Australia’s global competitiveness ranking has fallen again, prompting renewed calls from business leaders to cut red tape and boost productivity and investment.
The Business Council of Australia’s (BCA) 2026 Global Investment Competitiveness Index ranked Australia 21st out of 42 countries, based on seven key economic indicators drawn from 17 international indexes, with CEO Bran Black blaming over-regulation for the result.
“Ultimately, all of the settings [contributing to the rank] ... are totally within Australia’s control. At times of uncertainty, when global conflict is in front of us, the best thing that we can do is control the things that are within our scope to control so that we can be as resilient as possible,” he said in comments obtained by AAP.
The Council believes the country has many of the ingredients needed to succeed in the global contest for investment, but with competition intensifying and long-term productivity challenges, it must move fast to become a top-10 investment competitor and secure better living standards for future generations.
“We must remember that global capital is mobile and increasingly contested. Investors compare jurisdictions side by side. If other countries are making it simpler and more attractive to invest, making simple once-off changes won’t be enough on their own,” Black said.
“We need to outpace and keep outpacing our main competitor countries—Australian jobs rely on it.”
Pointing to the corporate income tax rate of 30 percent, Black said Australia was becoming increasingly uncompetitive compared to similar economies, hampering its ability to attract mobile global capital.
Australia’s Rankings Across Major Competitiveness Indexes
Australia ranked second on trade settings, which Black said was important given the increasingly uncertain global trading environment.“Australia’s trade success continues to be driven by significant policy reform across tariff reductions and trade agreements, whereas we fall down on regulation and business taxation, and so our ranking could surge with policy change in these areas,” he said.
The only other factor in which Australia made the top ten was the rule of law, where it ranked 10th. The country managed 11th on energy and 17th on labour market settings, but 37th on regulation, 38th on both business taxation and investment restrictions.
Notably, Australia’s rankings on several economic indicators have declined over the past six years.
To improve Australia’s competitiveness, the BCA wanted the government to cut regulatory costs by 25 percent by 2030, backed by a national red tape stocktake and stronger oversight.
The BCA also urged the government to fast-track low-risk foreign investment, and incentives such as an investment allowance or accelerated depreciation to make investment in Australia more attractive than other countries.
It also wanted to see “balance and flexibility” restored in the labour market, with simplified modern awards introduced, which it would “better support productivity and wage growth.”
“Large businesses often operate globally, and they are the same businesses that employ 4.7 million Australians, or one third of the workforce, and make up around 75 percent of investment,” Black pointed out.
Government’s Actions
Following the economic roundtable convened by Treasurer Jim Chalmers in August 2025, the Labor government has adopted a number policies to tackle red tape.In October 2025, the government introduced the Regulatory Reform Omnibus Bill aimed at slashing red tape and regulatory barriers, which later passed both houses of the parliament in November 2025.
