Why Environmental Law Reform Is Needed Now.
When Dr Ken Henry speaks, the mighty listen. And when he says something is the biggest productivity challenge facing Australia, people take notice. A former Treasury Secretary, one-time NAB Chair, adviser to multiple prime ministers, and now Chair of the Australian Climate and Biodiversity Foundation, Henry’s credentials are not up for debate. So when he stood before the National Press Club yesterday and declared that fixing the Environment Protection and Biodiversity Conservation (EPBC) Act is more urgent than tax reform, it wasn’t hyperbole – it was a serious wake-up call.
Dr Henry's message was unambiguous: “I can think of other reforms to boost productivity. Some even harder, though none more important. And if we can’t achieve environmental law reform, then we should stop dreaming about more challenging options. (1)
Why Environmental Law Reform Matters
At stake is Australia’s ability to meet its climate and economic goals – and investors should be paying close attention. The Albanese government has pinned its second-term agenda on solving two big issues: climate change and housing. But both rely on infrastructure – and infrastructure relies on timely environmental approvals.
Dr Henry was blunt. Without major reform of the EPBC Act, there is “no chance” of meeting the government’s goals on net zero, renewable energy, critical minerals, housing or transport. “These projects … must be delivered quickly and efficiently. And they must be delivered in a way that not only protects, but restores, nature.
In Dr Henry’s eyes, the current system is too slow, too fragmented and too outdated. The main legislation is nearly 25 years old and, according to a 2021 review, no longer fit for purpose. Major projects – from solar farms to housing estates – are bogged down in a labyrinth of red tape and duplicated processes between federal and state governments. Investors don’t need another round of consultation. They need clarity, consistency and speed.
Productivity Isn’t Just About Tax
Dr Henry – who famously led the 2010 tax review under the Rudd government – now argues that environmental reform is a more pressing lever for economic growth. “Reforming our broken environmental laws is an obvious lever to enhance resilience and lift moribund productivity growth,” he said
This isn’t just about protecting koalas and wetlands (though those matter too). It’s about reducing the uncertainty that discourages capital investment in renewable energy, housing and infrastructure. When projects become entangled in unpredictable and prolonged approval processes, financing dries up, costs escalate, and confidence erodes.
The logic is straightforward: modern investors need modern laws. Henry’s vision includes clear national standards, an expert independent decision-making body (like Environment Protection Australia), and genuine collaboration across all levels of government.
The Politics of Progress
Dr Henry’s intervention may help build bipartisan momentum. His career spans both sides of politics, and his appeal is grounded in hard economic logic, not ideology.
And he hasn’t limited himself to environmental law. He also reignited the debate around a carbon tax, calling it “the world’s best carbon policy” that was dropped for “purely political reasons.” In his words: “Of course we need a carbon tax. But in the meantime, we’ve got something else, and we’ve got to make this something else work.
Time Is Not on Our Side
The urgency of reform was driven home by recent environmental events, including the devastating algal bloom in South Australia. Dr Henry described it not as an early warning, but a late one – “We should have been well awake decades ago.” Climate threats are no longer theoretical. They are already affecting Australia’s ecosystems, economies and public health.
That makes efficient environmental governance not just a moral imperative, but a financial one. ESG-conscious investors are increasingly factoring climate risk and regulatory certainty into their capital allocation decisions. If Australia can’t offer either, capital will find more predictable homes elsewhere.
What’s Needed Now
Dr Henry’s blueprint is clear and pragmatic:
A single, high-quality national framework to replace fragmented state-federal duplication
Legally enforceable national environmental standards
A professional, independent environmental protection agency to make decisions based on science
An end to case-by-case decision-making that attempts to balance economic, social and environmental goals in isolation
His critique of the current framework is particularly sharp. The idea that ecologically sustainable development (ESD) can be assessed “project by project” is, in his words, “simply nuts”.
The Bottom Line
For investors, the message is as practical as it is principled: environmental law reform isn’t a handbrake on progress – it’s the accelerator. Australia needs a system that protects biodiversity while enabling the infrastructure and clean energy projects that will drive future economic growth.
With strong leadership and bipartisan will, we can break the deadlock. Investors should be watching closely – and backing the call for reform.
References
Dr Ken Henry, the National Press Club address, July 16 2025.
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