9
Priorities for reform
9.1
Introduction
Good regulation is one of the essential underpinnings of a modern market-based
economy. Regulation, along with government expenditure and taxation is one of
the three key policy tools available to government. Efficient and effective
regulation — among other factors — is important for improving Victoria’s
economic competitiveness, ensuring that the state remains an attractive location
to live, work and invest.
The terms of reference for this inquiry asked the Commission to identify areas of
regulation that should be reduced or reformed as a matter of priority. The
Commission has sought to identify areas of regulation that impose unnecessary
compliance costs on businesses and the community, but also any areas of
regulation that are in need of reform. During the inquiry, business and
not-for-profit organisations (NFPs) reported various examples of unnecessary
costs arising from unduly onerous, complex, duplicative and/or redundant
requirements. The Commission sought areas of reform where change was
possible without undermining the Government’s underlying policy objectives.
Following the approach outlined in chapter 2, the Commission has examined
numerous regulatory areas and formulated around 30 draft recommendations
that seek to improve regulatory efficiency and effectiveness in Victoria. These
recommendations are of three main types (1) stock-takes and actions to complete
reforms already identified in other inquiries or studies, (2) recommendations for
inquiry or review of particular regulatory areas and (3) recommendations for
specific changes in regulations that would deliver gains relatively quickly.
This chapter discusses the Commission’s analysis and recommendations under
the following themes:
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completing current reforms (section 9.2)
initiating major reviews (section 9.3)
implementing specific new reforms (section 9.4).
The chapter also discusses the priority action areas and outlines a timetable for
implementation (section 9.5).
9.2
Completing existing reforms
The context of this inquiry is one of ongoing reform. Regulatory reform has
been a major focus of government — both state and federal — in recent years.
In Victoria, there have been whole-of-government reforms such as the Reducing
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the Regulatory Burden (RRB) Initiative as well as reform of specific regulatory
areas.
Significant progress has been made in reducing regulatory burdens on business;
many departments and agencies have reported administrative cost saving to
business as part of the RRB Initiative — estimated at about $246 million a year,
based on current initiatives (DTF 2010b, p. 12). There have also been numerous
reviews or public inquiries into different areas of Victorian regulation by bodies
such as the VCEC, the State Services Authority, and numerous taskforces or
expert committees. Some Commonwealth and national regulatory reviews are
also relevant to Victorian regulation.
However, a major theme emerging from this inquiry is that of slow and
uncompleted reform. Despite many of the recommendations from these
inquiries and reviews being supported by the former Government, a substantial
number have not been translated into action or have been implemented only in
part. For example:
In the area of environmental regulation, the extent to which government
decisions on the VCEC’s recommendations on native vegetation have been
implemented is unclear. This is also the case for government decisions
relating to some other VCEC inquiries, such as that on the sharing of
government and community facilities.

In the area of NFP regulation, there have been numerous reviews at the state
and Commonwealth levels, but there are perceptions that the
implementation of reforms in some areas — particularly at the national level
— has been slow.

In the area of workers’ compensation and occupational health and safety
(OHS) regulation, some reforms are yet to be implemented. The decision on
changing the formula used to determine contribution fees for self insurers in
Victoria has been deferred, despite the issue having been examined by
several inquiries and reviews. In addition, action to reduce some duplication
between Commonwealth and state agencies in the area of OHS regulation is
yet to occur.
Several of the Commission’s draft recommendations are intended to accelerate
the pace and implementation of existing regulatory reforms. The Government
should urge departments to prepare implementation statements for recent and
future reports after two years. The Commission has proposed that for the
Commission’s previous inquiry into environmental regulation, the Government
produce a progress report on the implementation status of recommendations
that it supported. This will enhance accountability and help realise the gains from
reform more quickly. In the area of NFP regulation, the Commission sees an
important role for the Office for the Community Sector as a facilitator of
reform.
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As a final safeguard, post implementation reviews should identify any existing
reforms that have not been implemented.
9.3
Initiating major new reviews
As well as the lack of progress in implementing existing reforms, there is
evidence that new reforms are required in several key areas of regulation:
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In the area of education and training, there is substantial evidence of
unnecessary regulatory burdens being imposed on Technical and Further
Education (TAFE) institutes. These organisations appear to face onerous
and duplicative reporting, data collection and auditing requirements. There
appears to be potential for significant cost savings from simplifying current
arrangements.
In road and transport regulation, major reform of the taxi-cab industry is
long overdue. The industry is afflicted by a range of serious problems which
adversely affect its performance including the availability and quality of
services.
There have been numerous piecemeal changes to liquor control regulation in
recent years which cast doubt on the coherence of the overall regulatory
approach. Incidents of alcohol-fuelled violence and public disorder detract
from community amenity, but can also disproportionately impact on
community and international perceptions of public safety in Victoria. The
Commission’s draft recommendation is to review liquor control legislation
and it has sought comment on whether a wider review is appropriate.
In the environment regulation area, there have been numerous state and
national initiatives (such as energy efficiency, renewable energy and solar
energy targets), raising questions over the necessity, effectiveness and
interaction of these measures. These need to be reconsidered in the context
of the Commonwealth proposing to introduce carbon pricing legislation.
The Commission has proposed an independent review of state-based climate
change legislation and regulation.
In the area of planning, substantial reform and regulatory change is currently
underway. The Commission considers, however, that it would be timely to
take stock of the totality of review and reform work. It is, therefore,
proposing to recommend that the Victorian Government publish a progress
report on work underway to reform the planning system.
Consequently, the Commission has proposed recommending reviews or inquiries
into these key areas of regulation.
Although there have been important steps towards risk-based regulation in some
areas of regulation (for example, the risk-based classification of food premises,
risk-based liquor licence fees, and EPA Victoria’s recent review of compliance
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and enforcement), there appears to be scope to strengthen risk-based approaches
in these and other areas of regulation. For example, the definition of ‘high risk’
licensed liquor premises used to apply certain licence conditions could be
reviewed. There also appears to be potential for greater application of risk-based
compliance and enforcement strategies, such as in the TAFE sector and the
residential tenancy market. The reviews and inquiries that the Commission has
proposed in this report are an opportunity to explore the appropriateness of
risk-based approaches in these areas of regulation.
9.4
Implementing specific new reforms
In addition to the major reviews or inquiries noted above, the Commission has
formulated a number of draft recommendations of a more specific nature. These
are outlined in table 9.1. Many of these are capable of implementation and
delivering gains in the short term.
Table 9.1
Specific reforms in various areas of regulation
Regulatory area
Draft recommendation
Health & food
safety
Department of Health to develop a Memorandum of Understanding with
the Commonwealth Department of Health and Ageing that formalises
processes for cooperation that result in aged care providers only needing to
report infectious disease outbreaks to one organisation and remove any
duplication in inspections and reporting for health and safety standards.
Environment &
land use
Appropriate landfill levies to be assessed by the Essential Services
Commission.
Simplify Authority to Control Wildlife (ACTW) processes, and allow
limited commercial use of kangaroos and wallabies culled under ACTW.
OHS &
workers’
compensation
WorkSafe Victoria to develop a Memorandum of Understanding with the
Commonwealth Aged Care Standards and Accreditation Agency that sets
out protocols for sharing information on OHS matters.
Essential Services Commission to review the formula used to determine the
contribution fees paid by self insurers in Victoria.
Department of Treasury and Finance to examine key options to address
inconsistencies in workers’ compensation schemes in Australia to
determine which option would be of most (net) benefit to Victoria.
Social regulation
Victorian Government to renew the Office for the Community Sector’s
responsibility for implementing reforms to reduce the regulatory burden on
NFPs in Victoria, and to extend its responsibility to advising the
Government on national consistency issues regarding NFP regulation.
Tenancy & fair
trading
Department of Justice to review the Residential Tenancies Act and related
regulations.
(continued next page)
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Table 9.1
Specific reforms in various areas of regulation
(continued)
Regulatory area
Draft recommendation
Victorian Government to remove statutory requirements for landlords to
notify the Small Business Commissioner of new or renewed retail leases
and for the Commissioner to maintain an information register of these
notifications.
An interdepartmental committee, chaired by the Department of Justice, to
identify and examine fair trading provisions and cross references to the Fair
Trading Act in industry-specific legislation to establish whether these
provisions are necessary.
Victorian Government to amend motor car traders legislation to reduce the
requirement to retain documents to a minimum of 5 years from the date of
their creation.
Across multiple
areas
Department of Business and Innovation to examine key options, including
that of a centralised licensing system, to improve online interaction
between businesses/NFPs and Victorian regulators.
Victorian Government to require Victorian regulators that do not currently
have the facility for online lodgement of application forms and payment of
licence fees to examine the case for doing so.
Victorian Government to amend the Monetary Units Act 2004 to allow a fee
unit to be expressed as a decimal when specifying a fee under 1 fee unit.
Victorian Government to publish progress reports for VCEC final reports.
Source: VCEC.
9.5
Reform priorities and timetable
As a result of this analysis, the Commission has developed about 30 draft
recommendations across a diverse range of regulatory areas. In addition, the
report contains a large number of information requests which — subject to the
information received — could ultimately lead to further recommendations.
Taken as a whole, the current draft recommendations would constitute a
significant regulatory reform agenda which could not all be actioned immediately.
As noted in chapter 2, to prioritise the regulatory areas, the Commission
considered each area against four criteria:

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the size of the regulatory burden, and the potential benefit to
competitiveness, productivity and liveability over the short and long term
from addressing the area
the capacity for improvement without compromising policy objectives
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

the extent to which the issues are well understood and the need for action is
clear
the policy environment is changing substantially and existing regulation is
likely to be obsolete or obsolescent.
Based on these criteria, the Commission considers that the areas of highest
priority are:
(1)
(2)
(3)
(4)
(5)
environment protection and climate change
planning and land use regulation
vocational education and training regulation
taxi cab and hire car services regulation
liquor licensing regulation.
The Commission also considers that, in addition to these five priority areas, there
are other areas that could potentially be included in the list but which require
more research and analysis. These potential priority areas are:
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occupational health and safety and workers’ compensation
administration of state taxes and charges
road safety regulation
fair trading regulation.
The Commission also considers it important for the Victorian Government to
put in place processes for accurately tracking the implementation progress of
actions already put in place.
This priority list does not imply that the other draft recommendations in this
report are unimportant. In responding to the Commission’s final
recommendations the Victorian Government should develop an implementation
program outlining actions and timeframes to ensure that all the
recommendations are eventually implemented.
9.5.1
A timetable to focus efforts
Dealing with the four priority areas identified above would involve a
combination of specific actions and additional reviews. The Commission
considers that there is a time path over which burden reductions will be
achieved. Some can be undertaken almost immediately, while others, such as
where additional reviews are required, can be initiated relatively quickly but the
ultimate burden reductions may not occur for some time — possibly several
years.
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Priority action area 1: Take stock and implement existing reforms
The Commission considers that there is substantial benefits to be achieved by
implementing the many reforms that have already been identified. There is a
significant task to take stock of and complete implementation of existing
reforms. This is expected to particularly reduce the regulatory burden in the
following key areas of regulation:
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environmental regulation
NFP regulation
reform of the planning system.
The Commission considers that the gains — in terms of reducing regulatory
burdens — from taking stock and implementing existing reform will start to be
realised in the short term.
Priority action area 2: Initiate major reviews
Initiate major reviews of identified areas of Victorian regulation; that is:
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TAFEs and their regulation
taxi cab and hire car industry and its regulation
liquor industry and its regulation
climate change initiatives.
The gains from any new reforms stemming from these major reviews will take
longer to accrue because the reviews may take up to a year or even longer to
complete and the Government needs to consider the proposed reforms. This
timeframe makes it important to commence these reviews as quickly as
practicable.
Priority action area 3: Implement specific reforms
As part of its analysis, the Commission has identified a range of specific reforms
that, once implemented, will reduce regulatory burdens faced by businesses. The
Victorian Government should implement specific new reforms recommended by
the Commission.
The gains from specific new reforms will start to be realised in the short term.
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