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A Bonfire of Red Tape

Sunday 21 Jul 2002

Speech by Hon Richard Prebble, Leader ACT New Zealand

On Sunday 21st July 2002 at 12.30pm

The ACT Party is the party that has led the fight against compliance costs.

Small business in New Zealand faces a sea of paperwork. The average small business has to comply with 57 different Acts of Parliament - and that's not including tax laws. It is said that the Inland Revenue tax regulations are bigger than 13 Bibles.

The government's own review pointed out that a childcare centre needs to comply with 39 pieces of legislation. If the centre wants to keep a rabbit, it must comply with a 38-page document.

Yesterday, one of the country's best rest-home and private hospital owners told me that if Labour is re-elected, he is selling up. The current regulations mean he has to put more effort into paperwork than into providing health services.

Labour talks the talk - but its actions are the opposite. Last year more than 360 new regulations were passed. So far this year there have been 204 new regulations. The number is growing.

ACT has surveyed 9500 small businesses - a representative sample of the 220,000 small businesses in New Zealand. They list tax and compliance issues as their principle concerns. The complexity of the tax laws, including fringe benefit tax, got particular mention.

ACT's plan to lower company tax and the top personal tax rate to 28 cents will greatly reduce compliance costs for business.

ACC is the next law that causes businesses the most compliance costs. When ACC was opened up to private competition, it hugely reduced compliance costs - and it will do so again.

Next is the Employment Relations Act. When we see law firms advertising "no win, no fee" litigation against employers, it is proof that the Employment Relations laws have sparked a new grievance industry. Only lawyers and unions have got rich.

Under the new employment laws, wages have gone up less than inflation. The number of strikes has doubled in the last 12 months and the cost of strikes has gone up 180 percent.

ACT's Freedom to Contract law will slash the red tape costs of employing staff.

The law that is costing business the most, according to Alan Dunn, chairman of the Ministerial Panel on Business Compliance Costs, is the Resource Management Act. Not only has the government not acted on any of the panel's recommendations but there are two bills on the order paper which will greatly increase the cost of the RMA for business.

One of the new bills will give Maori wider grounds to object to proposed developments, and the second will give legal aid to anyone who calls themselves a conservationist.

The panel also found that the Occupational Safety and Health Act was imposing extra costs on employers, with no benefits. Labour has not only ignored the panel but has also has a new bill to impose $500,000 fines on employers who cause their workers stress.

ACT says that all new laws should meet a cost-benefit test. To achieve this, ACT will introduce a Regulatory Responsibility Act. This will require the government to go through the statute books and repeal unnecessary, business-unfriendly laws.

Let's re-write ACC, the RMA, the ERA and OSH - all these initials that just spell C-O-S-T.

Let's have a bonfire of regulations.

I have here today a wheelbarrow full of red tape, and a wheelie-bin full of more regulations and legislation - laws that no one in business could possibly read. Yet our nation of small businesses are expected to comply with these regulations.

It is interesting to note that one of Helen Clark's reasons for calling a snap election is her complaint that the Opposition has been too effective and we have slowed up the government's desire to pass more laws. Ms Clark complains that there are 94 bills on the order paper, unpassed. Business says "thank goodness".

The present regulations are estimated to take 10 percent of every small business's time, just to comply with the paperwork. That's a cost of more than $5 billion a year.

Reducing red tape will boost investment, growth and jobs. It is a policy that is within our governance.

If Parliament sought to cut in half the compliance costs for business, we could create more than 100,000 new jobs and add $1 billion of growth a year to the New Zealand economy - every year. That would raise an extra $300 million in taxes for the government - enough to finance ACT's Zero Tolerance for Crime policy.

What we need is a bonfire of regulations. Here in this wheelbarrow and wheelie bin are some laws that won't be missed.


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