I would like to welcome you today on my own behalf and on behalf of my colleagues, the Tanaiste and the Minister for Public Enterprise to the launch of a major report by the OECD on Regulatory Reform in Ireland.
I would like to also welcome, in particular, Ms. Sally Shelton-Colby, Deputy Secretary General of the OECD; Mr. Scott Jacobs, former Head of the Regulatory Reform Programme in the OECD and the Lead Drafter of the Report on Ireland.
My government colleagues and I had an opportunity to discuss this Report with the OECD representatives earlier this morning. I thanked them for the care and effort their team put into producing such high calibre work. The Government welcomes the report as a valuable assessment of Irelands achievements and continuing progress in relation to regulatory reform.
Reasons for Regulatory Reform
I would like to begin by setting out the reasons why the Government wants to promote regulatory reform. Our commitment to Better Regulation stems from the recognition that if State regulation is excessive in quantity, or is of poor quality, it will be an unnecessary burden on economic and social activity. The OECDs report is a useful reminder of the extent to which regulation permeates all aspects of our lives.
For example, economic regulations affect pricing, competition, the protection of consumer interests and the freedom to enter and exit economic markets.
Social regulationsprotect the public interest, covering such crucial areas as health, safety, food, the environment and social inclusion.
Administrative regulations are those imposed by government in relation to gathering information or administering schemes - the infamous red tape which is commonly associated with the worst aspects of bureaucracies.
In reality, of course, regulations impact on society in many different ways. This makes the task of regulatory reform more complex and it highlights the need for an integrated approach across all Government Departments and public bodies.
While reforms should be undertaken to lighten the burden of regulation, we approach regulatory reform on a pragmatic basis not from an ideological viewpoint of de-regulation for its own sake. As I see it, there are two motivations for undertaking regulatory reform. Both of these offer compelling pragmatic reasons for tackling the quantity and quality of our regulation:
Firstly, regulatory reform offers us a way of sustaining our strong economic performance into the future in a non-inflationary way; and
Secondly, regulatory reform supports the objectives of our public service modernisation programme which is about Delivering Better Government.
Economic Context
Economic growth on the scale and at such a dramatic pace as we have experienced in Ireland brings its own problems. We are facing a different set of challenges to those which we faced in the recovery years. The new economic challenges are related to capacity, infrastructure and ongoing competitiveness.
A key challenge is to ensure that the economy is managed in a way which minimises our exposure to shocks and which maximises our ability to recover from them. Regulatory reform is a policy tool which can help us to meet these challenges; and
By freeing up markets, we can unleash potential in the economy which is not being realised at present;
By minimising regulatory barriers, we can make it easier for entrepreneurs to avail of business opportunities;
By promoting greater competition, we can achieve greater efficiency and more choice for consumers; and
By making Ireland an easier place to do business we can boost trade and foreign investment.
Better Government context
The second motivation underlying regulatory reform is Public Service Modernisation. In essence, the modernisation programme is about sustaining our competitiveness through more effective use of resources, while also delivering excellent service to the public. The OECDs Report will provide a further opportunity to make progress on implementing change in the Public Service.
Of course progress has been made already in some of these areas, for example:
On accessibility, the statute book is available in electronic format and Departments /Offices are increasingly using web-based technologies to publish regulations, application forms and explanatory information.
On quality versus quantity, Departments/ Offices are required under amended Cabinet Procedures to use a quality regulation checklist for each new legislative proposal.
On elimination of unnecessary regulation, Departments and Offices have been asked to examine their primary and secondary legislation to identify scope for Revision, Repeal and Consolidation.
In other areas, the work of the Competition Authority and the Competition and Mergers Review Group has made a major contribution to the development of competition policy in Ireland. Similarly, the establishment of Sectoral Regulators - notably in the Transport, Energy and Communications sectors - has helped to define more clearly the role of the State as steering, not rowing, in certain key economic areas.
This is good progress but it is only a start. The OECD report provides added impetus to renew our efforts in this area. For example, we must now make progress on the question of measuring the impact on society of new regulations as they are being developed. To achieve this, a new system of Regulatory Impact Analysis is needed. With a system of Impact Analysis, Government Departments and other Agencies would be required to analyse and measure the impacts on society of regulations in real time, that is, as policies are being crafted. The need for a system of Impact Analysis will be addressed as part of our programme of action in response to the Report.
Value of Social Partnership/ Consultation
The OECD report notes that the stability of our social and economic policies has been a key factor in ensuring Irelands success in recent years. Such stability has been achieved through the involvement of the social partners at all levels. The OECD Report also records the high value that we have traditionally placed on the role of consultation in public policy. The Government will continue to seek ways of strengthening the dialogue between government and wider civil society, especially consumers.
Consultation improves the transparency and legitimacy of decisions; and consequently encourages greater compliance; and the Report provides a welcome reminder of the importance of ensuring that consumer interests are given adequate voice.
Main messages in the OECD report
Before dealing with implementation issues, I wish to summarise the main messages which the Government takes from the OECDs report:
Firstly, Ireland has made a good start in implementing a programme of regulatory reform. There are further inroads to be made in certain sectors where more flexible and innovative regulatory measures (and alternatives to regulation) can now be employed, particularly through market mechanisms and the strengthening of competition policy.
Secondly, despite the very positive gains made in the openness of markets, we need to address remaining imbalances in policies which tend to prioritise producer over consumer interests.
Thirdly, we need to accelerate the institutional and procedural changes which we are making to ensure that we create a regulatory regime of the very highest quality and one which employs an appropriate model of regulatory impact assessment.
Fourthly,the pace set by the liberalisation of some sectors, for example, the telecommunications sector, will help Ireland to achieve its ambitions as a global communications hub. It also helps set the pace for reform in other sectors, for example in Energy and Transport.
Implementation
Turning now to implementation, I would like to outline in broad terms the main points of the Action Programme that I expect will form the basis of the Governments response to the OECDs Report:
In terms of the regulation of specific markets:
The Competition Authority will be asked by the Tanaiste under existing legislation to undertake studies of particular areas of economic activity. The Tanaiste and I are agreed on the value of this mechanism and I know that she has some specific areas of study in mind, for instance, in relation to professional services.
Acceleration of a Review of the Health (Community Pharmacy Contractor Agreement) Regulations governing the award of General Medical Scheme contracts to pharmacies;
Requesting the Commission on Liquor Licensing to produce additional interim reports on issues which can be progressed in advance of the Commissions final report due in 2002.
In terms of improving our capacity to produce high quality regulation:
A major national policy statement will be prepared on Regulatory Reform, with input from appropriate Departments and Agencies on key issues.
As I have already mentioned, a robust system of Regulatory Impact Analysis is a key recommendation of the OECDs Report. Such a system will be commissioned and implemented in the Public Service. Government Departments and other Agencies will be required to analyse and measure the impacts on society of regulations being proposed. This is a challenging goal and it will involve a major upgrading of the skills of Public Servants in the area of policy formulation. The Department of Finance, which has responsibility for the training and development of Civil Servants, will have a lead role in ensuring that the organisational capacity is put in place to ensure successful implementation of Regulatory Impact Analysis.
In terms of institutional responses to the OECDs report:
My Department will continue to coordinate the regulatory reform agenda and monitor its implementation as part of the overall process of Public Service Modernisation in which we have been engaged over the last number of years. However, better regulation is an issue which cuts across the full range of government activities. I believe that it will be important for all Departments and Offices to continue to take the lead responsibility for actions in their specific functional areas.
To ensure greater coherence in regulatory management, a new High Level Group on Regulation will be established under my aegis, with representation from Government Departments and Agencies to give a unique cross-sectoral focus on regulatory quality. Key regulatory authorities will also be invited to contribute to the group, as will the Competition Authority. To ensure that consumer voice is given adequate expression, representation will also be invited from the Office of the Director of Consumer Affairs. The Groups broad remit will be to oversee implementation of the response to the OECDs report and to advise the Government.
The Joint Oireachtas Committee on the Strategic Management Initiative will be invited to consider the OECD report and to examine plans for its implementation, not only from the important aspect of improving services to customers but also to consider how Regulatory Impact Analysis and other measures being proposed can enhance the effectiveness of Parliament.
These are some of the key elements of the full, integrated Action Programme which I hope the Government will formally endorse tomorrow when the OECDs report is formally tabled at Cabinet.
Conclusion
Benchmarking is a term which is used in many different contexts. The OECDs Report on Regulatory Reform in Ireland is a good example of benchmarking in action. It involves an assessment of each reviewed countrys goals and achievements, using standard approaches and common yardsticks. As such, the Report indicates that we have made a good start. While we take satisfaction from the many positive aspects of the Report, its real value is that it highlights areas where further progress must be made.
I look forward to the contribution which this Report can make towards energising the domestic debate on regulatory reform.
I am convinced of the potential of regulatory reform to secure the progress we have made over the past decade in economic and social terms. Equally, I am convinced that now is the time to take action.
Once again, I thank all those involved in producing a highly impressive and important document.