“Red tape created by state and federal governments is currently at the highest level in recorded history. With economic growth weak and government debt continuing to rise, Australia’s political leaders must cut red tape to unleash prosperity,” said Saxon Davidson, Research Fellow at the Institute of Public Affairs.
Today, the IPA released new research in partnership with George Mason University’s world-leading regulatory economics faculty, the Mercatus Center, which found;
- Red tape at the federal level has increased by 88 per cent since 2005, and is now at a record high (earliest available data).
- Red tape has grown at a rate two-thirds greater than the overall growth in the national economy since 2005.
- Regulations are increasingly lacking in transparency. Since 2005, 97% of all new regulations have been implemented by ministers and regulators, rather than normal parliamentary processes.
- There are currently over 370,000 regulatory restrictions currently imposed on businesses and individuals. This compares to less than 200,000 restrictions in 2005.
The research also found red tape is now at a record high in every state, with Victoria recording the fastest growing volume of regulation since 2019, increasing by 4.75%. Other increases in the same period include Tasmania up 4.7%, New South Wales up 3.5%, Queensland up 2.2%, South Australia up 1.8%, and Western Australia up 1%.
“Red tape is a major drag on productivity and economic growth, it makes it harder for business and individuals to be productive, which means basic goods and services, like food and housing, take us longer to produce and cost us more,” said Mr Davidson.
Previous IPA research found that to build an irrigation pivot on privately held pastoral land in Western Australia requires not less than eight different government permits and licences, making it harder for farmers to get on with their job or growing the food and fibre we need.
“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,” said Mr Davidson.
To reduce red tape, the research offers 10 recommendations for policymakers, including:
- The re-introduction of ‘Parliamentary Repeal Days’, whereby state and federal parliaments sits for two days each year to exclusively repeal or abolish legislation and regulations.
- Introduce a ‘one-in-two-out’ rule where by two regulations are required to be repealed for every new regulation introduced. This has been successful in the United States.
- Implementing a ‘regulatory budget’ for regulatory agencies, which would place a mandated limit on the volume of regulation that an agency can introduce.
The report applies a methodology – called ‘Regdata’ – pioneered by George Mason Univerisity’s Mercatus Center. ‘Regdata’ is a machine-learning method to count the ‘regulatory restrictiveness clauses’ of legislation – words and phrases such as “shall”, “may” and “must not” – to measure the regulatory burden.
Download the research report