Mr Hockey used the anecdote on Wednesday to tell business owners that he feels their frustration when it comes to red tape.

The Abbott government is holding its second "red tape repeal day" on Wednesday, with plans to repeal nearly 1000 pieces of legislation and regulation to bring total net deregulatory savings of over $2.1 billion since coming to office.

"I took my kids to a little park up the road and there's a pizza shop there and we met up with another family … [there were] two tables outside [with] three chairs on one table, four on the other," Mr Hockey said in Canberra.

"I went to put the two tables together and the owner of the pizza shop came out and said 'I'm sorry Mr Hockey, you're not allowed to do that, the council regulation prevents you putting the two tables together'."

"There were eight of us, so I went inside to get another chair and they said, 'Sorry Mr Hockey, they've said you can only have seven chairs [outside], not eight'."

Mr Hockey said that's when he "exploded."

"I actually tracked down the mayor, it was 6 o'clock on a Friday night, and I think the whole suburb heard the conversation," he said.

"I want you to know that the Treasurer of Australia feels the same pain you do … that's what I'm trying to say," he said in comments aimed at small business owners.

It comes after Prime Minister Tony Abbott issued a call to arms this week for big and small businesses, urging them to help make the case for urgent economic reform of the federation.

A Deloitte Access Economics report, released in Canberra on Wednesday, shows Australian businesses are seriously struggling to meet compliance costs.

It found the combined cost of administering and complying with public and private sector bureaucracy is costing Australia $250 billion a year.

But surprisingly, it also found the cost of complying with self-imposed rules by the private sector is "double" that associated with government regulations.

"The self-imposed rules of the private sector cost $155 billion a year: $21 billion to develop and administer, and a stunning $134 billion a year in compliance costs," the report says.

Mr Hockey said big businesses needed to realise that if they are struggling with regulatory compliance costs then they should remember that many of those costs are self-inflicted.

The Treasurer also said the Coalition government was determined to introduce more flexibility to the economy in a range of areas, including the workplace, as well as repealing public sector red tape.

He said making "just a small saving" in the estimated quarter of a billion dollars in annual public and private sector compliance costs would "make a big difference, and I encourage everyone to focus on that."

"Deregulation is crucial, reduction in red tape … there are three areas where government is focused on deregulation," Mr Hockey said.

"First we want to make interaction by individuals and businesses less complex, less costly and more time-efficient," he said, pointing to the introduction of the MyGov website, to which 5 million Australians had now signed up.

The second step was the two annual repeal days each year, which had already cut $2.1 billion in so-called red tape, regulation and compliance costs.

"And the third area is deregulation, to boost investment," Mr Hockey said.

"Free trade agreements are helping do that, two have been signed. I'm more than hopeful we can nail a third FTA agreement with China by the end of this year."

Bureaucracy is universal. That much was evident from the enthusiastic response to Fairfax Media's report about Australian companies' auto-asphyxiation with red tape, following a study by Deloitte Access Economics.

The consultancy found businesses' own rules and procedures were costing $155 billion a year in development and compliance, on top of $94 billion a year spent administering and complying with government regulations. 

From mining to airlines to the public service, there were horror stories aplenty from readers bow-legged under the weight of internal pen-pushing and bumbledom.

Julian, from Sydney, was volunteering for a NSW heritage organisation when he made the mistake of offering to go out and buy snacks for a group of colleagues.

"The pantomime we had to go through to get the $50 cash necessary was staggering - fill in a form, give it to someone, she goes off to finance, comes back with cash, more paperwork as she hands over the money," he wrote.

"Took as long as the actual shopping!"

An employee at the ABC said the public broadcaster recently embraced open plan offices, giving staff the unbridled joy of standing desks. But it turns out standing desks should not always be used for, well, standing.

"Best practice, we were informed through OHS, is half an hour standing, half an hour seating," the ABC staffer told Fairfax Media. "But you have to wind them up! They take five minutes to go from down to up. Productivity takes a hit and OHS warn us we're winding the cranks up wrong and are at risk of tearing rotator cuffs!"

One reader reported he was currently "working" on a large iron ore project but "getting nowhere fast". In one incident, his team needed to move a small compressor about 150 metres across flat terrain but were not allowed to push it. Nor were they permitted to tow it using a nearby ute. Despite having more than 20 years of driving experience, they had not yet completed the official "driver training".

"In my first 28 day swing I literally did about four days' work due to lack of parts or lack of minor compliance training," the reader wrote.

Another reader, Ryan, said he worked for one of the nation's "most favoured" employers. But that did not stop bureaucrats unleashing a deluge of correspondence and paperwork upon their long-suffering staff. 

"In the last week, I received two documents, one 252 pages another 85 pages, that must be read during my days off," he said. He also received an email with detailed instructions on how to securely enter and exit the building.

"Of course, the attachment won't open and that means more time wasted talking to IT to get this sorted out."

In an apt example of procedural excess, the Deloitte report cites an aviation company which had strict controls over how - and importantly, where - staff could access its inventory of small parts. According to Deloitte, maintenance workers spent up to four hours a day walking 15.5km back and forth to collect parts. A review introduced a standard cart of materials and mobile electronic ordering devices, reducing walking time by 75 per cent.

The report also references an unnamed large organisation that sought to reduce project overruns. Subsequently, more than 200 "steps and handoffs" were introduced to the approval process. As it transpired, the costs of going through the lengthier approval process exceeded the budget overruns the company had been trying to prevent. Only when the process was simplified did the firm improve its efficiency and bottom line.

Commenting on the report, Treasurer Joe Hockey recalled his own encounter with bureaucratic madness, taking umbrage at council regulations that ruined his outing to a local pizza shop. Mr Hockey "exploded" when informed he was not allowed to push two alfresco tables together or bring an eighth chair outside.

One reader was moved to quote sci-fi writer and essayist Jerry Pournelle's "Iron Law of Bureaucracy", which decrees: "In any bureaucratic organisation there will be two kinds of people: those who work to further the actual goals of the organisation, and those who work for the organisation itself. In all cases, the second type of person will always gain control of the organisation, and will always write the rules under which the organisation functions."

- MICHAEL KOZIOL