The cost of red and green tape on Australian businesses has more than doubled to $160 billion since 2013, driving closures across forestry, fisheries, agriculture and mining. That is according to retired forester John O’Donnell, who has called for a Productivity Commission-led review of all federal, state and local legislation.
The $160 billion figure, drawn from Mandala Partners’ 2025 research, represents 5.8 per cent of GDP and is a sharp increase from a 2013 estimate of $65 billion. It comes as federal legislation has grown by 142 per cent since 2000, with boards now spending more than half their time on compliance rather than investment.
Housing construction productivity has fallen 53 per cent over 30 years, whilst broader labour productivity has risen 49 per cent over the same period, according to Productivity Commission data released in 2025. Dwellings completed per hour worked have collapsed, even as the wider economy has become more efficient.
Primary industries have borne the heaviest impact, with forestry, fisheries, agriculture and mining all facing closures, lost investment and increased sovereign risk. O’Donnell argues regulatory expansion has created a system that ‘burdens the nation rather than building it,’ pointing to federal and state laws he says have caused serious damage to Australia’s primary industry sector.
Manufacturing now represents just 5.1 per cent of GDP, a decline O’Donnell argues has been accelerated by regulatory burdens that make domestic production uncompetitive against imports. Those regulatory costs flow through to consumers as higher prices and slower economic growth, squeezing households already facing cost-of-living pressures.
Environmental regulation is a key area where regulatory creep has become contentious, and O’Donnell points to frameworks that delay projects and reduce landholder autonomy. He warns of a lack of formal science verification across Productivity Commissions and Audit Offices, describing this gap as undermining policy credibility.
Bushfire management is where the regulatory consequences are starkest for O’Donnell, who has long argued for low-intensity, maintenance-based fuel-reduction burning to reduce bushfire loads. He cites research by Boer and colleagues (2009) showing prescribed burning significantly reduced both the incidence and the extent of unplanned bushfires, whilst arguing that current laws often hinder proactive fire management.
Disaster preparedness has been chronically underfunded, with every dollar invested in preparation saving $13 on average in economic costs. O’Donnell is calling for Productivity Commission-led reviews that are ‘free from political influence and activist agendas,’ to overhaul what he describes as a bloated and inconsistent legislative system.
