Best Practice Regulation
Regulations are essential for the proper functioning of society and the economy. They include any laws or other government-endorsed ‘rules’ where there is an expectation of compliance. The challenge for government is to deliver effective and efficient regulation — regulation that is effective in addressing an identified problem and efficient in terms of maximising the benefits to the community, taking account of the costs.
Best Practice Regulation Making in Australia
In Australia, the Taskforce on Reducing Regulatory Burdens on Business [
] noted that regulation is pervasive and an on-going coordinated effort is required to improve it across all levels of government. The Australian Government, the Council of Australian Governments (COAG) and most Australian states and territories have integrated these approaches into their best practice regulation processes.
When developing a regulatory proposal involving new or amended regulation or a review of regulation, government officials should familiarise themselves with these processes.
- The best practice regulation processes compliment other initiatives being undertaken as part of The Deregulation Agenda.
The Office of Best Practice Regulation (OBPR) has been assigned a central role in improving the quality of regulation by administering the best practice regulation requirements for both the Australian Government and COAG.
- As part of the OBPR’s coaching role, policy officers are strongly encouraged to contact the OBPR early in the policy development process to ensure that the Australian Government’s or COAG’s requirements for best practice regulation are met.
Rationale for Best Practice Regulation Processes
While much regulation is necessary and beneficial, there are cases where this may not but be so or where regulations could be better designed. There is a public perception that rule makers too often concern themselves with effectiveness, ignoring efficiency issues — that is, existing or proposed regulation may achieve a particular policy goal but not necessarily be the ‘best’ or lowest cost means of doing so.
Member countries of the Organisation for Economic Cooperation and Development (OECD) are embracing the notion of regulatory governance which involves the issues of transparency, accountability, efficiency, adaptability and coherence. Major tools identified by the OECD to improve the efficiency and effectiveness of regulation include:
- the use of regulatory impact analysis
- the systematic consideration of alternatives
- wide public consultation
- improved accountability arrangements in the review of existing regulations and the development of new ones.
Determining whether regulation meets the dual goals of ‘effectiveness’ and ‘efficiency’ requires a structured approach to policy development that systematically evaluates costs and benefits.
- The problem to be addressed and the related policy objective should be identified as first steps in the policy development process.
- The consideration of a range of options for achieving the objective (as well as a ‘no action’ or status quo option).
- An analysis of the likely economic, social and environmental consequences.
- The policy development process should at least ensure that the benefits to the community of any regulation actually outweigh the costs, and give some assurance that the option chosen will yield the greatest net benefits.
Contact for information on this page: OBPR contacts page
