The Productivity Commission has issued a discussion draft of its report on the impacts of Council of Australian Governments (COAG) reforms in the areas of business regulation and vocational education and training.

 

The Commission found that increased effort from governments would be needed for the potential gains to be achieved in these two areas.

 

COAG has developed a wide-ranging agenda of national reforms. Reforms to raise productivity and workforce participation should improve the competitiveness of Australian industry, placing Australia in a better position to deal with population ageing and structural adjustment.

 

The Productivity Commission is required to report to COAG periodically on the economic impacts and benefits of COAG reforms. For its inaugural report, the Commission was asked to examine a number of the Seamless National Economy business regulation reforms and the VET reforms in the 'human capital' stream.

 

The Commission's preliminary finding is that the 17 business regulation reforms it examined could reduce business costs by around $4 billion per year, assuming full implementation. After a period of adjustment, national output (GDP) could increase by nearly one half of a per cent (around $6 billion per year) - benefiting business and consumers. The majority of these gains could accrue by 2020.

 

The Commission found that the VET reforms led to a rapid growth in student numbers in publicly-funded courses in 2010. Attainment of the COAG VET targets has the potential to raise GDP by about one per cent per year.

 

Commenting on the preliminary findings, Commissioner Patricia Scott said that while the study highlights gains potentially available, they are not assured, and increased efforts would be required in a number of areas.

 

“Given the early stage of implementation of most reforms, considerable uncertainty remains as to what benefits will be delivered, and when.”

 

 The Commission's report also identifies areas for improvement in both the regulation and VET reform areas.

 

The discussion draft has been released to encourage public discussion and to inform the Commission's final report. Submissions are due by 24 February 2012.

 

The report, Impacts of COAG Reforms: Business Regulation and VET, can be downloaded here.