The Victorian Government has argued that significant gains can be made through completing the competition reforms started in the 1990s and reducing regulatory burden. It also argued that the proposed new ‘human capital’ agenda offers the biggest economic potential and that additional reform opportunities should look at new reform initiatives linked to increasing the productive capacity of our people through health, education and training and work incentives. It has recognised the need to complete competition reform and also reduce the burden of regulation on our business. One line of argument pursued at COAG by supporters of the NRA has been that completing NCP and pursuing further regulation reform would allow Australia to drive further improvements to our already highly competitive and well functioning markets. While most NCP reforms have been substantially completed, there remains scope for further gains, including through further progress towards a fully integrated national electricity market, completing commitments to legislation review under NCP, improving infrastructure regulation and competitive neutral road and rail pricing.

Another significant opportunity for governments is to reduce the burden of red tape on our businesses. The ‘regulatory burden’ can be improved through addressing both the process (via gate-keeping arrangements) and outcomes (via targets that can be objectively verified). The Victorian Government has led by example in this area. In July 2006 it announced, in addition to COAG initiatives, that there would be no new regulatory burden with its introduction of an ‘offsetting simplification’ for new regulations — effectively the identification of a ‘one in, one out’ principle with regard to regulation. The Victorian Government also committed at that time to reducing the current burden by committing to a target of a 15% reduction in the cost of administrative burdens in three years and 25% in five years.

In 2006, progress was made at the national level on reducing the regulatory burden. The COAG Communiqué of February 2006 notes that COAG has agreed ‘to a range of measures to ensure best-practice regulation-making and review and to make ‘down payment’ on regulatory reduction by taking action now to reduce specific regulation ‘hotspots’ (COAG 2006).

Following the February 2006 decision, jurisdictions have been working together on a range of issues. This includes best practice regulation-making within jurisdictions through improved gate keeping processes and across jurisdictions through developing principles for determining when uniform, harmonised or jurisdiction-specific regulation is 'best’.

COAG also agreed to take action with regard to 10 'hotspots' at its February and July 2006 meetings, that is, priority areas where regulatory overlap is seen as impeding economic activity. The hotspots include: Occupational Health and Safety (OHS); Building Regulation; Rail Safety Regulation; Environmental Assessments & Approvals; and Business Registration Processes. The rationale was that if governments could make real progress in these areas, they could demonstrate the potential for further reform. Many of these areas, such as OHS, are affirmed as a priority focus by the publicly expressed views of business interests, notably the Business Council of Australia. Jurisdictions have also been working together on a framework for the annual review of existing regulation in each jurisdiction for the purposes of reducing the burden on business. The Victorian Government has demonstrated a commitment to this agenda with the establishment of a standalone gatekeeper in relation to regulation — the Victorian Competition and Efficiency Commission (VCEC) — and with its ‘Reducing the Regulatory Burden’ initiative that includes the ambitious targets for reducing the regulatory compliance burden of 15 % over 3 years and 25 % over the next five years (Department of Treasury and Finance (Victoria) 2006).