THE ECONOMIC REGULATION AUTHORITY (ERA) RECENTLY RELEASED THEIR DRAFT REPORT INTO MICROECONOMIC REFORM IN WESTERN AUSTRALIA. THIS IS A BOLD LOOK AT POTENTIAL CHANGES AND THE IMPACT THAT THEY COULD HAVE ON THE ECONOMY.
A small forest long (350 pages), the report looks at a massive range of concepts including congestion charging, retail trading hours taxis, property taxes and potato marketing.
When the report was released ERA Chairman, Lyndon Rowe, was at pains to point out that this is a draft report rather than a reflection of government intent. There are parts which stand up to scrutiny but would be politically difficult to implement and others where stakeholders believe that the ERA has missed some key facts.
The report recommends a trial period for a congestion charge for people entering into the CBD, conditional on the capacity of public transport to handle the likely increase in patronage. It also recommends introducing flexible electricity charging schemes such as time-of-use and critical peak pricing, which will modify behaviour rather than continuing to build more infrastructure.
State tax reform was also highlighted with the view to broadening the tax base and promoting more efficient taxation. Whilst it may be politically difficult to sell, removing the residential transfer duty (commonly known as stamp duty) and broadening out the application of land tax and payroll tax will overcome the inefficient use of housing that currently occurs; quite simply it can be too expensive to move so people stay in their oversized/undersized dwellings.
Of the thirty-one recommendations in the report, fifteen relate to reducing the cost of complying with regulation. Across all industries, regulatory compliance has now become a business in its own right, translating to higher costs for everybody. The report recommends the establishment of a lead reform agency which will monitor, enforce and publish performance against agreed regulatory reform targets – that one step would be a giant leap forward.
Interestingly is takes a very personal view of government performance, recommending that Key Performance Indicators for regulatory reform targets be set for senior departmental staff in recognition that the machinery of government has a human driver. All too often we hear from developers that it is not the policy that is flawed, rather the application of it at a project level.
The report is quite enlightening but we don’t agree with everything; it is clear that the ERA needs more information on the vital role that Keystart plays in the housing continuum.