Business Environment Conservation by st1nk778


									                 Business Environment
                                                     JIM HOGGETT

            NE of the regular ‘periph-    The examples are numerous.                the form of ‘If you want to do A, you

     O      erals’ of election cam-
            paigns featured again in
            2004. The major parties
                                          More Tax
                                          The GST is the classic new tax that
                                                                                    must do B’. So, if you want to put up a
                                                                                    building, you may have to provide fa-
                                                                                    cilities in it that are unrelated to your
both recognized the need for a strong     was designed to substitute for other      business. Or, if you want to clear 20
business sector for the continuing vi-    taxes. But apart from a few, it has not   trees, you may have to plant 200. A
tality of the Australian economy—         done much either at the Common-           company exerting this sort of lever-
particularly small business. But unlike   wealth or the State level.                age would be accused of third line
the natural environment, which is              The superannuation levy is a tax     forcing (blackmail) under s.47 of the
subject to endless agonizing scrutiny,    under another name. For companies,        Trade Practices Act.
the business environment receives         it is a compulsory payment (tax) made
scant attention.                          to private-sector tax ‘farmers’ (super-   More Confiscation
    Although the economic news is         annuation funds). For most retirees it    Confiscation of property and resources
currently good, it is an excellent time   will do little more than substitute for   without appeal or compensation now
to review the broader business envi-      the public pension. The supreme irony     appears principally as environmental
ronment.                                  was that, having set up this new levy,    legislation. Green is the new red. Na-
    So what is the environment that       the government then introduced new        tive vegetation and fauna protection
governments have created for business     taxes on super. They forced people to     laws are designed to lock up private
in Australia? What is the environ-        save for the future then confiscated a    land and resources by forbidding ac-
ment they have created for those start-   significant part of those savings.        tivity over large areas of rural Austra-
ing out on the risky path of new               The various workcover schemes        lia without compensation. The
business? What lurks behind all the       fall into the same category, as do com-   Queensland Vegetation Management
official programmes designed to advise    pulsory insurances for public and prod-   Act is just one egregious example.
and assist those brave or foolish         uct liability. Do we really need $20
enough to enter the competitive race?     million of public and product liability   More Obfuscation
    A hard look at the facts leaves one   insurance to set up a market stall?       The list of over-complex, unadministr-
abiding impression: that governments                                                able and discriminatory legislation is
in Australia are both actively and pas-   More Costs                                endless and grows every day. Any busi-
sively hostile to business.               Mandated expenditures are a cunning       ness, small or large, could present in-
                                          way of financing government policies      stant examples.
THE TECHNIQUES OF                         while keeping the cost out of the pub-        The environmental legislation
OPPRESSION                                lic budget. An example is the com-        mentioned above is a prime example.
Over recent decades, governments          pulsory courses which farmers must at-    No-one can comply with it. No-one
have adopted and adapted a series of      tend and pay for to certify them to use   can administer it. It is in a constant
techniques to oppress business. Some      agricultural chemicals—something          flux. It discriminates against the rural
of the techniques are deliberate and      they have been doing for many de-         sector even as it absorbs farmers’ re-
others are the outcome of policies de-    cades by reading the instructions on      sources in endless, fruitless ‘consulta-
signed for other purposes. The tech-      the package. The courses are provided     tion’ processes. Do we really need a
niques include:                           by third parties and thus never appear    native vegetation plan for every prop-
• Overt and hidden taxes;                 as government impositions. Various        erty in NSW?
• Mandated expenditures;                  supplementary compulsory trades cer-          Then there are the absurd and im-
• Mandated activity;                      tificates for plumbers, builders, etc.,   possible disclosure provisions in the
• Resource and property confisca-         are in the same category.                 Financial Services Reform Act where
    tion; and                                                                       ASIC becomes the Grand Inquisitor
• Impossibly detailed and/or discrimi-    More Blackmail                            of corporate morals. Then we have safe
    natory regulation.                    Mandated activities usually come in       food regulations—do we really need a

                                                                                                         REV I EW
16                                                                                                          DECEMBER 2004
100-page code manual for every small        environment which governments cre-           mental activists sitting in front of a
food producer?                              ate for the enterprising, creative people    bulldozer will generally not have their
   Finally, we have the ACT enact-          striking out on their own.                   livelihood at stake—it may be their
ing specific, discriminatory industrial         To grow and diversify is the essence     livelihood.
manslaughter laws purely for business       of a successful economy. The most suc-           For their part, small business opera-
on top of existing criminal law.            cessful overseas nations have govern-        tors will often not know of new impo-
                                            ments actively encouraging enterprise        sitions until they are notified by their
SO WHAT DOES IT FEEL LIKE?                  and keeping costs down. Though Aus-          accountant or a freelance legal consult-
Most businesses will have as little to      tralians love the wealth that business       ant that they are in the firing line
do with government as possible. It is       generates, we have a national ambiva-        again.
rarely a rewarding encounter. How-          lence towards business success. This
ever, that little turns out to be quite a   fosters governments that actively dis-       HOW CAN WE STOP THE ROT?
lot. Even family businesses face the        courage enterprise and load it with new      Stopping this cancerous growth from
usual paper warfare with which they         costs at virtually every parliamentary       further weakening our business sector
are privileged to burn the midnight oil.    and local council session.                   involves a few, fundamental changes
Internet interactions do not ease the                                                    in attitude and behaviour.
overall burden.                             WHY NO PROTESTS?                                 All levels of government should just
    Take on a few employees and grow        The level of noise from the business         stop:
your business and a whole range of new      sector is generally drowned out by the       • feeling they have to respond to ev-
costs and risks appear—unfair dis-          strident protests and demands from               ery demand from every interest
missal, multiple leave provisions, anti-                                                     group for government intervention;
discrimination programmes, superan-                                                      • trying to eliminate every risk in
nuation levies, workcover, etc., etc.       The fact is that most                            society; and
And every rule has its own bureau-                                                       • using the business sector as a ve-
cratic policeman who is anxious to             small businesses                              hicle to enact policy—virtually as
‘help’ the hapless business person in-      cannot even know all                             an arm of government.
cur the compliance costs. Such ‘help’                                                        All this does not imply more regu-
is increasingly mandatory and subject        the law that applies                        latory review agencies to examine new
to a fee. The point is that all this adds                                                and existing regulation. Experience
to the costs and extends the risks faced    to them—a sad state                          suggests that these quickly become
by business.                                                                             public service Enemy Number One
    Various government programmes              of affairs in any                         and they rarely have the support of
exist to offset the costs of policies and         democracy                              their sponsoring minister.
to provide incentives. Although help-                                                        Ministers and officials should have
ful, these are often merely temporary                                                    direct responsibility for a substantial
transfers back to those affected, are       hundreds of other special interest           rolling programme of deregulation.
limited in their impact and costly to       groups. Business concerns, particularly      This implies a significant change of
administer.                                 with the slow growing canker of incre-       attitude and operations. It will leave
    For small business the difficulty is    mental exactions and regulations, do         many politicians feeling lost. After all,
compounded by lazy governments sim-         not make good copy for the tabloids          what politicians love to do is to find
plifying their own task through uni-        or television.                               new ways of bossing the community
form legislation. Thus ‘one size fits           Business people, by definition, gen-     around. They could assuage their loss
all’—which means that small busi-           erally have very little spare time to        by reviewing and taking an axe to ex-
nesses, with few in-house resources,        study the dense verbiage of govern-          isting burdens on business. This major
face the same compliance demands as         ment documents or to travel to the           task and duty is worthy of the effort
a large business. The fact is that most     multiple government sources of the           and ingenuity of any strongly demo-
small businesses cannot even know all       anti-business policies. They face death      cratic government.
the law that applies to them—a sad          by a thousand cuts, administered by a            As a past Chairman of the US
state of affairs in any democracy.          thousand different executioners.             Council of Economic Advisers once
    We have had strong, continuing              Moreover, the reach of government        said, ‘Don’t just stand there, undo
productivity gains from the structural      into business and personal life is now       something’.
economic reforms of recent decades.         so deep and extensive that there is al-
New opportunities for structural re-        ways a fear factor for protesters that the       Jim Hoggett is a Senior Fellow at the Institute of
                                                                                           Public Affairs and has had extensive experience at
form are limited. Future productivity       official or politician with whom they         senior executive levels in government and business.
gains and economic growth in Austra-        are dealing has ways to make life un-
lia will depend more and more on the        comfortable. By contrast, the environ-                                                    I P A

DECEMBER 2004                                                                                                                              17

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