Unpredictable and unnecessarily complex government regulatory and decision-making processes and problems with planning design, scheduling and procurement, plus workplace relations, underlie Australia's deteriorating competitiveness, the Business Council said.
For example, the cost of building one kilometre of a major toll road or freeway had risen 143 per cent between 2006 and 2012, a BCA member said.
The cost per kilometre had risen from $4.6 million to $11.1 million - requiring 36 months to complete (up from 27 months) and 86 staff (up from 57).
Overall, Australian roads cost about 12 per cent more to deliver per square metre than in the UK and are built to a lower standard.
Labour productivity on resource projects in Australia was up to 35 per cent lower than on the US Gulf Coast, which has a deep pool of labour feeding its resource and industrial projects, the study found.
Coal and iron ore projects cost up to 38 per cent higher, with export gas projects up to 50 per cent more expensive in Australia than the US.
In property development, a building made to the same specifications costs 25 per cent more in Sydney than if built in London or Houston.