Australian companies were spending about A$250-billion each year on efforts to comply with rules and regulations, advisory firm Deloitte reported last week.

In its fourth edition of the Building the Lucky Country series, Deloitte noted that about A$95-billion was spent on administering and complying with public-sector regulations, and a further A$155-billion on administering and complying with rules companies chose to impose on themselves.

Focusing particularly on the mining sector, Deloitte national energy and resources leader Michael Rath noted that, as the industry moved from a construction to an operational phase, there had been a significant increase in the relative size of the “compliance workforce” within the mining sector.

“Mining jobs leapt in recent years and, given the pace of this growth, it says . . . that the number of compliance jobs within the sector was growing even faster.

“This has, of course, generated benefits, particularly on the safety front. “But as much as miners have good reason to complain about the impact of government regulations on them, the good profits evident over much of the last decade lulled many in the sector into a false sense of security, and we imposed on ourselves many new rules across human resources, information technologies, finance, marketing, legal and governance processes.”

Some of the largest drains on economic resources included fly-in, fly-out rosters that were ineffective and unproductive, which included a ‘no work’ policy on fly-in days, regardless of the distance travelled or the mode of transport.

Another drain on finances were operations where occupational health and safety managers filled in different reports for each contractor and subcontractor, rather than simply preparing a common report. Money was also spent on safety gear and safety inductions for visitors attending meetings in site offices, while safety tool box talks were required at the start of every shift, regardless of risk or work area.

Deloitte pointed out that another drain on capital were mine sites that ground to a halt when an incident occurred.

“These have come at an enormous cost, and it isn’t clear that they were worth it,” Rath said.

Report coauthor Chris Richardson said that both the public and private sectors could benefit from a new approach to managing risk.

“Where rules don’t exist, we create them. Where they already do, we make more. They overlap, they contradict, they eat our time and they weigh us down,” he said.

“We’ve created a ‘compliance sector’ that employs three times more people than mining. “Taking a long, hard look at the rules that individual organisations operate within will reduce the cost and complexity of doing business in Australia.”

Rath has pointed out that State and federal governments could do much to streamline the regulatory environment, but there is a bigger opportunity – and need – for business to slash the red tape it imposes on itself and improve productivity and innovation.