Performance benchmarking of Australian business regulation: the role of local government as regulator

Financial system regulation Local government Urban planning Business Law Transport business regulation Government regulatory policy Australia
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Of most concern to business is the costs they face from local government planning and zoning assessment and building and construction regulation.


Key points

  • Implementing and enforcing state and territory laws, rather than local laws, dominates local governments’ regulatory workload.
  • While the Commonwealth has very limited powers to make laws for local government, it can influence them via national frameworks, such as food safety.
  • In addition to local laws and quasi-regulatory instruments, rules can be imposed on business by ‘decisions’ determined under other laws, such as occurs with permits (including development approvals), licences, leases or registrations. Although they can impose costs on business and/or be anti-competitive, local instruments do not face as much scrutiny as state, territory or Commonwealth regulation.
  • Burdens on business arise from delays, information requirements, restrictions on approvals, fees and penalties. Local governments can also prevent a business from operating or realising opportunities. Building, planning and land-use regulations impose the largest burdens on business.
  • Unnecessary business burdens will be lower when local governments regulate well. The most important gaps in the support from states to local governments are:
    • insufficient consideration of local governments’ capacity to administer and enforce regulation before a new regulatory role is delegated to them
    • limited guidance and training on how to administer and enforce regulations
    • no clear indication and ranking of state regulatory priorities.
  • Leading practices for the states and the Northern Territory, include:
    • guidance to local government in writing regulation, such as Victoria’s Guidelines for Local Laws
    • incentives for local governments to achieve scale and scope economies in regulatory functions
    • periodic assessment of the stock of local regulation and state regulation requiring a local government role
    • efficient cost recovery for local government regulatory functions
    • guidance to local government in the scrutiny of the impact of laws
    • graduated review and appeal systems for both local government decisions and processes
    • having regulatory decisions made by bodies which take account of all impacts
    • removing or managing the conflicting objectives between local governments’ regulatory and other functions
    • a comprehensive central register of the state laws for which local government has a role in administration, enforcement and/or referral.


Image: Laenulfean / flickr

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