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Like most Western democracies, Australia has seen constant business complaints about the regulatory burden and the need for reform. Governments have been sympathetic to these concerns and initiated numerous enquiries into ways to reduce red tape. One, published by the Regulation Taskforce in 2006, argues that a key problem is that Australians are becoming 'risk averse'. Drawing on research into the regulatory aftermath of major disasters, this paper argues that the Taskforce's approach is over-simplistic. Risk has at least three dimensions: actuarial, social and political. Proliferation of rules and regulations in the aftermath of a major disaster can be as much, if not more, the product of political risk aversion as it is of social and actuarial assessments. 'Smart' regulation, which aims to reduce risk while avoiding an excess of rules, must address all three dimensions. The paper explores when and how there can be a 'smart' response to major disaster.