Reports claim retail over-regulated but dairy industry not

THE retail sector is being weighed down by "unnecessary regulations", while development in the dairy industry is not being held back by red tape, two new reports claimed on Friday.

Two interim reports from the Productivity Commission, on investigations in the costs of doing business in Australia, made the findings.

But as the mining construction boom continues to taper off, the retail industry - expected to take up some of the slack - is still suffering from regulations.

Among the unusual rules the commission cited was one which said retailers that sold outdoor and indoor lighting had more trading hour restrictions than those selling only outdoor lighting.

Commissioner Patricia Scott said trading hours - an issue forming a part of the growing political industrial relations battle - were also costing retailers.

"Costly regulations are holding business and employment back, like the ongoing restrictions on trading hours on Sundays in South Australia, West Australia and Queensland," she said.

"The Queensland Competition Authority says these restrictions cost Queensland $200 million a year."

But the second of the two reports said regulations governing the dairy industry - still reeling from the supermarket milk war - was not a "primary factor" in holding back development.

The commission's interim reports were released for a public feedback period, until July, before a final report will be given to the Abbott government in October.