Red tape reduction: just do it
South Australia has a poor record in reducing barriers and costs to small business.
Red tape reduction has been a favourite cliche of governments for countless years, without much to show for it. Last week, Premier Jay Weatherill made his latest gambit, announcing the introduction of a special public service unit to reduce red tape.
You wouldn’t have to be a cynic to question whether much will come of it: a bureaucratic unit to reduce bureaucracy is not a model that inspires confidence.
It might have been simpler if Weatherill just asked his ministers to go away and come up with concrete proposals to reduce the administrative burden on business – but that isn’t the way the consultation-obsessed Premier likes to operate.
Whatever the process, however, the need for freeing the load for business is pressing.
The most cursory look over South Australia’s economic data shows that urgent action is needed.
Our average weekly earnings are the lowest in Australia, besides Tasmania. As of last week, our unemployment rate is the highest in Australia – and that includes the island state. Our population is ageing, our key industries are either in long-term decline (manufacturing) or face enormous challenges (defence, agriculture and mining).
The interesting thing for South Australia is that a recent exercise in red tape reduction has been extraordinarily successful – albeit on a very small scale.
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I’m talking about the liquor licensing reforms, particularly the introduction of a small venue licence, which has effectively created a new class of business, indeed a new class of entrepreneurs, in South Australia.
To put it into perspective, it’s clear we’re not about to enjoy a groovy bar-led recovery – but maybe the model used to get this small reform through can inspire the government in other more significant areas.
After years of talking and hand-wringing about the extraordinarily restrictive liquor licensing system, the government – almost to everyone’s surprise – cut a swathe through cashed-up vested interests and pushed through a new category of liquor license.
The license makes it cheaper, faster and simpler for a business operator to apply and gain a license, without facing the inevitable legal challenges and regulatory hurdles previously placed in the way of hopeful bar owners.
The license provides a one-size-fits-all solution – and there’s no need for the licensee to apply for separate entertainment consent.
The features of the reform were right – it was cheap, it was fit for purpose and, at least relatively speaking, uncomplicated.
At very little cost to government, previously unloved areas of the city have been given new life.
The license hasn’t just attracted one kind of business either. While there are plenty of “small bars”, there are also restaurants taking advantage of the flexibility of the new category, including a few now considered among Adelaide’s best. In between lunch and dinner service they can now offer a glass of wine to a passing patron – radical, I know.
While the idea of a “vibrant” Adelaide replete with small bars has become a cliche, most people are loving what the license has done for Adelaide’s streets. In a tough trading environment for the hospitality industry, it also hasn’t hurt in terms of jobs.
But there is another aspect to this story that has gone largely unreported – but it sets the template for other red tape reduction efforts.
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The regulatory changes were supported wholeheartedly within the bureaucracy.
Planning and licensing officials became heavily invested in making this work – so it’s not surprising that it had the desired effect.
The people who shuffle the forms from the top to bottom of their inboxes (and vice versa), consider anomalies, prioritise or not prioritise problems etc, were agents of change – not barriers to reform.
It’s a culture that Weatherill clearly wants to replicate.
Last week he also announced that his department’s chief executive Jim Hallion would take on a “private sector development coordination role” to help projected valued at more than $3 million to clear bureaucratic hurdles.
Business SA chief Nigel McBride this morning identified another area ripe for reform – the ridiculously convoluted processes that businesses have to go through to bid for government tenders.
It’s not only that locals are losing out to interstate and overseas competitors, it’s the sheer number of person hours that needs to go into even being in the race.
“I mean why do we have to go through the same process over and over again,” he lamented on ABC radio. “Can’t we get the same details from the same company on some basic criteria and get them locked away? Give it to us once, you don’t have to give it to State Government again, it’s there on record and all you have to do is deal with the actual details of the particular tender … what is an expensive, complex and time consuming and relatively high risk process can we make it smarter, fairer, simpler?”
All good questions that the government hopes to be answered by its new “tender ready” project.
For Weatherill’s new push to be effective it will also require political leadership across all portfolios to make legislative and regulatory changes where needed.
No bureaucrat, no matter how senior, can push a project through a system enslaved by over-regulation that serves vested interests – the relevant minister needs to get out there, talk to interest groups, create a case for change, oversee the drafting of legislation and get it through a tricky Upper House of parliament.
That requires a level of strategic thinking at the political level that doesn’t seem common enough among South Australia’s political class.
Let’s hope the small success we’ve seen on the streets of Adelaide can be translated into something bigger. Our economy certainly needs it.
