Government deregulation to save $430m in annual compliance costs and more detail around net zero target for 2050

The two main points being the slashing (not cutting) of red tape and further detail on how Australia will achieve net zero emissions by 2050.

Interestingly, the Prime Minister also touched on “more to come” to support Australia’s transition to a digital economy, including initiatives to drive digital skills with the National Skills Commission identifying digital jobs in the top 25 emerging occupations.

Good bye red tape

There were some exciting murmuring around tax reform at the height of COVID restrictions last year. However, when it became clear that the economy wasn’t in as much pain as anticipated, those murmurings dropped to a whisper, and then stopped altogether. Thankfully deregulation, a pillar of Scott Morrison’s last election campaign, is still very much on the agenda and could be a real enabler to help the economy recover.

Twelve measures, costing $120 million, will save business, charities and individuals about $430 million in compliance costs annually.

A nice dovetail to the Government’s push to bring more businesses online is the greater investment in enabling businesses to digitally deal with Treasury and regulators.

This will also benefit the health sector. By streamlining digital pathways, the regulatory burden on around 400 companies that currently lodge 2,000 applications annually in the pharmaceutical, medical technology services and medical software industries will be reduced.

Reporting will be streamlined for the National Greenhouse and Energy Reporting Scheme which is anticipated to cut the time taken to produce the reports by up to 70 per cent.

The Government is also committing to the provision of additional assistance to small businesses with RegTech solutions to help them comply with modern awards, cutting costs and improving compliance.

Private sector and technology key to achieving emissions targets

The net zero emissions target by 2050 was announced last year in September as part of “Energy Week” – but without the detail around how those reductions will be achieved.

The timeliness of the recent detail is ideal. The Clean Energy and Recycling MMI roadmap outlining how industry can reduce their emissions has only recently been released and the Prime Minister is participating in a virtual greenhouse summit hosted by US President Joe Biden this week.

Off the agenda (at least at the moment) is an emissions related or “carbon” tax. Instead, the onus is on a transformation of our energy mix over the next 30 years and the commercialisation of low emissions technology.

Private companies – particularly from the six priority sectors under the MMI – are encouraged to invest in this space. Fortescue Metals Group is investigating in green hydrogen. BHP is investing in carbon capture and storage, as well as introducing emission-free surface mining vehicles. AGL and Idemitsu Australia Resources have an early study to transform a former coal mine in the upper Hunter into a pumped hydro storage facility. The Government’s message: more of this, please. This certainly aligns with the broader ethos behind the modern manufacturing initiative.

Interestingly, the Prime Minister says we are already well on track to meet zero emissions by 2050. However, as we know, legacy systems and industries take time to pivot – particularly when you’re taking a carrot rather than a stick approach to change. Does this hint at the possibility for yet further grants, deductions and support to get these sorts of projects developed and commercialised? We certainly hope so.