META Deregulation HubThe nature of international trade has changed markedly in recent years. Advancements in technology, and the effects of globalisation mean that Australian companies face far greater international competition. Being a high cost country, Australia needs to be actively working to reduce unnecessary red and green tape in order to assist companies to compete and win in global markets. Manufacturing is one industry where reducing the regulatory cost burden has the potential to make a significant impact.
Deloitte’s Access Economics estimates that the economic benefit of removing $100 million in regulatory costs in the food and grocery manufacturing sector would lead to around $250 million in additional GDP, over 250 new jobs and an increase in exports of $35 million.
In 2013, Australia was ranked 16th in the world in terms of international competitiveness by the Global Manufacturing Index. However, it is forecasted that Australia will drop to 17th in the next 12 months.
ITS Global indicate that indicate that Singapore provides the international benchmark for best practice regulation. The benefit from reducing the burden of regulation on manufacturing will depend on the degree of deregulation that is achieved. If Australia were to achieve that benchmark, the burden of its regulation would be reduced by at least two-thirds.
The ECA believes that in order to restore confidence and health to Australia’s trade sector, deregulation of red and green tape associated with investment, competition and trade needs to occur. Indeed, the Productivity Commission estimates that reducing red tape could add as much as $12 billion to national output.