The answer: Inconsistent state and territory regulations.

 

Australia’s inconsistent state and territory regulations are imposing a growing economic penalty, with new modelling showing regulatory fragmentation will wipe $26 billion from national GDP over the next decade and add more than $9 billion to Australians in household costs.

 

The new Australian Retail Council (ARC) report, The Fragmentation Tax, prepared with Mandala, exposes the hidden tax on businesses and households, acting as a persistent drag on productivity, investment and consumer prices.

 

ARC CEO Chris Rodwell said regulatory inconsistency is inflating costs across the economy.

 

“Retailers operating interstate are forced to run parallel compliance systems, fragmented logistics models and jurisdiction-specific supply chains,” he said. “Businesses are spending more time and money navigating different rules when they could be investing in jobs, innovation and growth.”

 

The report highlights transport and logistics, and environment and waste regulation as major sources of avoidable cost. Fragmented heavy vehicle standards, accreditation regimes, duplicate fatigue management rules, delivery curfews, container deposit schemes, and single-use plastics rules are collectively costing the economy hundreds of millions of dollars annually.

 

ARC chief economist Glenn Fahey added that unless governments tackle these inefficiencies, unnecessary price pressures will persist.

 

“Right now, a truck carrying a legal load in Sydney can be forced to stop at the border and transfer that load onto a different vehicle simply to continue to Brisbane. Retailers are sourcing different packaging and coffee cups for different states," he said.

 

The report makes three key recommendations: