Australia is yet to introduce comprehensive measures aimed at reducing the burden of federal regulation on business. This position is out of step with the progress made by peer economies.
$160bn cost of federal regulation
Australian organisations now spend $160 billion a year, around 5.8% of GDP, to comply with federal regulation alone. This is more than double the cost a decade ago, according to research commissioned by the AICD.
The AICD engaged economics consultancy Mandala Partners to assess the current scale and impact of federal regulation on Australian organisations, and the economy. The research found strong evidence that Australia’s regulatory system has become more detailed and complex over the past two decades, requiring urgent reform.
As a next step, the AICD has taken a closer look at Australia’s position compared against three other jurisdictions with comparable corporate and legal systems - New Zealand, the United Kingdom and Canada.
Our findings, summarised below, demonstrates that Australia is out of step with other jurisdictions which have introduced economy wide measures and/or targets aimed at reducing the regulatory burden on business. This policy debate comes at a time when addressing Australia’s insipid productivity performance has been earmarked as a top priority for a second term Albanese government, with the Productivity Commission highlighting the drag of regulation on business dynamism.
Australian approach
The Federal government has recognised the issue of over-regulation and has taken some initial policy steps.
Post the recent Economic Reform Roundtable, the Treasurer highlighted areas of focus for the Government as including better regulation, removing regulatory clutter and speeding up approvals.
The government has sought ideas from regulators to reduce regulatory burden which would not involve budget or legislative change. The 38 Commonwealth regulators have responded with more than 400 ideas to improve regulation and reduce compliance burdens, which the government is currently reviewing.
The government has also committed to the following actions:
a Council of Financial Regulators-led review of actions to improve financial sector regulation;
altering statements of expectations for Commonwealth regulators to emphasise the reduction of red tape and a better balance between outcomes and risk;
progressing the ‘tellusonce’ principle on how individuals and businesses engage with the government, to remove frustrating duplicative processes; and
conducting deep dives for priority sectors to streamline regulation.
As yet there has been no commitment to a quantitative regulatory burden reduction, regulatory stocktake or plans to overhaul policy making to ensure major reforms are subject to enhanced regulatory impact analysis and post implementation reviews.
The AICD wants to see a holistic plan that tackles this chronic regulatory burden and accumulation problem (see recommendations below).
New Zealand approach
New Zealand has established a standalone Ministry for Regulation to improve regulatory systems, especially the quality of regulation.
The Ministry has a Regulatory Response Team, which has been tasked with ‘tackling regulatory issues across the country that are holding back people and businesses from getting on with getting things done’. This includes looking into the issues people report through the Red Tape portal on the Ministry’s website. The portal was launched November 2024 to crowdsource compliance pain points from businesses.
The Ministry published its first Annual Report this year, covering the period from establishment in March 2024 until the end of June 2025. The report outlines achievements in removing unnecessary regulation, including:
Three sector reviews completed with two in progress.
$272 million in economic opportunity unlocked for the agricultural and horticultural sectors.
794 red tape issues reported via the Red Tape portal.
In further evidence of a focus on better regulation, New Zealand passed the Regulatory Standards Act 2025 on 18 November 2025. Relevantly, the Act has as one of its key aims reducing the amount of unnecessary and poor-quality regulation by increasing transparency and making it clearer where legislation does not meet standards.
New Zealand also has a target of at least one regulatory review each quarter.
Recognising the cost and complexity of mandatory climate reporting for smaller entities, in October 2025, the New Zealand Government announced that reporting thresholds for listed issuers would increase from $60 million market capitalisation to $1 billion.
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United Kingdom approach
The United Kingdom has a target to reduce the administrative burden of regulation on businesses by 25% by the end of Parliament (9 July 2029) under their regulation action plan (RAP). This translates to a reduction of 5.6 billion pounds.
The RAP aims to support investment and innovation, increase productivity and drive economic growth.
The first Progress Update under the RAP was issued in October 2025. Some examples of actions taken so far under the RAP to tackle regulatory burden include:
Increasing the monetary size thresholds for micro, small, medium and large-sized companies by approximately 50%, enabling up to 132,000 companies to benefit from lighter touch requirements.
Eliminating duplicative or redundant reporting requirements from the Directors’ Report and Director’s Remuneration Report and Policy, expected to deliver £185m in administrative savings every year.
Decommissioning low-value data returns and simplifying reporting requirements through its Transforming Data Collection Programme, which would reduce reporting burdens of over 36,000 firms, delivering over £25m in annual administrative savings.
Reforming the information which the Prudential Regulation Authority (PRA) requires from financial services firms to ensure it is proportionate. The PRA has already proposed or implemented cuts to existing requirements which save businesses over £100m per year in administrative burdens.
Future actions to streamline corporate reporting requirements have also been announced including exempting most medium-sized private companies from the requirement to produce a strategic report as part of their annual reporting.
Canadian approach
Canada completed a government-wide review to cut overly complicated, duplicative or burdensome regulation in July 2025.
The review is led by the recently created Red Tape Reduction Office and undertook a ‘Red Tape review’ across federal departments and agencies. The intent is removing outdated regulation, reducing duplication with provincial rules, and making it easier to access and deliver services.
Ministers have now reviewed the regulations in their portfolios and issued their first public progress reports, to share early achievements and describe next steps. Across the reports, Ministers identified approximately 500 actions to reduce regulatory red tape.
Canada also has a Red Tape Reduction Act, which is focused on controlling growth through the ‘1 for 1’ rule, where regulators must remove a regulation to offset every new regulation that imposes an administrative burden on businesses. In 2020, a review of the rule found that it is working and that between 1 April 2012 and 31 March 2021 there was an accumulated reduction in administrative burden on business of over $480 million.
AICD recommendations
Given this context, the AICD calls on the Federal Government to address the stock of existing regulation as a priority, including by committing to a 25% reduction in regulatory burden by 2030 as the first step. The AICD also calls on the Government to:
Publish an economy-wide regulatory stocktake and issue revised ministerial statements of expectations for regulators to ensure the right balance is achieved between growth and risk.
Lift the thresholds for large proprietary companies and Group 3 climate reporting entities benefiting at least 1,500 medium-sized organisations, with estimated savings of $1.7 billion over four years.
Adopt in full the Australian Law Reform Commission’s recommendations to simplify and modernise Australia’s financial services laws.
In parallel, measures must be taken to address the flow of future regulation, including:
Strengthened Cabinet scrutiny of new regulatory proposals, appointing an independent commissioner to oversee the Office of Impact Analysis, enforcing minimum consultation periods and conducting sector-wide reviews to cut regulatory burden.
Introducing systemic post-implementation reviews to assess the effectiveness of new regulations and expanding the use of legislative sunsetting.
Reinstatement of an independent expert body on corporate law and governance – modelled on the former Corporations and Markets Advisory Committee - to deliver long-term, evidence-based reform advice to support Treasury and the Government.
Such a reform agenda would help ensure Australia keeps up with peer jurisdictions and maintains its international competitiveness.
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