In response to complaints from businesses that their cost of compliance with environmental laws is going up, Australian Prime Minister Julia Gillard ordered on Thursday the streamlining of state and federal laws.

She gave the order at a business forum in Canberra due to complaints from the Business Council of Australia, Australian Industry Group, and Australian Chamber of Commerce and Industry that green tape is hindering investments in billions of dollars.

"As we build a new economy in response to the structural changes being driven by our high dollar, deregulation reforms are more important than ever as they have the potential to lower business costs and improve productivity," 9News quoted Ms Gillard.

"We believe business leaders are best placed to advise on these matters because excessive red tape is often experienced at an individual, business or industry level," she added.

The three business groups said the green requirements were placing in peril $900 billion worth of projects. Due to various bureaucratic layers based on the federal Environmental Protection and Biodiversity Conservation Act, it takes an average of 19 months to secure project approval in urban areas.

Besides the long wait period, studies said that risks to resources and infrastructure projects caused by the green tape will cost a total of $820 million based on a single referral cost between $30,000 and $100,000.

Among the reforms they sought were to do away with double handling of environment assessments between the federal government and states, and to exempt 50 to 70 per cent of light industries and residential projects from development assessment processes.

South Australian Premier Jay Westherill, chairman of the Council for Australian Federation, backed the call of the business groups.

The meeting was attended by Australian premiers and business leaders who represented large companies such as Transfield, BHP Billiton, National Australia Banks, Wesfarmers, Origin Energy, Woolworths, Shell and Telstra.

If there would be changes in 17 areas of regulations, business cost would go down by about $4 billion a year and increase Australia's gross domestic product by over $6 billion over the long term, a Productivity Commission estimate said.

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