Queensland potential held back by rules, rules and more rules

Media releases

Queensland’s potential held back by rules, rules and more rules

Deloitte report

29 October 2014: Rules are costing Queenslanders $50 billion every year.

In a new report, Get out of your own way: Unleashing productivity, the fourth edition of its Building the Lucky Country series, Deloitte calculates the national cost of rules and regulations at $250 billion annually across the private and public sectors.

That cost comes in two parts:

  • $95 billion – the cost of administering and complying with public sector regulations
  • $155 billion – the matching cost of administering and complying with the rules that organisations choose to impose on themselves.

Deloitte Queensland Office Managing Partner, John Greig, said: “We often blame government for forcing us to comply with rules and regulations. Yet the dollars locked up by businesses in complying with self-imposed red tape are double those associated with government regulations.

“Rules are vitally important. They protect the likes of our health and safety and the environment. But poorly designed rules, and too little consideration of their impact and their effectiveness, have increased the cost burden on our State, and placed a brake on our potential productivity and innovation.

“Queenslanders spend more time complying with ‘self-imposed’ red tape than any other State.”

Media contact:

Vessa Playfair

Head of Corporate Affairs
M: +61 419 267 676
T: +61 2 9322 7576
Email

29 October 2014: Rules are costing Queenslanders $50 billion every year.

In a new report, Get out of your own way: Unleashing productivity, the fourth edition of its Building the Lucky Country series, Deloitte calculates the national cost of rules and regulations at $250 billion annually across the private and public sectors.

That cost comes in two parts:

  • $95 billion – the cost of administering and complying with public sector regulations
  • $155 billion – the matching cost of administering and complying with the rules that organisations choose to impose on themselves.

Deloitte Queensland Office Managing Partner, John Greig, said: “We often blame government for forcing us to comply with rules and regulations. Yet the dollars locked up by businesses in complying with self-imposed red tape are double those associated with government regulations.

“Rules are vitally important. They protect the likes of our health and safety and the environment. But poorly designed rules, and too little consideration of their impact and their effectiveness, have increased the cost burden on our State, and placed a brake on our potential productivity and innovation.

“Queenslanders spend more time complying with ‘self-imposed’ red tape than any other State.”

Media contact:

Vessa Playfair

Head of Corporate Affairs 
M: +61 419 267 676
T: +61 2 9322 7576
Email

Chart - Hours spent complying with ‘self-imposed’ red tape per week


 

Note: Australia is not a weighted average of State results, as many survey respondents operate in more than one State.
 

A survey of Australian business leaders revealed that, on average, Queenslanders spend a remarkable – and costly – 8.5 hours per week complying with rules that organisations set for themselves.

Queensland ranks high relative to other states, but that isn’t because it is strong in sectors such as mining and construction. Although compliance burdens are rising fast in those two sectors, they aren’t yet particularly high.

Rather, it seems that Queenslanders are the victim of the ‘branch office syndrome’, with the same survey showing that organisations operating across States had compliance burdens significantly higher than those operating in just one State.

So, with corporate HQs in New York, Sydney or Melbourne calling the shots, local compliance costs can be huge. In total, the costs of administering and complying with rules and regulations – both public sector rules and those that organisations choose to impose on themselves – come in at $50 billion in Queensland.

Businesses usually impose rules on themselves for good reason – to increase controls, avoid risk, create compliance or make the organisation more effective. Yet often there are unintended or unforeseen consequences, with the new rules creating overlaps in regulation, or old rules becoming outdated due to changes in technology or business models. Examples of ‘dumb’ rules uncovered by Deloitte include:

  • The organisation with 200 pages of procurement guidelines that no-one ever checked when purchasing
  • Staff made to write down all the risks they faced into a database which then never saw the light of day
  •  A firm that spent all its time preparing, reviewing and assessing tenders as it went to tender too often
  •  Board papers that buried Directors in heaps of words and numbers without adding value
  •  The organisation that made staff monitor and report on those using meeting rooms without bookings
  • The staff who complete purchases orders to get invoices approved after the invoice has been received.
Queensland potential held back by rules

Deloitte has taken a dose of its own medicine, asking its employees to identify ‘dumb rules’ that get in the way of innovation, collaboration and creativity, with a ‘Dumbest Things’ internal campaign.

“Every few years over the past decade we ask our people ‘What are the dumb things we do? What is stopping you doing your job?’ And each time we identify a disappointing level of unnecessary rules, which we have to remove,” Greig said.

“We only did this recently, for the fourth time, and still we are finding rules that slow us down.

“For us, our Dumbest Things campaign is the beginning of a purposeful and programmatic unleashing of productivity across the organisation. It’s about actively reminding all our people that innovation comes from building a culture that focuses on what must go right, not what could go wrong.”

He concluded: “Australia’s compliance culture is cluttering our cost base and choking our innovation. That is coming at a massive and rising cost to our nation and to our ability to innovate.

“Understanding and taking advantage of our competitive strengths as a State is as important as ever, but the value of doing so pales before the potential efficiency gains of ‘ruling ourselves’ more effectively.

“Both our public and private sectors can benefit from a new approach to rules and regulations, but the biggest opportunity lies in business slashing its own red tape. By cutting or simplifying our rules, we can get out of our own way and unleash the potential of our pent-up productivity.”

Note: Separate media releases cost the red tape challenges faced by industry sectors and at a national level.

A Get out of your own way infographic and the report are available on request.

 

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