Insurers have warned that complying with regulatory requirements is increasingly taking up resources that could be used to improve business performance, including product innovation.
Robust regulation is important, but the process for reviews and inquiries is simply not conducive to effective or efficient policymaking, the Insurance Council of Australia (ICA) says in a submission to a government inquiry.
“While not underplaying the issues being addressed by these reviews and inquiries, our experience has been that many of these activities have not led to genuine improvements to the regulatory framework or good policymaking,” it told the Standing Committee on Economics’ inquiry into impediments to business investment.
“From our experience, issues are often picked up, inquired into and dropped once political attention fades.”
In some cases, multiple reviews on the same issues – such as the north’s exposure to natural disasters – have been held with no substantive outcomes achieved, ICA says.
“To the extent that these reviews and inquiries are partially or wholly duplicative and not genuine attempts to improve the regulatory framework, these costs represent wasted resources that could be invested in business processes and consumer initiatives.
“These costs are often not considered when assessing regulatory burden.”
Canberra should consider a “more deliberated approach” to establishing reviews and inquiries, to reduce the likelihood of repetition. This would provide for a longer-term focus and more strategic approach to policymaking.