'Dumb' rules hampering productivity: study

When you think of red tape it usually conjures up a web of government regulation.

But new research shows businesses are just as bad at cluttering up our day-to-day working lives with rules that unintentionally hamper productivity.

In some cases, these self-imposed rules are just "dumb", according to Deloitte's chief strategy officer and co-author to the report, Gerhard Vorster.

And it comes at a cost of billions of dollars to the economy each year.

Deloitte Access Economics estimates the annual burden on the national economy of administering and complying with rules set by both governments and businesses is $250 billion.

Out of that it says $155 billion is the annual cost to administer and comply with rules the private sector imposes on itself.

"Unless and until we address this choking cost, it will be hard for Australia to be truly `open for business," economist and co-author to the report Chris Richardson says.

The report, `Get out of your own way: Unleashing productivity', is being released on Wednesday and is the fourth in Deloitte's `Building the Lucky Country' series.

Its release coincides with the Abbott government's second regulation repeal day this year.

"At least the public sector is aware that it can do better," Mr Richardson says.

Businesses usually impose rules on themselves for good reason - to increase controls, avoid risk, create compliance or make the organisation more effective.

Yet often there are unintended consequences from rules that become outdated due to changes in technology or business models.

Like the firm that rejects application forms from potential customers if they are completed in blue ink.

Or the business that spends all its time preparing, reviewing and assessing tenders because it goes to tender far too often.

Or the HR department that went through with an interview process even though it knew that part of the organisation was being disbanded.

Businesses have bulked up on jobs that create and then enforce a whole bunch of rules and regulations, and not just lawyers and accountants, but people in finance, IT and HR functions.

In fact, one in every 11 employed Australians now works in the compliance sector.

"Australia's compliance culture is cluttering our cost base and choking our innovation," Mr Vorster said.

Treasurer Joe Hockey will attend the official launch of the report in Canberra at 10.30am (AEDT).