I arrived in Melbourne on a cold Sunday morning eager to start my 6-week internship at the Institute of Public Affairs. Though by mid-day, it was 30 degrees. I soon got used to the temperamental Melbourne weather as it began to pour down with rain for the rest of the week.
My first day at the IPA involved an induction and meeting the team of dedicated researchers and staff. I was offered to carry out my own research on Donald Trump’s deregulation policies as part of IPA’s Red Tape series. As David Kemp points out “government rule-making is a blunt tool that can affect the functioning of the social order in profound ways”. Hence why holding governments accountable for their actions is at the heart of a functioning democracy. Over-regulation of the economy, on the other hand, can have severe consequences for economic growth through market distortions.
Following the Global Financial Crisis (GFC), the US government introduced the Dodd-Frank Act in order to regulate the financial market. This was a major piece of legislation known as one of the most restrictive financial regulation laws. Research has shown that not only is regulation not beneficial, but rather it has prolonged the economic recovery post-GFC.
Australia is still lagging behind the US in lifting the lid on regulation. As a small open economy, regulation has a significant impact on the prospects of the Australian economy. Thus, strengthening the Australian economy relies on reducing red tape. Research at the IPA has found the economic cost of red tape amounts to $176 billion per year in lost economic output. Australia ranks 77 out of 140 countries in terms of burden of regulation based on the World Economic Forum’s Global Competitiveness Index. Limited government in conjunction with fewer regulations is beneficial to business competition. According to the World Economic Forum, unnecessary regulation creates delays, raises transaction costs, reduces accountability and penalises small businesses. Thus creating a burden on the economy and reducing competitiveness in various industries.
I was quick to discover that a game of table tennis was serious business at the office with a belt dedicated to the champion. Perhaps the only office on Collins St. with a table tennis.
Preparations are underway for next week’s event, the IPA’s 75th Anniversary Gala Dinner attracting an impressive line of special guests. We will be celebrating 75 years of fighting for freedom.