Three-year federal election cycles are costing the economy billions of dollars and leaving governments with too little time to pursue difficult reforms, according to a report calling for fixed four-year parliamentary terms.

The new study, released on Monday by advocacy group 4 Year Terms Australia, estimates the change could deliver between $81 billion and $93 billion in economic benefits over 20 years through better government decision-making, increased private investment and lower election costs.

Australia is an international outlier, the report argues, combining a maximum three-year term with an unfixed election date that allows prime ministers to call elections when politically advantageous. Only three of 87 democracies examined have parliamentary terms of three years or less, while Australia is the only country in the study combining a three-year term with short notice of an election.

The report estimates reducing election frequency would save about $5 billion over 20 years, while better policymaking could contribute another $14 billion to $26 billion. Increased business investment and reduced uncertainty could deliver a further $62 billion.

Business investment falls by an average 2.4 per cent in election years because of economic uncertainty, according to research cited in the report.

Marty Gray, founder of 4 Year Terms Australia, said the three-year term was a historical hangover from Federation.

“Australia’s short election cycle means governments underperform and the private sector underinvests,” Gray said.

He said a fixed election date had broad public and political support and should be legislated before a referendum on extending the term. The report also argues an election long weekend could help win over voters wary of longer parliamentary terms.

The report comes weeks after Labor’s National Conference committed to progress options for constitutional reforms including fixed, four-year terms for the House of Representatives and the Senate, the first time the party platform has made such a commitment as a stand-alone item.

Federal Parliament’s Joint Standing Committee on Electoral Matters is due to report in November on the length of the parliamentary term and the potential for fixed terms.

Gray also pointed to the increasing complexity of government, noting federal parliament now passes more than 10 times as much legislation per term as it did at Federation while sitting around half as many days per term as comparable Westminster systems including Canada, Britain and Ireland.

Bills debated in the Senate receive 45 per cent less debate time in the three months before an election, the report says.

”Australia’s short and variable election cycle means we spend nearly one third of our time in a lower productivity environment,” Mandala Partners director Madeleine McCure said.

“Governments are 25 per cent less likely to pursue meaningful reform in an election year. Business investment and economic certainty also drop.”

The report cites Labor’s environmental law reforms as one example, arguing they were repeatedly delayed by state and federal election cycles before eventually passing in November 2025.

Changing the federal parliamentary term, however, would not be straightforward. A four-year term would require a constitutional referendum, while a fixed election date could be introduced through legislation.

The proposal has unusually broad political support. Prime Minister Anthony Albanese and former prime ministers John Howard and Malcolm Turnbull are among its backers, as well as Commonwealth Bank chief executive Matt Comyn.

Australia last put four-year federal terms to a referendum in 1988 when the Hawke government’s proposal was rejected.

The report argues the defeat should be seen as a warning rather than a reason to abandon reform, recommending any new referendum be stand-alone, backed by both sides of politics and held alongside a federal election.

Albanese has previously said he supports four-year fixed terms but, scarred by the failed Voice referendum, he has appeared to kill off any immediate prospect of pursuing the reform.

“Referendums are pretty hard to carry in this country,” he said. “Opportunism kicks in and unless you have bipartisan support, then it’s not going to be supported.”

Howard has described the current system as “ludicrous”, given every state and territory has moved to four-year terms.

Polling commissioned from JWS Research found just one in five Australians supported the current system of three-year terms and the prime minister choosing the election date.