Industry News

Report finds compliance burdens business

Economics advisory firm Deloitte Access Economics has released its report Get out of your own way: Unleashing productivity, which identifies the costs to private companies and the nation of self-imposed red tape.

According to the report, the cost of complying with self-imposed rules created by the private sector is double that associated with government regulations.

In a press release, Deloitte stated that the self-imposed rules of the private sector cost $155 billion a year: $21 billion to develop and administer, and $134 billion a year in compliance costs.

The report also indicated that the time required for employees to comply with self-imposed rules had become a “crippling burden”.

“Unless and until we address this choking cost, it will be hard for Australia to be truly ‘open for business’,” report co-author and Deloitte Access Economics partner Chris Richardson commented.

Richardson said that rules and regulations were “vitally necessary” but that a decade of prosperity had led Australia’s policymakers to “reach for a rule”, often without first weighing the costs and benefits of doing so.

Richardson added that the cost of government rules had also risen, with Deloitte estimating that in total, federal, state and local government rules and regulations now cost $27 billion a year to administer and $67 billion a year to comply with.

An unbalanced compliance culture
In the press release, Deloitte explained that over the years Australian businesses had “bulked up”, employing many people to create and then enforce rules and regulations.

“As a result, there are already more ‘compliance workers’ across Australia than there are people working in construction, manufacturing or education roles. In fact, one in every 11 employed Australians now works in the compliance sector,” the press release stated.

Deloitte chief strategy officer and Building the Lucky Country series co-author Gerhard Vorster said, “Australia’s compliance culture is cluttering our cost base and choking our innovation. That is coming at a massive and rising cost to our nation and to our ability to innovate. At least governments are aware of those regulatory costs, and are trying to rein them in.”

“Addressing the weight of Australia’s government and corporate red tape is the clearest path to raising national livings standards across the next decade,” Richardson added. “It is where we’ve made the biggest mistakes as a nation, but also where we can make the biggest – and most profitable – progress.

“There is a huge payoff to the profits of Australian businesses and the incomes of our workers if we simply get out of our own way. Doing so won’t just unleash business productivity – it will unleash Australia.”

Get out of your own way is part of Deloitte’s Building the Lucky Country series of reports that explore economic, technological and social drivers of issues facing the Australian economy.

The full report is available at

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