Politics

Captives Of An Over-Regulated Society

nanny stateOn January 4, 2011, Mahomed Bouzzazi immolated in Tunisia. There have been many interpretations of this and subsequent related events. The explanation was simple. It was individual desperation at denial by a corrupt administration of his right to earn a meagre living.

Such an extreme reaction to state power is unlikely in Australia. Nevertheless, individual regulations in Australia are often oppressive in a similar way. They abridge freedom in the same way as does the petty official in a Tunisian rural town. As we have seen with planning and licensing laws in New South Wales, they also provide similar opportunities for corruption. And cumulative, exponentially growing regulation, such as we have, is a national wet blanket.

Here are some instances of what regulators can make you do, drawn from a long experience in government, in big and small business, and in private life. They range from the trivial to the severe, from laws to guidelines. They are intended to illustrate a political and administrative proclivity that has translated into a systemic malady.

We can make you do stupid and trivial things

The New South Wales food safety regulations are of biblical proportions. One that applied to our (now defunct) dairy struck me somewhat humorously: “Rodent bait stations must be mapped or their position described.”

At first I wondered why rats and mice needed the necessary geographical information to get to their point of doom. Maybe they should be issued with a sat-nav too. But maybe the map is for those who installed the traps. Perhaps it is intended for those dairy farmers who cannot remember where their car is in the carpark.

This absurdity is from the same crowd who issued a press release detailing food safety instructions for those children who treat Mum to breakfast in bed on Mothers’ Day. It urged: “Spoil Mum safely this Mothers’ Day: top food safety tips for breaky in bed.” There followed numerous tips the kids should read before entering the kitchen.

The barbecued sausage regulations in the ACT provide a more recent example of the propensity for idle bureaucrats to dream up means of afflicting the public.

The separate health authority ably assists the food safety authority. In the absence of any detected health problems we were told to instruct visitors to our farm to wash their hands after using our toilet. We were also told that allowing our visitors to look at our dairy goats created a “Petting Zoo” with separate regulations.

In effect we were appointed lavatory attendant, zookeeper and rat-trap mapper. On top of that we had to make a living.

We can effect policies at your expense

One of the most enthusiastically adopted policy concepts is that of “user pays”. This was designed to sheet home the cost of some government services to the user. Sounds reasonable, and for a while it was. The costs and fees were then included in government budgets.

However, the pressure for more revenue and cost savings is inexorable. So sub-optimal practices creep in.

Our A-rated dairy was subject to regular audit, a service we did not want as it was clearly unnecessary. The inspector would arrive and find nothing wrong despite an obvious effort to justify the eighty-kilometre drive to the farm. The “user pays” audit fee invoice followed. We were paying government for wasting hours of our time.

In France, where the best cheeses are made, the small producers are subject to EU regulations but not to this sort of regular, pedantic waste of time and money at the production end. It is sensibly assumed that the consequences if the product manifestly fails will provide a strong incentive to maintain quality.

Regulation generally requires other forms of uncompensated effort by the private sector. The most obvious case is form-filling. Some of it is necessary to the functioning of government, although most forms will be immediately and permanently filed. The immense waves of paper and electronic data flowing into government archives must present a significant processing and storage problem as well as killing many trees. The anguished pleas of business people, teachers, nurses and police, who just want to get on with their work, are ignored as they are swept away in the paper flood.

Beyond this almost daily uncompensated effort lie the obligations that involve private expense at government direction. Some are privately levied taxes applied to achieve state objectives, such the superannuation levy and workers’ compensation. There is an in-principle case to add these quasi-taxes to the official totals of government tax and spend.

Some obligations arise from state directions to spend money with private institutions. These include training for maintenance of licences and testing regimes covering, among other things, soils, water and food products. Such regulations have created a large shadow quasi-government sector feeding off regulation and sometimes exercising effective monopoly power in the process. This large sector is mandated by the state, extends the reach of government, but never appears in any public accounts.

We can make your life more difficult

Under the last federal government there was a return to an anti-business agenda, effected mainly through regulation. There was the usual, generalised demonising of certain forms of business activity such as mining and energy production, and caustic criticism of prominent successful Australian business figures. More insidiously has been the creeping intervention in industrial relations under the spurious cover of the alleged negative effects of previous legislation.

Aided and abetted by a union movement with an apparent death wish, the powers for official and union disruption of business activity were extended. Not surprisingly, this has not ushered in the promised era of industrial peace but rather an increase in workplace disputes and stoppages. The antediluvian notion that industrial warfare is the natural state of affairs dies hard. On the other side of the equation, the government applies our taxes (that is, our income) to prop up ailing manufacturers rendered uncompetitive at least partly by the unrealistic demands of their labour forces.

One means for allegedly softening the impact of regulation has been the use of “guidelines” rather than black-letter law. Unfortunately many of these guidelines seem to be applied more for the extension of state supervision than for the easing of existing regulation. Moreover, they are often not what they seem. A guideline that is “voluntary” but involves the denial of a licence if not complied with is simply regulation by artifice.

But we are making official life easier

While making our lives more difficult, governments do not always apply the same strictures to themselves. An example is our old friend National Parks, where the noxious weeds flourish, hazard reduction burning is inadequate and feral animals roam unmolested. They also have exemption from vegetation clearing legislation (see below). The equality of the Crown before the law involved a long historical struggle, starting in 1100 AD with the Charter of Liberties of Henry I. We are now going backwards in time.

And we will be your nanny

We discovered on building a new house that there is a regulation that prescribes that the temperature of water from the tap cannot exceed 50 degrees. This mystified me, as 65 degrees is not very hot and is much better for washing dishes and clothes. But we are still allowed to heat a kettle or pan to 100 degrees if we wish. I can see the motive—to protect children from climbing on a chair and turning on the hot tap (assuming the temperature limit is not there for dumb adults). Is this really the business of government or is it just another urge to supervise our private lives?

In a particular irony, the tips for “breaky in bed” (see above) included an injunction to the kids to cook breaky to “at least 60 degrees until ‘steaming hot’”.

I await future “domestic” press releases proscribing the use of large kitchen knives, opening doors too quickly and sticking your head down the toilet.

We can appropriate your property, and not on “just terms”

Section 51xxxi of the Constitution is one of the key clauses. It goes back to Magna Carta when the English barons, fed up with the arbitrary exercise of royal power, restricted the right of the Crown to help itself to the property of its subjects.

Bad King John was deprived of his extensive rights over the forest domain. Were he alive now he would be proud of the work of his New South Wales descendants. Crown rights over private forests were reasserted through the New South Wales Native Vegetation Act (most states have similar legislation). The already over-extended National Parks system was further extended by the simple expedient of turning large tracts of private land into quasi-parks. This was achieved by proscribing “clearing” of any native vegetation. Clearing was defined as any disturbance of any part of any native plant. This effectively put all native vegetation, including the huge private forest areas, under the control of the state. It rounded out an existing system in which most native fauna are already protected.

Permission to disturb any portion of this resource on private land now requires thirty different administrative steps. The National Parks and Wildlife Service is, of course, exempt from the clearing guidelines. The ghost of King John would rejoice at this reassertion of special Crown privilege.

Recently another angle of this came to notice. In successive weeks we were first presented an Unregulated River Invoice for “water management services”—although I have yet to detect any services other than the sending out of invoices—then hot on its heels came an invoice for water supply use under the Water Management Act. We will shortly receive a bill for our minor, highly restricted irrigation licence.

Now, unless the government is taking possession of the rain before it hits the ground, what falls from the sky is free. My property supplies all its own water needs and contributes many multiples of that usage to the small river running along our boundary and hence to the lower Manning catchment. Instead of being compensated for contributing this “environmental flow” I am being billed for non-existent services. I await an invoice from the “Office of Atmosphere” for the air I breathe, with a partial credit for exhalation.

In its task the New South Wales Office of Water is ably assisted by numerous Catchment Management Authorities and Rural Lands Protection Boards.

nanny banned

We can set up impossible hoops

The government may respond to criticism of its native vegetation rules that it does permit private native forestry subject to several administrative hoops. But woe betide if you have native animals on your land—and koalas and possums are surprisingly numerous in the countryside when it comes to extending quarantine of land.

In this case, you must not touch “feed trees” where koalas are in residence. There is more. You must not touch “candidate trees” which may later be selected (elected?) by animals as feed trees.

So, get out the long ladder at night when the animals are awake. Make sure you do a proper round of vertical and horizontal consultations as to the medium-to-long-term dining intentions of all local koalas and possums.

We can make laws that don’t work and can’t be administered

The reach and burden of law have now become so extended as to be not just superfluous but unadministrable in many areas. The growth in the so-called “black” economy is one symptom of this. There are just not enough officials to ensure that the hundreds of thousands of pages of law are observed by the millions of citizens.

How can a whole river catchment of thousands of square kilometres be “managed” by a small team of officials? How likely is it that a landholder will “fail” to notice the existence on his property of one of the myriad of endangered species when notification may quarantine part of his principal asset, land? How can hundreds of thousands of small food outlets be inspected by yet another small team? This inevitably leads to selective policing and the unpleasant and lazy practice of “naming and shaming” well-known eating establishments for trivial offences in order to spread the message; easier than pursuing and nailing serious offenders.

From another point of view, can the public know the extent of their freedom if they do not know the extent of the law? The New South Wales food regulation is over 100 pages. Each state and territory has its own version. Pity the business operating across state lines. The Native Vegetation Conservation Act, one of a battery of environmental laws, is forty-one pages long. Each state will have its own equivalent. Every farmer needs to know its application. The tax laws and rulings are several thousand pages. We have a duty to know the obligations they impose.

But we are good at signs

The prevalence of signs recognises the impossibility of comprehending our laws and the need to tell us what to do in very large letters.

I am intrigued by road signs telling me “You are doing $250” when I and everyone else in sight is travelling within the speed limit. I am amused by the constant injunctions to pay proper attention to driving in traffic when I have to keep my eye on the forest of signposted prohibitions, exhortations, demands, threats and penalties.

I feel sympathy for the pub licensee whose bar is festooned with anti-drinking signs, numerous to the point of superfluity. She must vigilantly police (at her own expense and risk) the age of patrons and their propensity to drink too much.

As a one-time casino employee I stood bemused in front of the problem-gambling warning panel in a dozen languages at our main entrance. It might have been expressly designed to discourage patrons from reading it. They didn’t.

We can shame your use of legal products

Tobacco is the obvious candidate. I should declare an interest as a lifetime non-smoker. Does anyone really think that plain packaging disguises what is in the packet? We all know there are cigarettes in there. Does prohibiting smoking in the open air achieve anything? Does anyone really believe the public is ignorant of the health risks?

Without the guts to ban the substance the authorities seek to shame the users. Next there will be plain labelling for Penfold’s Grange, Bundaberg rum and Coca Cola with a picture of a swollen liver and a warning that “alcohol/sugar kills”. I also await the regulation to force McDonald’s into small grey buildings with no signage, security on the single (pedestrian) entry, hamburgers served from behind an opaque screen and a warning stamp on each bun.

I await the ultimate government-sponsored sign to be regularly placed on roadsides and screened on television, reading simply, in giant letters:

YOU CANNOT BE TRUSTED!

This will induce a sense of more generalised guilt in the population, making them more amen­able to direction.

Your home is not your castle

The association of regulatory obligations with regulatory powers is universal. Enforcement depends upon this and is justified in many cases.

But there are unpleasant aspects, some of which we became aware of in our small rural enterprise when studying the inspectorial powers of the three levels of Australian government. We found that numerous persons had the power to march into our property, get access to our business activities and records, and do so without notice. Generally, but not universally, the inspectors are polite and not aggressive, but it is clear that their right of entry has precedence over your right to privacy. We are all subject to the laws of trespass, but not the state.

These powers of intervention can also be conferred by government on private individuals, as a recent report on compulsory medication of children made clear.

We can deny your right to work

The Australian Tax Office has the duty to issue Australian Business Numbers. Without an ABN one cannot be in business. No doubt that helps the ATO in the administration of various tax laws, including GST. But with the duty goes the power—the power to refuse an ABN, which is the power to refuse permission to an individual to engage independently in a trade or a business of his or her choice.

I am sure that it was not the intention of the framers of the legislation that this power be used extensively. After all, we want to encourage, do we not, the creation of new enterprises? In this way we nurture the independent and innovative propensities upon which Australian society has been built.

But somehow the refusals have become numerous, in particular for the subcontracting business. This, of course, has nothing to do with a political agenda to force people into the wage system and swell the dwindling ranks of union members.

How does this happen?

In a Senate hearing I attended some years ago I heard the words that for me crystallised the problem. Industry representatives were expressing a concern that a proposed superannuation regulation was unnecessary and complex. It was one of those “belt and braces” regulations that seem to arise from the application of a universal precautionary principle. The costs would be borne by all superannuants.

The response from a (Liberal) senator was, “I don’t find it complex.” In fact, almost all ordinary citizens would have found the provision complex. Moreover, the senator may have comprehended the words but was not interested in the complexity of implementation.

The passage illustrated the inertia of the regulation process. Someone has a bright idea, the Treasury is instructed to draft a regulation, the industry is “consulted”, the Senate committee has a press of other business (more draft legislation?) and does not want to amend, much less cancel, the draft. They are safe in the knowledge that they will not have to apply the law personally, and indeed will never see it again.

And, after all, what is the business of politicians if it is not the brisk passing of new laws? Parliamentary “busywork” creates more media releases, more employment for official jobsworths, but more effort and expense for everyone else.

It is said that the condition of liberty is eternal vigilance. Without it servitude is the result. The very complexity of the modern state makes individual protest at any extension of state power difficult to the point of impossible.

We are in what might be described as a state of not-so-mild servitude. Australian business in particular is like Gulliver, pegged to the ground by countless tiny threads tied by a host of fearful Lilliputian politicians and officials.

It is tempting to qualify this message by pointing to the numerous needs for state intervention in a complex modern society. The risk now is in the other direction. We have vast, oppressive and unstoppable state machinery whose ethos is the detailed direction of social behaviour and ultimately of thought itself.

Why does it matter?

This has been a somewhat lengthy, though far from complete, litany of the pervasiveness of the state in our lives. It is the lifting of a small corner of the suffocating fog of regulation. And there is no lack of new causes advocated by one or another po-faced individual letting us know what is “inappropriate” in our social and economic behaviour requiring immediate rectification. This attitude is fed by a culture of complaint and victimhood where the absence of major national problems gives us room to agonise endlessly about second-order issues. We bring much of it on ourselves.

The oldest known treatise on government, the Tao Te Ching, stated 2500 years ago, “The more taboos there are in the state, the poorer the people.”  We no longer have effective means of giving force to this ancient but still valid principle. The result is not only a series of existing evils but also scant possibility of restraining their continuous augmentation.

Why does this matter? It involves:

• Appropriation of our income

• Appropriation of our wealth

• Appropriation of our time

• Appropriation of our choices

• Appropriation of our esprit

How “appropriate” is all that?

It would be useful to devise some National Accounts measure of the total cost of government interference in our lives: perhaps “Gross National Deadweight” or “Gross Hidden Impositions”. It could be incorporated as an offset in currently fashionable measures of Gross National Happiness.

Work and enterprise are two of the most satisfying of human activities, as well as being the means of securing our children’s future. Over-regulation makes those activities much less satisfying. We are in the wrong place when the taboos that surround work are more important than work itself.

What next?

In all mature institutions, including governments, there are accumulated rules, traditions and conventional wisdom. The challenge is not only to eliminate the most egregious impositions on the populace but also to reduce the overall burden. History tells us that states that do not renew in this way inevitably decline into atrophy and are subsumed in or dominated by more vigorous, less constrained entities—such as Greece several times in its history.

In the end it is not just an economic or social welfare question. It is the systematic appropriation of the individual freedom and stifling of the vitality of our society, to which the regulator is frequently indifferent or hostile.

Resistance will require a sustained, organised campaign. The relentless grind of deregulation is not suited to the twenty-four-hour news cycle. Previous attempts at deregulation have always been negated by the incoming tide of new laws.

The answer lies in breaking the nexus between widespread disparate demands for government intervention and the automatic political response. If this sounds like a psychological shift at all levels, it is. In a sense it involves a mature take on what sort of future we see for our country. Is it a bankrupt, atrophied European version, perhaps descending into deeper corruption? Or do we choose a more vital, free and fruitful Australian model we develop ourselves? Maybe then some of the resources we waste on deadweight activities could be diverted back to those who create that future.

It could provide the sort of paradigm shift for a truly reformist political campaign.

James Hoggett has been an economic adviser to the Treasury and to the Business Council of Australia, and a senior fellow with the Institute of Public Affairs, as well as a farmer.

 

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