Red tape can be broadly defined as the excessive, unnecessary or confusing burden imposed on organisations and individuals as a result of regulation. Successive Victorian governments since 2006 and repeated industry surveys have identified reducing red tape as critical to unlocking significant economic growth. Effective red tape reduction must strike a balance between reducing the burden imposed and not detracting from the achievement of regulatory outcomes.

Governments have consistently claimed to have achieved targeted reductions in the regulatory burden. In reporting to government over the last decade, the cumulative reduction is estimated to be at least $3.1 billion. However, weaknesses in the assessment and evaluation of programs, and in the controls to prevent the creation of new red tape have undermined the effectiveness of these programs.

Our assessment of the approach to red tape reduction, and the feedback received from regulators and regulatory commissioners, shows that the current approach needs to be reviewed and options for its renewal provided to government. The current approach is likely providing diminishing returns and future sustained reductions will more likely be achieved through broader structural regulatory reforms.

We have identified practices that need to be improved. These include better understanding red tape, improving how initiatives are selected and evaluated, and critically revising the approach to stakeholder engagement.