Red tape takes Australia out of the race
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 actual cost per kilometre had risen from $4.6 million to $11.1 million , and required 36 months to complete (from 27 months) and 86 staff (57).
Overall, Australian roads cost about 12 per cent more to deliver per square metre than in Britain, and are built to a lower standard.
Labour productivity on resource projects in Australia is up to 35 per cent less than the US Gulf Coast, which has a deep pool of labour feeding its projects, the study found. Coal and iron ore projects are up to 38 per cent higher, with export gas projects up to 50 per cent more expensive.
Property development was similar; a building built to the same specifications cost 25 per cent more in Sydney than if built in London or Houston.
Frequently Asked Questions about this Article…
The Business Council says Australia’s competitiveness has deteriorated because unpredictable, unnecessarily complex government regulations and slow decision-making — often called ‘regulatory red tape’ — add cost and delay to projects. Problems with planning, design, scheduling, procurement and workplace relations were cited as key contributors to rising costs and lower productivity.
According to a BCA member cited in the article, the cost of building one kilometre of a major toll road or freeway rose 143% between 2006 and 2012, increasing from $4.6 million to $11.1 million per kilometre, while completion time rose to 36 months (from 27 months) and staff numbers increased from 57 to 86. The article links these increases to planning and procurement issues driven by regulatory complexity.
The article reports that Australian roads cost about 12% more to deliver per square metre than in Britain and are often built to a lower standard, reflecting higher local delivery costs and inefficiencies highlighted by the Business Council.
The study found labour productivity on Australian resource projects can be up to 35% lower than on the US Gulf Coast, a region with a deep labour pool supporting projects. That lower productivity contributes to higher project costs and weaker competitiveness.
The article states coal and iron ore projects can be up to 38% more expensive in Australia, while export gas projects can be up to 50% more costly compared with competitors, reflecting labour and delivery inefficiencies identified by the Business Council.
A building constructed to the same specifications was reported to cost about 25% more in Sydney than if it were built in London or Houston, indicating similar cost and productivity issues in property development.
For everyday investors, higher construction and project costs, longer timelines and lower productivity can pressure project returns and reduce Australia’s competitiveness. The article suggests these structural issues — regulatory complexity, planning and procurement problems, and workplace relations — are factors investors should watch when evaluating infrastructure or resource investments.
Yes — the article gives an example where a major road project’s timeline increased from 27 to 36 months and staffing rose from 57 to 86 people. Such increases in time and labour needs are the kind of operational changes that can drive up costs and affect project economics.
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