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Australian organisations now spend $160 billion a year to comply with federal regulation, more than double the cost a decade ago.
NOVEMBER 2025
The cost of Commonwealth regulatory complexity
The AICD engaged leading economics advisory firm Mandala Partners (Mandala) to assess the current scale and impact of regulation in Australia on businesses, and the economy. The research finds strong evidence that Australia’s federal regulatory system has become more complex and burdensome, and points to practical steps for reform.
As part of this research, AICD and Mandala have produced two resources:
A detailed analysis by Mandala Partners which presents the modelling, methodology and supporting evidence behind the findings.
A concise overview highlighting the key findings, impacts and priority reform actions for Government.
What the research shows:
Regulation is stifling Australia’s organisations
- Regulatory overload is real and it is hindering productivity. Mandala’s research confirms what directors have long warned – Australia’s regulatory system has become a drag on productivity and investment
- Regulation must be proportionate. Australia doesn’t just have more regulation – it has denser, more complex laws that drive up costs. Businesses are increasingly focused on compliance-related work, redirecting resources away from growth and innovation.
- Global competitiveness. While the UK, EU, NZ, Canada and US have better regulation policy agendas to drive growth, Australia risks falling further behind without a similar commitment.
The evidence is compelling
- Regulatory costs are soaring. The total cost of meeting Commonwealth regulation has grown from $65 billion (4.2 per cent of GDP) in 2013 to $160 billion (5.8 per cent of GDP) today.
- When compared to G7 nations Australia ranks second (behind Japan) for administrative and regulatory burden. This means organisations face more friction to start, operate, and scale than almost any other advanced economy.
- Federal regulation has rapidly expanded since 2000.
- Legislation volume: +142%
- Pages of legislation: +190%
- Legislative complexity (2010 to 2022): +141%
- Board time on compliance has doubled from 24% to 55% in 10 years.
- Compliance-related employment has surged.
- Compliance specific roles have doubled since 2010 and salary spend is up from $1.9 billion in 2010 to $5.7 billion in 2024
- Growth in compliance roles has outpaced the wider labour market across all sectors – and is especially sharp in mining, construction and services.
Policy recommendations
Targeted actions are needed for better regulation. The AICD calls on the federal government to take the following actions as a priority:
- Existing regulation
- Future regulation
Existing regulation – addressing the stock of regulation
Increase the thresholds for large proprietary companies and Group 3 climate reporting entities benefiting at least 1,500 medium-sized businesses, with estimated savings of $1.7 billion over four years.
Publish an economy-wide regulatory stocktake to establish the true cost of red tape to business, and commit to a 25 per cent reduction in regulatory costs by 2030.
Adopt in full the Australian Law Reform Commission’s recommendations to simplify and modernise Australia’s financial services laws.
Future regulation – addressing the flow of regulation
- Strengthen Cabinet scrutiny of new regulatory proposals, appoint an independent commissioner to oversee the Office of Impact Analysis, and conduct sector-wide reviews to cut regulatory burden.
- Introduce systemic post-implementation reviews to assess the effectiveness of new regulations and expand the use of legislative sunsetting.
- Reinstate an independent expert body on corporate law and governance to provide long-term, evidence-based reform advice.
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