CPA: Interest Rate Cut Welcomed, But…

CPA Australia Calls For Regulatory Review

The Reserve Bank of Australia (RBA) has cut the official interest rate, offering some relief for businesses. However, CPA Australia says reducing regulatory burdens is critical to improving productivity and driving growth.

Gavan Ord, Business Investment Lead at CPA Australia, said while the rate cut is positive, broader reform is necessary.

“This long-awaited rate cut is welcome news for businesses after operating in a high inflation and high interest rate environment since 2022,” Ord said.

“But to really improve business opportunities and growth, the federal government must prioritise reducing regulatory burdens and improving policy development. Many business owners feel that government does not fully understand the challenges their policies create.”

The Impact Of Red Tape On Business

Ord said excessive regulation is slowing economic progress, particularly for small and medium enterprises.

“The sheer volume of regulation is choking the economy. Businesses understand the need for robust frameworks, but governments must focus on meaningful deregulation.”

CPA Australia is calling for a comprehensive review of existing regulations to identify and remove ineffective laws. The organisation also wants new regulations assessed to prevent unnecessary restrictions from replacing outdated ones.

Key Recommendations For Reform

In its 2025 pre-budget submission, CPA Australia outlined five recommendations to reduce regulatory pressure:

• Increase investment in technology and data to improve digital interactions between businesses, advisers and government.
  
  
• Fund ongoing reviews of existing laws to identify and remove inefficient rules.
  
  
• Improve public consultation to ensure business concerns are considered before new regulations are introduced.
  
  
• Incentivise the development of RegTech solutions to streamline compliance.
  
  
• Strengthen the assessment framework for industry levy proposals.

Ord said effective implementation of these recommendations would free businesses to focus on growth rather than compliance.

“If done effectively, businesses will have more time and resources to focus on priorities rather than onerous compliance. We need governments that foster economic growth. Governments cannot regulate the economy into prosperity.”

Long-Term Changes Needed

Ord said rate cuts alone will not resolve systemic issues holding businesses back.

“Hopefully today’s rate cut will be the first of many over the next couple of years, but this alone will not fix the structural challenges businesses face.”

He added that regulatory reform must go beyond reversing previous policies.

“Governments often fight battles against red tape and celebrate occasional wins, but this usually just means rolling back regulations introduced by previous governments. The cumulative effect is an ever-growing regulatory burden, adding to business complexity.”

Ord said a shift in approach is needed, regardless of which party forms government.

“A complete cultural shift is needed – one that prioritises a business-friendly environment and delivers practical solutions to regulatory challenges.”

CPA Australia has committed to contributing its expertise to efforts aimed at improving policy and regulatory settings.

“Reducing unnecessary complexity helps grow the economy, curtail cost-of-living pressures and support businesses to succeed,” Ord said.

Last Updated on February 22, 2025 by Nick Ross