In the latest of a series of attacks on regulation, the Business Council of Australia (BCA) has weighed in saying a continuance of regulatory reform will damage the Australian economy.

The BCA’s comments come as a series of senior business figures continue to publicly bemoan what they see as knee-jerk responses to business issues. Risk Management reported in April 2004 that regulatory compliance costs were spiraling into the tens of millions of dollars. Telstra CFO, John Stanhope, told Risk Management then that larger firms had fewer resourcing issues to meet compliance needs.

However, there is general agreement that it is the simultaneity of the demands that is causing problems.

Hugh Morgan, BCA president, said government frequently regulated without considering whether new regulation was required.

“It’s a case of regulate first, ask questions later,” he said. He added that in a number of cases, the complexity and amount of regulation was so confusing that Australia’s courts, including the high court, found it difficult to understand or adjudicate.

Richard Humphrey, chair of the BCA’s business reform task force, said that in the absence of an economic boom, the costs of compliance would be plainly obvious. “Regulation is a cost at three levels it costs businesses when they divert resources and bear the costs of compliance; it costs consumers when business passes on these costs in whole or in par; and it costs governments billions of dollars a year to administer it,” he said. “A strong economy can only shield Australia from the worst impacts of regulation for a limited time it will directly affect growth by tying up too many resources in ultimately unproductive activities.”

One worrying side effect of the regulatory revolution has manifested itself in a shortage of skilled professionals to fill compliance roles. Candidates with experience are thin on the ground and as such are charging a salary premium, increasing organisations’ resourcing costs.