The Global Competitiveness Report 2013-14 produced by the World Economic Forum (WEF) has Australian ranked 21st, down one place from last year.
"Out of 148 countries, Australia's labour market efficiency ranking has slipped from 13th in 2011-12 to 54th in 2013-14," Willox said.
"In fact, when asked to select the five most problematic areas for doing business in Australia, 17.3 per cent of respondents saw restrictive labour regulations as the top difficulty.
"Among the other findings, Australia has slipped to: 135th for the flexibility of our wage determination, down from 123rd last year and from 110th in 2010-11; 128th for the burden of government regulation, down from 96th last year and from 60th in 2010-11; 113th for pay and productivity; down from 80th last year and 53rd in 2010-11; and 109th for the total tax rate, down from 106th last year and 94th in 2010-11.
"These results highlight the high cost of doing business in Australia and the pressing need to improve key areas including industrial relations, business regulation and company tax in order to lift our international competitiveness."
