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REPORT SUMMARY
There has been a rise in excessively stringent regulation across the Australian economy, creating a complex, overlapping and growing web that burdens business and hinders productivity. Australia will need to reform these regulatory systems to meet its goals to increase housing supply and manage the energy transition.
There was widespread agreement on the need to simplify or cut regulation at the Federal Government’s Economic Reform Roundtable this year, with environmental, housing and building approvals identified as priorities.
Submissions to the Productivity Commission’s recent inquiry into creating a more dynamic economy documented increasing regulatory burdens across a broad range of sectors including financial services, mining and higher education.
Meanwhile, our recent report Towards a More Seamless Australian Economy highlighted that regulatory frictions preventing firms from operating seamlessly across Australia restrict competition, raise costs, reduce choice, constrain labour mobility and hold back economic dynamism and productivity.
Understanding where and how regulation is affecting industry is important to ensuring regulatory settings are fit for purpose and not a hand brake on innovation and dynamism.
To date, no analysis has tracked Australian regulatory restrictions by industry. In this paper, we present a starting point for a new measure.
We take a similar approach to previous analysis by the Mercatus Center at George Mason University’s RegData database of Australian federal Acts but add new industry-level analysis.
This analysis is enabled by advances in AI, which make coding for text scraping and analytics much more accessible and efficient.
We find restrictive terms in federal Acts have increased by around 30 per cent between 2003 and 2025. This is consistent with the trend in RegData but extended to more recent data.
The novel aspect of this analysis is the classification of each Act to one or more affected ANZSIC industries, based on keywords in the title, purpose statement and first three sections of each Act.
This reveals there has been a 39 per cent increase in regulatory restrictions that directly affect Australian industries.
Our estimates show that the stringency of federal legislation has increased over the past couple of decades, with particularly steep increases in key infrastructure, health care and education industries.
Further work would be beneficial to extend this analysis to other time periods, legislative instruments and state and territory regulation.
Our findings clearly show the increase in rules to which organisations must adhere, which creates additional costs and complexity to produce the goods and services that Australians want and need.
The analysis does not measure the quality of regulation, and it is acknowledged that there could be net positives from the increase in regulation if it drives better outcomes for society.
Our research supports work by the Productivity Commission and arising from the Economic Reform Roundtable showing Australia must do more to improve and better target regulation across industries.
This should go beyond reinforcing existing processes such as Regulatory Impact Statements. It could include new processes, such as creating a Senate committee that reviews regulatory burdens for one portfolio each year, similar to the oversight provided by the Joint Committee of Public Accounts and Audit.
Governments should prioritise simplifying or reducing regulation where it is not contributing to better economic or social outcomes for Australia.
There was widespread agreement on the need to simplify or cut regulation at the Federal Government’s Economic Reform Roundtable this year, with environmental, housing and building approvals identified as priorities.
Submissions to the Productivity Commission’s recent inquiry into creating a more dynamic economy documented increasing regulatory burdens across a broad range of sectors including financial services, mining and higher education.
Meanwhile, our recent report Towards a More Seamless Australian Economy highlighted that regulatory frictions preventing firms from operating seamlessly across Australia restrict competition, raise costs, reduce choice, constrain labour mobility and hold back economic dynamism and productivity.
Understanding where and how regulation is affecting industry is important to ensuring regulatory settings are fit for purpose and not a hand brake on innovation and dynamism.
To date, no analysis has tracked Australian regulatory restrictions by industry. In this paper, we present a starting point for a new measure.
We take a similar approach to previous analysis by the Mercatus Center at George Mason University’s RegData database of Australian federal Acts but add new industry-level analysis.
This analysis is enabled by advances in AI, which make coding for text scraping and analytics much more accessible and efficient.
We find restrictive terms in federal Acts have increased by around 30 per cent between 2003 and 2025. This is consistent with the trend in RegData but extended to more recent data.
The novel aspect of this analysis is the classification of each Act to one or more affected ANZSIC industries, based on keywords in the title, purpose statement and first three sections of each Act.
This reveals there has been a 39 per cent increase in regulatory restrictions that directly affect Australian industries.
Our estimates show that the stringency of federal legislation has increased over the past couple of decades, with particularly steep increases in key infrastructure, health care and education industries.
Further work would be beneficial to extend this analysis to other time periods, legislative instruments and state and territory regulation.
Our findings clearly show the increase in rules to which organisations must adhere, which creates additional costs and complexity to produce the goods and services that Australians want and need.
The analysis does not measure the quality of regulation, and it is acknowledged that there could be net positives from the increase in regulation if it drives better outcomes for society.
Our research supports work by the Productivity Commission and arising from the Economic Reform Roundtable showing Australia must do more to improve and better target regulation across industries.
This should go beyond reinforcing existing processes such as Regulatory Impact Statements. It could include new processes, such as creating a Senate committee that reviews regulatory burdens for one portfolio each year, similar to the oversight provided by the Joint Committee of Public Accounts and Audit.
Governments should prioritise simplifying or reducing regulation where it is not contributing to better economic or social outcomes for Australia.
Authors
Andrew Barker
Head of Research
Daniel Beadle
Economist
Andrew Barker
Head of Research
Daniel Beadle
Economist