- removal of the $3 million depreciating assets test from the STS eligibility requirements;
- an increase in the net assets threshold for the CGT small business concessions from $5million to $6 million;
- allowing STS taxpayers to be eligible for the CGT small business concessions without having to satisfy the net assets threshold and to pay quarterly PAYG instalments on the basis of GDP-adjusted notional tax; and
- introducing ‘smart form’ technology to make it easier for businesses to fill out common government forms, as well as enhancements to the Business Entry Point to facilitate the use of electronic signatures.