Saxon Davidson: WA has the most to lose through mega-costly climate trigger

The duplication of regulation imposed by State and Federal governments is a significant factor behind the record level of red tape currently imposed on businesses across the nation.

The important work to remove duplicate laws, as the WA Government has announced it will do regarding burdensome emissions regulation, is the right approach, in principle, towards cutting the excessive red tape the State’s industry faces.

However, it must be asked whether abdicating its regulatory responsibilities to the Federal Government in Canberra is really a good deal for the State the nation relies on as its economic powerhouse.

The policy agenda of the current Federal Government has hardly been friendly to the West. It has largely been aimed at satisfying the demands of the political class and inner-city elites of the Eastern States.

Federal regulatory frameworks such as the safeguard mechanism as amended by the Albanese Government, which State Environment Minister Reece Whitby now views as the most appropriate method to regulate emissions, disproportionately targets WA businesses.

Institute of Public Affairs’ analysis of the safeguard mechanism found it burdens the West the most, impacting more businesses than any other State or Territory.

The same goes for the Federal Government’s marquee Nature Positive plan which, if implemented in its totality, would see 30 per cent of Australia’s land and sea area locked up from development. Undoubtedly, this would be concentrated in regional and remote Australia, impacting the very land that delivers the prosperity WA, and the nation, vitally needs.

When it comes to regulatory duplication, it is impossible to ignore the fact that the Federal Government is the cause of it all. The Federal Government is currently attempting to dramatically expand the environmental bureaucracy through the creation of a redundant federal environment protection agency. Today, every State, except Queensland, already operates a State-based equivalent.

IPA analysis of the expense and scope of state-based EPAs estimates a duplicate Federal body will cost taxpayers $1.8 billion per year and will employ approximately 4760 bureaucrats. These Canberra-based bureaucrats will have the power to apply environmental regulations on top the States’ EPAs, as well as having approval powers over vital nation-building resource projects.

With a Federal election looming and the Government’s political fortunes apparently slipping, the push to further regulate WA industry may grow even stronger. And this will be particularly pronounced should the Albanese Government have to rely on the Greens and teals to form a minority government.

A Labor-Greens alliance would likely result in the inclusion in Federal legislation of a climate trigger, requiring any project to be subject to a Federal EPBC Act approval process should it average a prescribed level of annual carbon emissions. This will be the death knell for numerous projects in the pipeline, projects vital for economic growth and the creation of well-paying jobs.

Previous IPA research found introducing a climate trigger would potentially prevent $227 billion of investment in the Australian economy, with over $111 billion of that investment being cancelled in WA alone.

WA has the most to lose under a Canberra-based, one-size-fits-all approach to environmental regulation; particularly as these Federal regulations will unfairly target the agriculture and resource sectors.

The WA Government should be calling for the Federal Government to decentralise its environmental regulatory framework, so each State can operate in a manner that works best for them, with the support of the local community.

The ever growing red and green tape burden imposed by an east coast-centric Federal Government will leave the West behind. It is the Canberra bureaucrats who need to be removed from the West’s regulatory framework, not the people who know how best to run their State.

Saxon Davidson is a research fellow at the Institute of Public Affairs