Dental Industry Red Tape Index Hits Record High
21st Apr 16
The Australian Dental Industry Red Tape Index hit a record high of 65.9, a figure that indicates a moderate to high increase in the dental industry's compliance burden over the past quarter. The latest finding comes as business prepares for the second year of a revised Therapeutic Goods Administration (TGA) fee structure that increased regulatory compliance costs for the dental industry by around 34%.
Key Issues For The Dental Industry —
The Australian Dental Industry Red Tape Index is a measure of the regulatory compliance burden faced by manufacturers and suppliers of dental products. It is produced on a quarterly basis using data furnished by members of the Australian Dental Industry Association (ADIA), the peak business organisation representing manufacturers and suppliers of dental products.
The regulatory compliance burden, colloquially known as government red tape, faced by businesses in the Australian dental industry takes many forms; however, it is typified by unduly high government fees, excessive regulation and rigid conformity to formal rules by government that is redundant or bureaucratic and hinders or prevents action or decision-making on the part of both business and government itself.
FY2015-16 Third Quarter Reading —
65.9 Indicating A Moderate To High Increase In Red Tape
The most recent survey to produce the longitudinal study of the dental industry's red tape compliance burden covers the third quarter of FY2015-16.
It produces an index reading of 65.9 which indicates a moderate to high increase in red tape compared to the previous quarter.
Survey respondents indicated that this outcome is attributed to the continuing compliance costs associated with the Therapeutic Goods Administration (TGA) revised fees and charges that ironically came about by the regulator's botched attempt to reduce business regulatory compliance costs.
This reading is the highest since the survey commenced and indicates that the Australian Government has a long way to go in alleviating the red tape burden faced by business, hence the emphasis in the ADIA Advocacy Agenda.
Businesses were surveyed on the red tape burden on their business for the period covering January to March 2016 (inclusive) with the survey being completed over 4-20 May 2016 by 36% of the ADIA membership that manufacture and / or supply dental products.
The adverse impacts of red tape on businesses in the dental industry often manifest themselves in delays and costs associated with any delays in time to market, or changes to production processes; and development of products to meet Australian-only product design, performance and testing standards.
Businesses that manufacture and supply dental products are amongst the most regulated in the nation, largely due to the regulatory standards for the approval of dental products. Agencies responsible for creating red tape include the: Australian Taxation Office (ATO); Australian Securities and Investments Commission (ASIC); National Industrial Chemicals Notification and Assessment Scheme (NICNAS); and the TGA.
Understanding the index reading —
An index level of 50 indicates that there is an exact balance between those businesses who responded that the regulatory compliance burden is increasing and those who replied that the regulatory compliance burden had declined. Thus, a level below 50 can generally be interpreted as meaning the regulatory compliance burden is falling, and conversely, a reading above 50 indicates the regulatory compliance burden is increasing.
The Australian Dental Industry Red Tape Index helps form the context for ADIA’s policy advocacy which is directed towards securing a regulatory framework for dental products based on a risk management approach designed to ensure public health and safety, while at the same time freeing industry from an unnecessary regulatory burden.
As the ADIA membership supplies more than 95% of the products in Australian dentistry, the Australian Dental Industry Red Tape Index is viewed by government and industry stakeholders as an accurate barometer of the regulatory compliance burden faced by businesses in the medical technology sector.
Currency of Information —
This update was issued on 21 April 2016 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations.
The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here.
This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the ADIA logo, other images and where otherwise stated.
28th May 18
ADIA has advised a parliamentary enquiry reviewing impediments to business investment how the TGA’s proposed medical devices tax will make it harder for businesses in the dental industry to grow.
3rd Feb 18
A senate committee has recommended passage of legislation that will cut the the red tape associated with introducing new dental products to the Australian market. It's a legislative reform that ADIA has long argued for.