Governance Institute Pre-budget submission 2026-27
Priority effort is required to address regulatory complexity and the administrative burden associated with business compliance and reporting
A record number of business insolvencies were reported in financial year 2025 and company profits have experienced a consistent decline.
What we are finding is that frameworks that govern innovation and business activities are becoming just as important as the innovations that create jobs and generate growth.
Further productivity reforms will play an important role in reducing business and transaction costs across the economy.
Inefficient, time-consuming, and costly business transactions, including the ever-increasing regulatory burden contribute to increased costs of doing business that is subsequently passed through to consumers.
A recent study by AICD and Mandala Partners finds that the total cost of meeting Commonwealth regulation has grown from $65 billion (4.2% of GDP) in 2013 to $160 billion (5.8% of GDP) today.1
For many businesses this can feel like running with a ball and chain.
Comprehensive corporate law reform is required to drive the productivity reform process.
Outstanding corporate law reforms are diminishing economic growth potential and future living standards
The latest review of Australia’s corporations and financial services legislation by the ALRC, shows that the Corporations Act is no longer fit-for-purpose.
This has a flow on effect that impacts all Australians that interact with corporations and financial services regulation, from the largest company to the smallest business.
Productivity enhancing reforms would trigger widespread benefits through lower prices, higher wages, higher profits leading to greater levels of investment and shareholder returns.
We require grassroots reforms to the way in which corporate laws are made and associated frameworks are designed to limit further complexity.
This will improve the methods in which civil society, consumers, regulators, the judiciary and business community engage and interact with the costly and complex Corporations Act 2001.
A Regulatory Efficiency Taskforce and re-institutionalising a corporate law reform body, similar to the former Corporations and Markets Advisory Committee (CAMAC) are tangible, low-cost methods that government can adopt to drive significant productivity-enhancing benefits, support the lowering of costs of operating a business and address efforts to stabilise ongoing inflationary pressures.
A framework for inclusive technology adoption
The rapid development of new technologies, particularly AI, has emerged as a once in a generation opportunity to drive a productivity up-tick across organisations of all sizes, in all industries.
Broad-scale uptake of AI technologies is not about replacing existing jobs but about transforming jobs and ways of working.2
Governance Institute studies have shown that the uptake of AI technologies is a patchwork of adoption and success.3
Organisations are finding it difficult to measure a return on investment in AI technologies, and recent experimentation with AI technologies have led to investments stalling or failing to progress past the initial pilot stage.4
Multiple factors are driving this trend including regulatory uncertainty, access to suitable labour and gaps in essential technology governance education and training.
Boosting funding to the NAIC to support its industry initiatives and public-private sector partnerships is one way of uplifting Australian AI governance education and training.
The announcement to fund the Australian AI Safety Institute is a welcome development, and we see their role as building trust and confidence in the use and adoption of the technology particularly where new areas of the technology emerge.
Establishing a voluntary AI reporting register is one way of providing the community, regulators and government the confidence that the technology is being used ethically and responsibly.
We support government initiatives to invest in resilient cybersecurity defences through the implementation of phase 2 of the 2030 Cyber Security Strategy. An uplift in first line defences through awareness raising of the role played by individuals and organisations is a critical enabler of successful technology adoption.
There is also a need to progress with Privacy Act reforms including efforts to address the inconsistent legislation across states and commonwealth legislation.
Governance Institute’s Pre-budget 2026-27 submission can be accessed here.
- https://www.aicd.com.au/content/dam/aicd/pdf/news-media/research/2025/economic-cost-of-regulatory-complexity-report.pdf
- https://www.rmit.edu.au/online/blog/2025/you-wont-lose-your-job-to-ai
- https://www.governanceinstitute.com.au/thought-leadership/2025-ai-deployment-and-governance-survey-report/
- https://www.governanceinstitute.com.au/thought-leadership/2025-ai-deployment-and-governance-survey-report/