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Abbott piles red tape on bonfire

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Labor's financial reforms are not the only regulations in danger.

Illustration: David Rowe.

Illustration: David Rowe.

To borrow from Tony Abbott's collection of tortuously mixed metaphors, the government will soon light a veritable bonfire of red tape in Parliament, throwing more than 9500 regulations and 1000 acts of Parliament onto the hungry flames.

It sounds exciting, doesn't it?

''We're working for you today, by creating the biggest bonfire of regulations in our country's history,'' Abbott declared last week.

Greens leader Christine Milne got into the act too, accusing Abbott of trying to ''burn up important protections'' and hiding his ''true agenda in the smoke''.

Actually, the bonfire metaphor is a pretty exciting description of a faintly boring process, at least as far as repealing the regulations goes. They will be quietly written off next week, without the need for parliamentary oversight, or the need for a Big Red Tape Bonfire.

But that would take all the fun out of it.

This Wednesday will be Repeal Day, when the government will put its legislation to scrap more than 10,500 ''unnecessary or counterproductive pieces of legislation and regulations'' to a formal vote.

Presumably, as businesses shake off the shackles of over-regulation, small business owners also will run to the streets to dance and French kiss strangers, and the liberating sounds of Joe Cocker's Unchain My Heart will soar across the country.

We're told abolishing the unnecessary, counterproductive and redundant laws and regulations will save individuals and organisations more than $700 million every year, and ''make people's lives easier, not harder''.

And some of the regulations that are being repealed are well and truly past their use-by date. My personal favourite is the slightly baffling but endearing Seamen's Compensation Act amendment, which dates back to 1947 and reads: ''Where a seaman habitually uses his left hand and arm to perform work usually performed by seamen with the right hand and arm, the compensation payable to the seaman under this section shall be for the loss of his left arm or any part of his left arm the amount which would have been payable to a seaman for a similar loss in respect of his right arm or the corresponding part of his right arm.''

But who knows what else will disappear in the bonfire? Cynics, myself among them, suspect there will be many regulatory changes hidden in the theatrical bonfire, which only reveal themselves in the weeks and months to come.

Labor, the Greens and news organisations have staff poring over the regulations to be scrapped, but it's likely they'll miss much of it. The government gave them, and the public, less than a week's notice of the 10,500 items it plans to scrap. If you were so inclined, and you managed to read one piece of legislation every minute without slowing or sleeping a wink, it would still take you seven days just to read them all.

But we already know about one of the big ''red tape'' items to go: Labor's financial planning rules.

On December 20, when no one was paying particular attention, then assistant treasurer Arthur Sinodinos announced the government would wind back Labor's reforms that strengthened consumer protections against financial planners. Sinodinos said they ''went too far, creating unnecessary complexity, imposing significant burdens on industry and reducing the availability and increasing the cost of advice to consumers''.

So he introduced draft regulatory changes to remove the requirement for financial planners to act in the ''best interests'' of their clients, and to again allow ''conflicted remuneration'' in some circumstances.

Sinodinos - who held a senior role at the National Australia Bank before taking a Senate vacancy in November 2011 - managed to introduce changes that are unpopular with almost everyone but the big banks.

And they are remarkably unpopular. Financial Planning Association chairman Matthew Rowe, who represents 7500 practising financial planners, argued last week that ''commissions linked to the sale of an investment or superannuation product provides for a conflict of interest that cannot be managed [and] so must be avoided''.

He went on: ''We do not believe this proposed change is in the public interest.''

The changes are also opposed by the industry super sector and consumer groups. Labor has vowed to fight them ''all the way''.

Earlier that week, the Independent Commission Against Corruption had been told Sinodinos stood to make millions from a company linked to Eddie Obeid, and had been paid ''$200,000 for 100 hours' work a year'' at Australian Water Holdings, which took him on as a board member in 2008 and later chairman to ''open doors'' to Liberal politicians.

As it happened, Sinodinos' changes were formally introduced to Parliament on Wednesday, the same day newspapers across the country called for him to stand down from the frontbench.

It was terrible timing, and a bad look for a man with ministerial responsibility for corporate law matters. Hours later he stepped down.

Labor's treasury spokesman Chris Bowen said the government should just abandon its financial planning regulations, which he claimed had been botched by Sinodinos ''sneaking it through by regulation in an attempt to avoid parliamentary scrutiny''.

The question now will turn to what else will be hidden in the bonfire.

Bianca Hall is political correspondent for The Sunday Age.

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