Axe the red tape: Big business presses for Trump-like attack on regulation

The nation’s biggest businesses are urging the federal government and opposition to adopt US President Donald Trump’s attack on red tape, warning that Australians’ living standards will fall without slicing regulations.

As leaders from 30 members of the Business Council of Australia prepare to press Treasurer Jim Chalmers and shadow treasurer Angus Taylor on ways to overhaul the economy, the organisation has called for a war on regulation in addition to tax relief for the business sector and the winding back of recent changes to industrial relations.

Business Council of Australia boss Bran Black says living standards will continue to fall if regulation is not cut across government.Credit: Alex Ellinghausen

Trump has employed the world’s richest man, Elon Musk, to head a department of government efficiency to slash trillions out of the US budget.

At the top of the Business Council’s pre-election wishlist is creation of a minister for deregulation who would have responsibility across all government departments to reduce laws and red tape in a bid to “make it easier to do business in Australia”.

Whichever party wins this year’s election should set a target to remove regulation that duplicates processes across governments and jurisdictions including at state and territory level.

The Productivity Commission should be charged with tracking the “burden” of regulations on local business and compare that against other nations, providing annual proposals to reduce regulations.

Council chief executive Bran Black said that without reducing red tape, Australia would struggle to bring down inflation and improve living standards.

“Other jurisdictions around the world, and especially the United States, are looking to make their regulatory systems more efficient – if we don’t follow suit then we will lose investment and see a consequent reduction in our way of life,” he said.

“I am consistently told that Australia’s regulatory settings are uncompetitive and are causing us to lose out on the critical investment needed to drive future prosperity – fixing this has to be a national priority.”

Opposition Leader Peter Dutton has appointed Jacinta Nampijinpa Price as a shadow minister for government efficiency, part of a broader policy agenda to rein in government spending. At the weekend, Dutton again signalled, if elected, he planned a reduction of the total public service workforce.

The Business Council proposal goes further, arguing for a national cabinet taskforce created to identify duplications and inefficiencies between state and federal governments.

It states that reforms across aged and primary care, disability and mental health and for veterans all offered scope for better services and reduced costs.

Apart from cutting regulation, the council is pressing for the company tax rate to be reduced to 25 per cent, the introduction of investment allowances for all businesses and a possible increase to the GST.

In a bid to help businesses develop their domestic operations rather than shift them overseas, the council argues firms should be provided government assistance at “each stage of the commercialisation” process, from early-stage research to manufacturing.

One area in which the council is pressing for broader reform is industrial relations, effectively calling for the abolition of the government’s string of changes that included the definition of casual employment and the use of labour-hire firms.

A review of the government’s IR changes suggest real wages are still short of their mid-2012 levels despite an increase in productivity.Credit: Wayne Taylor

It also believes enterprise bargaining should start only where most staff support the move or where an employer agrees and that the better-off overall test for deals should include non-monetary benefits.

But the draft review of the government’s IR changes, released on Monday, suggests the changes have not led to a decline in productivity while helping to lift real wages.

The review, by industrial relations expert Mark Bray and economist Alison Preston, found that despite real wages increasing in 2024, they remained 2 per cent below their level in mid-2012. Labour productivity, despite recent falls, was still “well above” that June 2012 point.

“Whether real wages continue to rise and the gap reduces remains to be seen. But the early signs are positive: collective bargaining is increasing, especially the coverage of collective agreements, and wages (and other indicators workers’ economic circumstances) have started to improve,” it found.

The Business Council is pressing for the return of the Australian Building and Construction Commission, a policy supported by the Coalition. The government abolished the ABCC, transferring its powers to the Fair Work Ombudsman (FWO).

The review found the FWO could address the still “substantial ongoing issues” within the construction sector being caused by both unions and employers.

ACTU national secretary Sally McManus seized on the report, saying it showed the government’s IR changes had helped working people.

“The independent review shows that these reforms greatly contributed to getting wages moving. Imagine life for working people if they had to go through a period of high inflation, high interest rates and no real wage growth,” she said.

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