Ahead of the Federal Budget, nearly 30 industry groups are calling for the government to slash regulatory costs by 25 per cent by 2030, warning excessive red tape is chewing up time, money and productivity for Australian businesses already under pressure.

The Alliance of Industry Associations, which includes groups representing small business, farmers, retailers, banks, universities, builders and investors, says overlapping rules across federal, state and local governments are creating unnecessary costs and slowing down growth.

The alliance is calling for governments to keep protections ifor consumers and workers in place, but to stop making businesses deal with layers of duplicated rules.

$160 billion lost to compliance costs

The Alliance says regulatory compliance is costing the Australian economy about $160 billion a year, or close to 6 per cent of GDP. That’s a hefty figure by any measure. The group says it is more than the Federal Government spends on Medicare and school education combined.

The Alliance warns that the costs don’t sit in a vacuum. They flow through to supply chains, into project delays, higher admin bills, slower investment decisions and, eventually, higher prices for households. For small and micro business owners, the burden is particularly heavy, as they lack the support needed to address the issue.

Small business owners caught in a regulatory trap

Skye Cappuccio, chief executive of the Council of Small Business Organisations Australia, said many business owners are losing hours each week to paperwork.

“For small businesses, red tape often means hours each week spent navigating compliance complexity instead of running their business,” Cappuccio said.

“That’s time taken away from customers, staff and growth. Reducing duplication would ease costs and support stronger productivity growth across the economy.”

Hospitality and tradies hard hit

The Business Council of Australia Chief Executive, Bran Black, said the current system was a mess of duplicate regulations and unnecessary approvals.

“In Victoria, a café owner needs 37 separate licences and approvals before they can pour the first coffee, while a tradie on the Gold Coast needs to pay hundreds of dollars in permits just to fix a tap over the NSW border.

“That kind of red tape adds cost, slows things down and makes it harder to keep goods moving and shelves stocked. With global volatility already pushing up prices, cutting that duplication would help bring down costs for Australian households and businesses.”

Businesses aren’t the only winners if the government were to reduce red tape. Insurance Council of Australia, CEO Andrew Hall said reducing regulatory red tape is one of the most direct levers available to ease cost of living pressures..

“For the insurance industry alone, that burden costs $3.5 billion every year – a 25 per cent reduction would deliver real relief for consumers right across the country,” Hall said.

Housing, farming and retail sectors call for support

The construction industry says the regulatory load has grown sharply over the past thirty years. Denita Wawn said Volume Two of the National Construction Code had expanded from 93 pages in 1993 to 889 pages today.

She also pointed to Productivity Commission estimates suggesting regulatory costs can add up to $320,000 to a new home. All at a time when housing affordability is already one of the biggest economic headaches in the country.

The farming sector also backed the push to slash red tape. National Farmers’ Federation, CEO Mike Guerin said farmers need to spend less time in the office and more time in the paddock, especially amid global uncertainty.

Australian Retail Council CEO Chris Rodwell warned that recent Mandala modelling shows regulatory fragmentation will wipe $26 billion from national GDP over the next decade, while adding more than $9 billion to the cost of living.

He wants retailers to be freed from these excessive red tape burdens.

“Retailers operating nationally are forced into duplicative compliance, fragmented logistics and inconsistent supply chains, when that capital should be driving productivity, investment and lower prices,” Rodwell said.

What the Alliance wants changed

The Alliance wants state, local and federal governments to commit to a 25 per cent reduction in regulatory burden by 2030. It is also calling for an economy-wide stocktake of existing rules, better coordination between jurisdictions and quicker action to remove duplication and inconsistencies.

The Alliance suggests this doesn’t mean tearing up protections or lowering regulatory standards. It says the focus should be on smarter systems, clearer rules and less overlap. The Alliance cites overseas success stories such as the UK and the European Union, which has adopted a 25 per cent red tape reduction target, rising to 35 per cent for small businesses. and hopes the same can be adopted in Australia.

You can read the Alliance’s full pre buget submission paper here

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