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Private sector bureaucracy costing business more, says Deloitte

The combined cost of administering and complying with public and private sector bureaucracy is costing the nation $250 billion every year, with private sector bureaucracy accounting for a majority share, according to Deloitte.

News Staff Reporter 02 February 2015
— 1 minute read

A recent report from Deloitte Access Economics states that the self-imposed rules of the private sector cost $155 billion a year: $21 billion to develop and administer, and a stunning $134 billion a year in compliance costs.


Chris Richardson, a Deloitte Access Economics partner said that unless and until Australia addresses this choking cost, it will be hard for the nation to be truly “open for business”.

“To be clear, rules and regulations are vitally necessary. They cement the key foundations of our society, protecting the rule of law and a wealth of standards in everything from health to safety and the environment. And they can help businesses to reduce risk and plan for the future.

“However, a decade of prosperity has seen Australia’s policymakers ‘reach for a rule’, often without weighing the costs and benefits of doing so, and the cost of government rules has risen since the last time the Productivity Commission added them up," Mr Richardson said.

Matt Saines, national leader of Controls Transformation at Deloitte, said businesses should focus on what must go right and think about the future to get the right balance of controls and through an intelligent approach to risk better understand “how much control is enough”.

“By following a structured approach to rule selection, and using existing data to look at things like bottlenecks, inefficiencies, rework etc - a business can redefine its processes and potentially produce a vastly different set of rules that work for the business and get and measure the right outcomes.

"In this way, a business will better manage risk, improve its definition of its risk appetite, align it more with capacity, and remove unnecessary self-imposed rules to influence its productivity,” Mr Saines said.

Private sector bureaucracy costing business more, says Deloitte
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