“Australia’s economic and productivity growth is in the doldrums, and its little wonder given the number of federal employees engaged in regulatory activity will be equivalent to the nation’s fourth largest employer by 2026,” said Lachlan Clark, Research Fellow at the Institute of Public Affairs.
Today, new IPA research uncovers the rapid growth in the number of bureaucrats dedicated to creating and enforcing regulations, which is making it harder for Australians to get ahead and increasing the cost of doing business. The research shows:
- By the end of the 2026 financial year, the total number of staff employed by the federal government in regulatory roles will be more than 107,000.
- This represents an overall increase of more than 17,000, or 19 per cent, from the 2023 financial year.
- The cost to taxpayers to employ red tape enforcers alone will be approximately $15 billion by the end of the 2026 financial year.
- This is an increase of $276 million from the 2025 financial year and an increase of $2.7 billion, or 22 per cent, from the 2023 financial year.
- The growth has been driven by a hiring surge in the Climate Change, Energy, the Environment and Water portfolio, which has increased by 72 per cent over the past three financial years.
“With Australia’s productivity collapsing, rather than expanding the already huge regulatory burden on Australian business, the federal government should be cutting red tape to generate investment, create jobs, and unleash prosperity,” said Mr Clark.
The IPA’s research follows a commitment by federal treasurer Jim Chalmers that productivity would be a focus of a second term Albanese government. It also follows recent Productivity Commission data showing productivity declining 1.2 per cent in the year to December 2024, on top of a 0.4 per cent decline the year before.
“The IPA’s analysis shows that more than half the federal government’s workforce is engaged in regulatory activity. The rapid growth Australia’s red tape bureaucracy is a massive handbrake on our economic prosperity and standard of living,” said Mr Clark.
Previous IPA research shows red tape has soared in Australia to record levels, with red tape at the federal level having increased by 88 per cent between 2005 and 2013. In fact, red tape has grown at a rate two-thirds greater than the overall growth in the national economy in the same period.
“Every minute individuals and businesses spend filling out endless red tape requirements is a minute they are not able to dedicate to their businesses and generating economic activity. These costs are passed on to Australians through higher prices and fewer employment opportunities,” said Mr Clark.
“Red tape diminishes the potential of Australia, as too many are faced with the increasing cost and unnecessary delay associated with bureaucratic paperwork, instead of being able to get on with the job of building our future.”
To download the IPA’s research click here.
