Everyone knows about those annoying internal company rules which create paperwork and put up a barrier to actually getting something done.
Now for the first time, a number has been put to the cost of those dumb rules.
Red tape, of both the government and internal company kind, is costing a combined $250 billion every year, according to analysis by Deloitte Access Economics. And the self-imposed rules of the private sector cost $155 billion a year: $21 billion to develop and administer and $134 billion a year in compliance.
Deloitte’s report, Get out of your own way: Unleashing productivity, identifies the costs to companies and the nation of self-imposed red tape.
Middle managers and senior executives spend 8.9 hours a week complying with the rules companies set for themselves, with other staff spending 6.4 hours.
Chris Richardson, Deloitte Access Economics partner, says: “Unless and until we address this choking cost, it will be hard for Australia to be truly open for business.”
Federal, State and local government rules and regulations now cost $27 billion a year to administer, plus a huge $67 billion a year to comply with.
According to Deloitte Access Economics, here are examples of “dumb rules” crushing Australia’s economy:
- The small taxi fares that have to await approval from the weekly executive team meeting
- The firm that rejects application forms from potential customers if they are completed in blue ink
- The firm that made engineers sign off on new parts at a fixed location, making them walk 15km a day
- The rules that made staff record every guest coffee made, but let them order as much alcohol as they like
- The firm that made staff do an ergonomic checklist when moving desks, then introduced ‘hot desking’
- The global HQ that told a newly acquired Australian subsidiary that it couldn’t put an Excel spreadsheet on its website, even though the new subsidiary’s line of business was selling data in Excel format to its clients
- The public servant who needed two approvals to spend $20 on marshmallows for a workshop
- The senior public servant in Sydney who needed the approval of his departmental head to travel to Parramatta as it was deemed to be outside the ‘city limits’.
Here’s the Deloitte chart outlining the overall costs
Feel free to add any dumb rules you’ve come across below.
Business Insider Emails & Alerts
Site highlights each day to your inbox.