The Government and local councils have been told they need to work together better to bring consistency to regulatory decisions.
An independent inquiry into regulatory performance in local government has found that decisions differ greatly between councils, and even within individual councils.
The Productivity Commission report says councils manage a large and diverse set of regulations and the huge inconsistencies in how they interpret those rules is frustrating for businesses.
The commission's chair, Murray Sherwin, says the Government and councils need to work together on creating and enforcing regulations.
He says not enough attention is being paid to the way regulation actually affects local government.
The Government says it will consider the report's 29 recommendations and respond.