The Federal Government has confirmed plans to cut red tape to reduce the cost of regulation to business.

Finance Minister Lindsay Tanner told a Sydney Institute function last week he will target regulation that is "outdated, excessively burdensome on business or unfair to consumers".

He says the reforms will save businesses time in preparing documents such as BAS statements and state tax returns, as well as product disclosure statements that can run to more than 50 pages.

The Productivity Commission has estimated the cost of compliance with regulations could be as high as 4% of gross domestic product per year, or $40 billion.

"The cost of regulation is notoriously difficult to estimate," Mr Tanner said. "Spread across a large number of businesses it often goes unnoticed, even though the aggregate burden may be substantial."

He plans to put forward a proposal for regulatory reform to the Council of Australian Governments next month.

"The old model of command and control is giving way to a new model where government acts more as a facilitator," he said.