Red Tape Choke

Australian businesses are being drowned by $160 billion a year in red tape regulation, with the upcoming Budget being labelled a make-or-break moment for the nation’s companies.

In a pre-Budget submission, a group of nearly 30 peak bodies in Australia, including the Business Council of Australia, is calling for a regulatory overhaul.

Business Council of Australia chief executive Bran Black said that much like households, companies of all sizes faced cost-of-living pressures, with the Budget an opportunity to address this by removing unnecessary red tape.

“We’re seeing that there are extraordinary costs that businesses are incurring right across the economy, and it doesn’t matter if you’re in farming or in retail or in small business, you’re seeing those challenges,” he said on Monday.

He pointed out there were 25 different regulations to pour a cup of coffee in NSW, while cafe owners in Victoria have to jump through 37 different hoops to gain a licence.

Mr Black says putting in place a target of reducing 25 per cent of red tape between now and 2030 would put Australia in line with European nations who were trying to deal with their own red tape issues.

“We need to do the same thing,” he said. “And the time is right. We know in a world of turmoil and uncertainty around us, as we see day to day, particularly with challenges coming out of the Middle East.”

Local companies were “drowning” in red tape, Council of Small Business Organisations Australia director Wes Lambert said. “The Government says things are getting better but actually when you speak to small businesses around the country they just tell us things are getting worse,” he said

Mr Lambert pointed to Australian Institute of Company Directors research that found the overlap of local, State and Federal regulations was leading to a $160b-a-year hit to businesses.

Mr Black said the 2026 Budget was an ideal time to remove some of the regulatory burden.

“The calls that we’re making are calls that we’ve been making for some time now,” he said.

“But I think the importance of what we’re arguing for, particularly in having a target and putting in place measures to help us get there, has only been exacerbated by the challenges that we’re seeing emanating from the Middle East.”

Finance Minister Katy Gallagher said the Government will use the May Budget for reform but will only cut red tape where it makes sense.

“One of the things about regulatory reform is the Government’s keen to do something where it makes sense, where it improves outcomes, where it delivers better regulation,” she said.

“It’s not just a ‘cut all regulation and see how it goes’.”