The federal government’s aim to ditch $700 million of regulation to lift a massive burden off business has come as new data points to sub-trend economic growth, and only tentative signs of growing demand for new workers.
The government on Wednesday detailed 9500 pieces of unnecessary regulation and 1000 redundant acts of parliament for its first repeal day next week.
Treasurer Joe Hockey said the best way to help business was to lift this massive burden.
“The best way to help the economy is to free it up to give people the chance to get on with their lives without Canberra telling them how they should behave or what they should do,” Mr Hockey told parliament.
Business groups agreed.
The Australian Chamber of Commerce and Industry’s chief operating officer, John Osborn, said that at every level of government, regulation was suffocating business.
“The costs and time involved in complying with red tape is bad for productivity and hurts our competitiveness,” Mr Osborn said in a statement.
The Tax Institute said while this was a step in the right direction, a crucial aspect of deregulation was the need for wholesale tax reform.
“Tax reform is essential to reducing overlap and complexity and moving towards a simple, fair and efficient tax system,” the institute’s president Michael Flynn said in a statement.
The government should set the timetable for its promised tax reform white paper as soon as possible, he said.
Meanwhile, new figures indicate there has been a sharp loss of momentum in the economy since late 2013 that looks set to extend into at least the middle of 2014.
The Westpac-Melbourne Institute leading index for February, which indicates the likely pace of economic growth three to nine months into the future, recorded its first sub-trend reading since December 2012.
Westpac senior economist Matthew Hassan said this was in line with the bank’s forecast for 2.7 per cent growth in 2014 and below the trend of about 3.25 per cent.
Westpac this week ditched its expectation for two interest rate cuts by the Reserve Bank this year as the central bank continues to show a “considerable comfort” in holding policy stable.
“We still see a number of headwinds for employment, the consumer, business investment and confidence restraining the pace of recovery,” Mr Hassan said.
New government data showed job advertisements posted on the internet fell by a seasonally adjusted 3.3 per cent in February.
Economists at ANZ Bank were encouraged that this was only a partial retracement of the steep 7.6 per cent rise in January, and were modestly higher in trend terms.
Alongside other measures of demand for labour, they believe this is consistent with the unemployment rate stabilising around its present decade-high of six per cent.