Jan Davis: There is no doubt that Tasmanian farmers are over-governed and over-regulated

There is no doubt that Tasmanian farmers are over-governed and over-regulated. Even the state government’s own report ‘Measuring Red Tape’ study, released last year, agreed that this was the case.

The report documented some astounding figures. The gross value of production of agriculture, fishing and forestry in Tasmania is $1.982 billion, of which the agricultural sector accounts for $1.150 billion. The total cost of red tape for those three sectors of the industry is $321.4 million a year. That figure is staggering enough as a standalone number, but it represents 16.2 percent of the value of production. It means that one dollar in every six at the farm/fishery/forest gate is lost on regulatory imposts, or simply meeting the cost of compliance.

So, where agriculture, fisheries and forestry account for 10 percent of Tasmania’s Gross State Product, they carry more than 25 percent of the total bill for compliance on this limited suite of measures. Even a very basic analysis shows that this study had a limited scope and that, by taking into account the areas that were not measured as part of the report, the actual cost could be double the reported estimate.

Challenges to maintain competitiveness on farm are already substantial with the high Australian dollar and increased input prices driving a declining terms of trade. Tasmanian farmers face the added costs of our isolated location.

The problem becomes compounded when unnecessary regulatory burdens are imposed on industry. This can arise in a number of ways, including through excessive regulatory coverage; overlap or inconsistency; unwieldy approval and licensing processes; heavy-handed regulators; poorly targeted measures; overly complex or prescriptive measures; excessive reporting requirements; or creation of perverse incentives.

We have heard of some absolute doozies.

For example, there’s the farmer who was told his plastic igloos had to have planning permission as habitable dwellings because of their size. Or the farmers who want to straighten a boundary fence, and have been told that they have to go through a full subdivision application – including a fire risk assessment. Then there’s the requirement for farmers to lodge a map of planned use every time they reregister a vehicle for limited road use; despite the fact that the usage will not have changed for farmers as they would be accessing the same points on their property. Surely it would be easier to staple the map to the registration record and only require new lodgement if there has been a change.

The list is as long as my arm.

TFGA is of the view that, while there are a range of necessary regulatory imposts across the entire agricultural sector, it is the cumulative impact of the multitude and overall accumulation of minor or peripheral regulations that underpin the industry concern. On their own, minor regulatory impacts may not appear too burdensome or costly. It is only when Commonwealth, state and locally based regulations are added to sector specific regulations that the impacts becomes clearer.

The administrative and cost burdens to comply with and carry on business in the agricultural sector are significant. We’ve made it clear that we want a wholesale reduction in red tape and what we term green tape (environmental and planning approvals) that constantly distract farmers from their day to day business.

The previous federal government introduced 21,000 new sets of regulations during the 6 years it held office. That is simply not sustainable.

So we have welcomed the federal government’s first ‘Red Tape Repeal Day’. Yesterday, they announced the first tranche of a raft of repeals to rid the statute books of more than 10,000 pieces of legislation and regulations, what the Prime Minister rightly describes as a “dead weight” on Australian businesses, community groups and households. And farms are businesses.

The plan is to have two such ‘Red Tape Repeal Days’ each year. Among other things, this first one will remove some 8000 pieces of outdated legislation dating from 1901 through to the 1960s.

The government predicts these cuts will save the national economy more than $700 million a year, with an estimated $10 million in cost reductions for Tasmania. Simplification of the registration process for agricultural chemicals alone is estimated to save farmers $1.3 million.

The Productivity Commission has estimated that removal of outdated rules and regulations could save Australians as much as $12 billion each year. That’s money that could be invested in local economies, creating local jobs – which is vital for Tasmania.

The incoming Hodgman government has been clear in its support of our platform to simplify life for farmers in Tasmania. We look forward to working with them to follow the Repeal Day precedent set by the federal government.
TFGA CEO Jan Davis’ Mercury column today