Almost 30 Australian business and industry organisations, including the Insurance Council of Australia (ICA), are asking governments to cut the regulatory cost of doing business by 25% by 2030, saying the scale of compliance obligations is influencing prices and investment decisions. The Alliance of Industry Associations – whose members span small and large businesses, professional services, education, and agriculture – has outlined its position in a joint pre‑budget submission for the 2026-27 federal budget and an accompanying statement released Monday.
The alliance is seeking an economy‑wide review of regulation, a standard method of measuring compliance burden, and a formal target to reduce that burden over the remainder of the decade. Its submission cites analysis from the Australian Institute of Company Directors and Mandala Partners that estimates federal regulatory compliance costs businesses about $160 billion a year, or nearly 6% of GDP, more than double the estimate from 2015.
The alliance links regulatory settings to operating costs and, in turn, to premiums paid by households and businesses. ICA chief executive Andrew Hall said regulatory requirements represent a significant ongoing cost for insurers. “Reducing regulatory red tape is one of the most direct levers available to ease cost of living pressures at a time when the Middle East conflict is driving up prices across the economy. For the insurance industry alone, that burden costs $3.5 billion every year – a 25% reduction would deliver real relief for consumers right across the country,” Hall said.
The alliance’s submission presents regulatory change as one element of a broader economic agenda following the federal government’s 2025 Economic Reform Roundtable. It says that simplifying and better coordinating rules across jurisdictions and placing more emphasis on risk‑based regulation would reduce duplication and allow management and capital to be redirected to core business activity. Any such change could influence expense ratios, compliance processes, and timelines for bringing new products or changes to market, while prudentially regulated entities would also need to consider supervisory expectations under existing frameworks.
A substantial part of the submission examines how regulatory processes intersect with housing and infrastructure, including areas that shape underlying insurance risk. The alliance says overlapping and inconsistent planning and environmental approvals at federal, state, and local levels contribute to project delays and higher construction and infrastructure costs. Master Builders Australia chief executive Denita Wawn points to growth in the National Construction Code as an example of regulatory expansion, noting that Volume Two has increased from 93 pages in 1993 to 889 pages today. The submission also refers to Productivity Commission work estimating that “each new home bears regulatory costs of up to $320,000.”
UDIA national president Oscar Stanley said project feasibility is sensitive to rising costs across multiple inputs. “Housing supply doesn’t fail at the planning stage – it fails at feasibility. Every additional cost, whether it’s fuel, compliance, or delay, pushes more projects below the line. If we don’t act now, today’s cost pressures will further compound tomorrow’s housing shortage,” he said. The alliance argues that how quickly new housing, energy, and infrastructure projects proceed, and where they are located, has implications for exposure concentration, catastrophe risk, and long‑term affordability of cover. It also links regulatory processes to the timing and delivery of physical mitigation projects, such as flood levees and bushfire risk treatments.
The submission sets out a package of measures it wants considered in the budget and in subsequent policy work. Key elements include:
The alliance also sketches changes to how new regulation is made and assessed, including stronger requirements for regulatory impact analysis before Cabinet consideration, more systematic post‑implementation reviews of major laws, and wider use of sunset provisions where appropriate. Some members support additional institutional steps, such as a ministerial role focused on regulatory quality and clearer expectations that regulators report on compliance costs and consider economic impacts within their mandates. The submission highlights proposals on data standards and access, particularly for natural hazard and climate‑related information. The alliance says improved and more consistent data could inform investment and risk decisions, including pricing and mitigation planning, and “put downward pressure” on premiums over time.
