Opinion: Even more bureaucracy will kill economic growth

We need to build, build, build!

It sounds like something Donald Trump would say. This time however, it was State Treasurer Daniel Mookhey outlining his economic vision for NSW in a recent speech to the McKell Institute.

Decrying the time it takes to get things done in NSW, the Treasurer called for ‘regulatory experimentation to boost efficiency and innovation’ and attract capital investment.

It’s a very welcome sentiment. The first ‘experiment’ should be a real reduction in the bureaucratic red tape strangling the NSW economy.

There’s plenty the NSW Government can do to improve the way things are done here in NSW if it’s serious about attracting large scale private investment to stimulate the economy.

Unfortunately, the constant addition of new layers of bureaucracy, regulation and green tape continues to prevent our most important industries from delivering investment and jobs.

Right now, for example, there are proposals for nine new mines in regional NSW. These projects could attract a total of more than $2 billion in capital investment. They would also generate over 2,000 ongoing new jobs, more than double the 870 jobs the NSW Government says will be created by its recent approval of ten large renewables projects.

‘Economic growth’ is not a magic phrase that when repeated often enough suddenly materialises. It requires policies that support our strongest performing industries to grow, invest and create jobs.

A growing economy requires a streamlined bureaucratic framework at every level of government that facilitates the efficient assessment of projects, allowing industry to attract investment and deliver projects along with all the economic benefits they bring.

However, whether it be new mining projects or new renewables projects, all are currently assessed through a planning system which is becoming increasingly complicated by new government rules.

Here in NSW, proposals for most major developments already face complicated and unwieldy environmental assessment rules that discourage development.

For example, one element of the NSW planning system is the Biodiversity Offsets Scheme. This Scheme alone involves seven separate pieces of legislation totalling almost 1000 pages.

In addition, there are also around 50 related but separate Scheme guidelines consisting of over 2000 pages. There are also over 30 separate related websites or portals from which to draw information on how to navigate and comply with all the different rules and processes of the Scheme.

This is just one part of a state planning assessment process involving multiple departments and agencies, each with their own rules and guidelines.

Another big element of the assessment process is emissions. The NSW Government has its own emissions reduction policies, with different state-based timeframes, targets and pathways to achieving net zero commitment to the federal Government.

At the federal level, there is an emissions reduction target of net zero by 2050, and a 43 percent emissions reduction target by 2030, with a 2035 target expected to be set soon.

The NSW Government has a 50 percent target by 2030 and a 70 percent target by 2035 on its pathway to net zero, along with a different emissions accounting framework, with different rules.

Then there’s all the different departments and agencies involved, including state and federal departments of environment, climate change, energy and planning as well as the NSW Environmental Protection Authority, the NSW Net Zero Commission, and the federal Climate Change Authority.

Most new project proposals also face a wall of Canberra bureaucracy, and it’s set to get worse.

Prior to the last election the Albanese Labor Government’s proposed ‘Nature Positive’ legislation was set to bury our strongest economic performers like mining, transport, manufacturing and infrastructure under a mountain of new departmental rules and regulations.

The proposed reforms involved three new pieces of environmental legislation totalling almost 200 pages, plus multiple national standards and a raft of ‘to-be-released’ policy guidance material to support the new framework.

The reforms also proposed the creation of more Commonwealth bureaucracy including a new national Environment Protection Authority (EPA) and Environment Information Australia, an addition to the existing Commonwealth Environment Department.

With the re-election of the federal Labor Government, all this is on the table again.

While it’s unclear how much of this will be implemented, one thing is certain. Adding more regulatory burden on top of the already complicated NSW system will only make it harder to ‘build, build, build’ anything.

Stephen Galilee

CEO, NSW Minerals Council