Changes to the Australian Government’s Regulation Impact Statement requirements
The Australian Government has reaffirmed its commitment to a rigorous system for assessing the regulatory impact of proposals which impose an obligation on business. In doing so, it agreed to a number of changes to the Regulation Impact Statement (RIS) requirements aimed at better balancing the rigour and practicality of the RIS process in order to encourage greater compliance. A summary is provided about the changes described in the revised Best Practice Regulation Handbook (June 2010), along with advice on how they relate to the old RIS requirements.
- RISs to be required for all regulatory proposals that have an impact on business or the not-for-profit sector unless the proposal is of a minor or machinery nature and does not substantially alter existing arrangements
The old requirements stated that a RIS was required for proposals that were likely to have a significant impact on business and individuals or the economy.
- Removal of differentiated requirements for proposals with medium and significant impacts on business
Under the old requirements, a RIS was required for proposals that were likely to have a significant impact on business and individuals or the economy, while for proposals that were likely to have medium business compliance costs an analysis using the Business Cost Calculator (or approved equivalent) had to be prepared.
Under the new requirements, proposals with both medium and significant impacts would require preparation of a RIS. In practice this change will not result in the preparation of many additional RISs, as very few Business Cost Calculator-only reports were prepared under the old arrangements.
- Implications for ‘individuals’ or ‘the economy’ be considered only in the context of other impacts on business
Under the old requirements, the ‘trigger’ for the preparation of a RIS required consideration of likely regulatory impacts on businesses and individuals or the economy.
Under the new requirements, the trigger requires consideration only of the business and not-for-profit sector impacts, with the impact on individuals or the economy to be incorporated in any resulting RIS. This change is not likely to result in fewer RISs being prepared, as in practice very few RISs were prepared that did not have an impact on business or the not-for-profit sector.
- Removal of the requirement for agencies to undertake preliminary assessment or to self-assess the requirement for a RIS, with this decision to be made by the Office of Best Practice Regulation (OBPR)
Under the old requirements, departments/agencies were required to prepare a preliminary assessment of the likely impact of the proposal, and self-assess whether the impact was likely to have no or low impacts (with no RIS required). The department/agency was required to contact the OBPR only if the proposal was assessed by the agency itself as having a medium or significant impact.
Under the new arrangements, the OBPR will determine which RISs are required – agencies are required to contact the OBPR to discuss whether a RIS needs to be prepared.
- Provision for the sponsoring Minister to write to the Prime Minister or the Cabinet Secretary, copied to the Treasurer and the Minister for Finance and Deregulation, seeking agreement to the Cabinet or a subcommittee of Cabinet to undertaking initial discussions regarding a regulatory proposal without the requirement for a RIS. The relevant decision making body will have the ability, if it chooses, to direct a department or agency regarding which options it wishes to see analysed in a RIS
This is a new provision.
Under the old arrangements, a RIS was required for all regulatory decisions, including those that narrowed the number of options to be further considered, and there was no provisions for options to be limited by the Cabinet of a sub-committee of Cabinet.
- Provision for RISs for proposals implementing a specific election commitment resulting in regulation to focus on the commitment and the manner in which the commitment should be implemented, and not on the initial decision
This is a new provision.
Under the old RIS arrangements, no differentiation was made between proposals that resulted from specific election commitments and other proposals.
- Removal of the requirement for a RIS to demonstrate the relative merits of options, provided the costs and benefits of each individual option are clearly assessed
This is a new provision.
Under the old arrangements, the RIS should have demonstrated that the benefits of the proposal to the community outweigh the costs and that the preferred option had the greatest net benefit for the community, taking into account all the impacts.
- Require the preparation of a one-page summary of the RIS for decision-makers
This is a new requirement.
- A requirement that departmental secretaries or deputy secretaries, heads of agencies or deputy heads of agencies (depending on the identity of the decision-maker) certify that they agree that the relevant RIS be passed to the OBPR for final assessment
This is a new requirement.
- A requirement that the OBPR maintain a central online public register of all RISs, including those that have been assessed as inadequate and that RISs and the OBPR’s assessments be published on the register as soon as practicable from the date of the regulatory decision
This is a new requirement, in addition to the existing arrangements.
Under the existing (continuing) arrangements, where a regulatory proposal is tabled in Parliament the RIS must be included in the explanatory memorandum (for primary legislation) or the explanatory statement (for legislative instruments). RISs for treaties are to be tabled along with the National Interest Analysis. RISs for other instruments or for quasi-regulation must also be made public.
Contact for information on this page: OBPR contacts page