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Best Practice Regulation Handbook

2. The Government’s regulatory impact analysis requirements

Regulatory Impact Analysis (RIA) is the process of examining the likely impacts of a proposed regulation and a range of alternative options which could meet the government’s policy objectives.

The Australian Government’s RIA requirements are intended to achieve better regulation by supporting:

Central to the Australian Government’s RIA process is the Regulation Impact Statement (RIS). A RIS is a document prepared by the department, agency, statutory authority or board responsible for a regulatory proposal, following consultation with affected parties. It formalises and provides evidence of the key steps taken during the development of the proposal, and includes an assessment of the costs and benefits of each option (although RISs are not required to directly compare options).

The RIS must be presented to decision makers so that the decision is informed by a balanced assessment of the best available information.

After a decision has been made, the RIS needs to be made public. In general terms, this means that the RIS must be posted on the central online RIS register [External website icon] maintained by the Office of Best Practice Regulation (OBPR or ‘the office’) and, where applicable, tabled in parliament with the enabling legislation (attached to the explanatory material for bills or legislative instruments).

The OBPR administers the government’s RIA requirements. The OBPR has a number of roles (Box 1), including: assisting and training agencies to quantify compliance costs, undertake cost-benefit analysis and prepare RISs; monitoring and reporting on compliance with the government’s RIA requirements; and administering the Council of Australian Governments (COAG) guidelines for regulation making by national bodies.1

In the shaded sections of this chapter you will find guidance about working with the OBPR at each step of the RIS process.

 

Box 1 The Office of Best Practice Regulation

The role of the OBPR is to promote the Australian Government’s objective of effective and efficient legislation and regulations. Its functions are to:

  • advise government agencies on appropriate quality control mechanisms for the development of regulatory proposals and the review of existing regulations, including whether Regulation Impact Statements (RISs) are required
  • examine RISs and advise decision makers whether they meet the government’s requirements and provide an adequate level of analysis, including cost-benefit and risk analysis of appropriate quality
  • advise agencies on assessing business compliance costs and maintain the Business Cost Calculator (BCC) as a regulation costing tool
  • manage other regulatory mechanisms, including Post-implementation Reviews and Annual Regulatory Plans.
  • promote the whole-of-government consultation principles and provide clear guidance on best practice consultation with stakeholders to be undertaken as part of the policy development process
  • provide training and guidance to officials to assist them in meeting the assessment requirements to justify regulatory proposals
  • provide technical assistance to officials on cost-benefit analysis and consultation processes
  • report annually on compliance with the government’s requirements for Regulation Impact Statements and consultation, and on regulatory reform developments generally
  • maintain a central online public register [External website icon] of all RISs
  • provide advice to ministerial councils and national standard-setting bodies on Council of Australian Governments guidelines that apply when such bodies make regulations, and
  • monitor regulatory reform developments in the states and territories, and in other countries, in order to assess their relevance to Australia.

2.1      When does a RIS need to be prepared?

A RIS is mandatory for all decisions made by the Australian Government and its agencies that are likely to have a regulatory impact on business or the not-for-profit sector, unless that impact is of a minor or machinery nature and does not substantially alter existing arrangements. This includes amendments to existing regulation and the rolling over of sunsetting regulation.
A RIS must be presented to the decision maker at the time the decision is made.

To whom do the arrangements apply?

The RIS requirements apply to all Australian Government departments, agencies, statutory authorities and boards (referred to collectively as ‘agencies’) that review or make regulations that have an impact on business or the not-for-profit sector, including agencies or boards with administrative or statutory independence. The agency responsible for bringing the proposal to the decision maker is also responsible for ensuring the RIS requirements are met. Agencies are also responsible for preparing and publishing an Annual Regulatory Plan in July each year.

Many non-Cabinet decision makers are governed by their own Acts, and are subject to additional checks and balances such as consultation requirements and appeal provisions. While the RIS requirements apply to all agencies, the OBPR considers these particular governance frameworks in determining how the RIA requirements should apply.

What is regulation?

Regulation is any ‘rule’ endorsed by government where there is an expectation of compliance. It includes primary legislation and legislative instruments (both disallowable and non-disallowable) and international treaties 2. It also comprises other means by which governments influence businesses and the not-for-profit sector to comply but that do not form part of explicit government regulation (for example, industry codes of practice, guidance notes, industry-government agreements and accreditation schemes).

‘Regulation’ does not include grant programs, government procurement of specific goods or services or government agreements unless these processes impose more general regulatory requirements on the organisations receiving funding or providing goods/services.

What is an impact?

An impact is either a positive or negative effect, and covers items that can be readily quantified in monetary terms (e.g. service charges, subsidies, compliance costs) as well as items that cannot be readily quantified in monetary terms (for example, restrictions on competition).

‘Regulation’ does not include grant programs, government procurement of specific goods or services or government agreements unless these processes impose more general regulatory requirements on the organisations receiving funding or providing goods/services.

What is a minor or machinery change?

‘Minor’ changes refer to those changes that do not substantially alter the existing regulatory arrangements for businesses or not-for-profit organisations, such as where there would be a very small initial one-off cost to business and no ongoing costs. ‘Machinery’ changes refer to consequential changes in regulation that are required as a result of a substantive regulatory decision, and for which there is limited discretion available to the decision maker.

COAG processes

Ministerial councils and national standard-setting bodies are required by COAG to conduct regulatory impact analysis for agreements or decisions of a regulatory nature. These requirements are set down in the COAG-endorsed Best Practice Regulation: A Guide for Ministerial Councils and National Standard Setting Bodies (COAG 2007). Officials engaged in developing proposals for these decision making forums should refer to that publication and consult the OBPR early in the policy development process. This Handbook does not apply to COAG processes.

2.2 The RIS process

Not all decision making processes are the same. They differ in duration, urgency, significance of impacts and the number of decision making points. Recognising this, the OBPR is required to interpret how the RIS requirements apply in each case. In essence, it will assess the extent to which the RIS promotes the three broad outcomes of sound analysis, informed decision making and transparency.

The RIS process depicted in figure 1 reflects the development of a proposal with regulatory impacts that will be relevant in the majority of cases. The broad stages in the RIS process are:

The role of the OBPR is to ensure that the RIS meets the requirements of adequacy as set out in Box 3. This requires the OBPR to determine that a range of alternative options has been identified for assessment including, as appropriate, non-regulatory, self-regulatory and co-regulatory options.

The OBPR is not required to assess the merits of individual policy options – its role, once a alternative range of options has been identified, is to assess the rigour with which the impact of each proposal has been assessed.

Notifying the OBPR

It is the agency’s responsibility to contact the OBPR early in the decision making process. This should occur once an administrative decision has been made that regulation may be necessary, but before a decision on whether or not to regulate is made by the government or its delegated officials. There is no provision for the making of decisions for regulation ‘in principle’, subject to the preparation of a RIS.

For all proposals, regardless of the decision maker, initial discussions about a regulatory proposal may be undertaken without the need for a RIS as long as no decision to adopt a specific regulatory approach is made. For regulatory proposals before the Cabinet or a committee of the Cabinet, there is a requirement that the sponsoring minister write to the Prime Minister or Cabinet Secretary, copied to the Treasurer and the Minister for Finance and Deregulation, seeking agreement for the Cabinet to undertake initial discussions without the requirement for a RIS. Essentially, this allows for ‘brain storming’ without a RIS when no final decisions are made.

Figure 1 The RIS process

Figure 1 - The RIS process. Text description below

Text description of Figure 1 The RIS process

Once you become aware that a regulatory proposal you are working on may require a RIS, you should contact the OBPR 3. Engaging early with the OBPR ensures that you will have sufficient time to prepare the RIS, including the requirements for consultation and analysis. Each section of the OBPR deals with a suite of different portfolio areas and your enquiry will be directed to the appropriate area.
In addition, all agencies have a Best Practice Regulation Coordinator and you should make early contact with the relevant area in your agency when considering any new regulations.

Assessing whether a RIS is required

The OBPR is required to assess whether the proposal requires a RIS or whether it is minor or machinery in nature and does not require one. In order to make this assessment, the OBPR will require information in writing from the agency on what the proposed regulation entails and the likely impacts of the proposal. In general terms, the more the proposed regulation impacts on business operations, and the greater the number of businesses or not-for-profit organisations that will be affected, the more likely it is that a RIS will be required.

For multi-stage decision making processes (Box 2) more than one RIS may be required.

Box 2 Multi-staged decision making processes

Occasionally a policy making process may include a number of distinct decision making stages. For example, a proposal presented to a decision maker for initial approval may return at a later stage for a final decision on the detailed implementation. Similarly, where an exposure draft of legislation is required, in most cases a decision (informed by a RIS) on a regulatory option has already been made. Consequently, a two-staged decision making process might occur.

A RIS is required at each significant decision making stage of the process. While the definition of ‘significant’ will vary from case to case, in general a decision making stage is significant when that decision precludes one or more options from further consideration.

Typically, entering into a treaty has multiple decision making stages.

 

The OBPR officer assisting with your enquiry will generally require some information about the proposal before he or she can assess whether or not a RIS will be required. Because the ‘trigger’ for preparing a RIS depends on the nature of the impact of the proposal on business or the not-for-profit sector, the sort of information the office would find useful in its assessment includes:

  • the nature of the proposal
  • the intent of the proposal
  • whether the proposal is likely to impact on business or not-for-profit organisations, either directly or indirectly
  • the nature of the impacts – whether the proposal restricts the activities of certain businesses or whether it acts more indirectly, and
  • the size of the likely impacts– how many businesses will be affected and whether there will be effects on the community more broadly.

At this stage, the information you provide to the OBPR does not need to be particularly detailed; it just needs to allow the OBPR officer to make an accurate assessment of what the likely impacts of the proposal might be.

To assist you in providing this information, a preliminary assessment form is available from the OBPR website (it is not compulsory for you to use this form).

Once the OBPR officer has this information, he or she is able to make an assessment of whether the proposed regulation is likely to have an impact on business or the not-for-profit sector (and will require a RIS); or whether the impact is likely to be of a minor or machinery nature (and will not require a RIS).

The OBPR officer will base his or her assessment largely on the information you provide so the more quickly you can provide accurate information, the faster you will receive the office’s assessment.

The OBPR will notify you in writing of its assessment as well as who will be the contact officer for your proposal. The office will also advise you that you need to inform the OBPR if the proposal changes before the final decision is made. This could affect whether a RIS may be required when an initial assessment has suggested otherwise.

Small Business Advisory Committee

Where a proposal is likely to have significant impacts on small business, the agency should look to consult the Australian Government’s Small Business Advisory Committee (SBAC). The SBAC can help the agency to assess the likely impacts of the proposal on small business in the RIS. Further information about the SBAC is at Appendix D.

If the OBPR determines that you need to prepare a RIS, and that the proposal may have a significant impact on small business, it will provide you with the contact details of the SBAC Secretariat (in the Department of Innovation, Industry, Science and Research).

Preparing the RIS

Preparing a RIS ensures that all relevant information to the decision making process is documented, and that the decision making processes are made explicit and transparent. While there is no set format for a RIS, it should generally contain seven elements, setting out:

  1. the problem or issues that give rise to the need for action
  2. the desired objectives
  3. a range of options (regulatory and non-regulatory, as applicable) that may constitute feasible means for achieving the desired objectives
  4. an assessment of the impact (costs, benefits and, where relevant, levels of risk) of a range of feasible options for consumers, business, government and the community
  5. a consultation statement
  6. a conclusion and recommended option, and
  7. a strategy to implement and review the preferred option.

In addition to these seven elements:

Once the OBPR determines that a RIS will be required, the level of analysis you will need to provide in the RIS will have to be commensurate with the likely impact of the proposal. That is, if the proposal is likely to have significant impacts on business and the community more broadly, you will need to provide a detailed analysis of those impacts; if the impacts are likely to be less significant, then a less detailed analysis will be required.

This requires a judgement about the likely impact of the proposal. Again, this is a subjective question, but the office takes a structured approach in assessing likely impacts. For each proposal the OBPR examines:

  • the nature and magnitude of the proposal (and the problem it is addressing), and
  • the scope of its impact.

It then uses this information to assign each RIS to one of four categories, ‘A’-‘D’ (with ‘A’ representing the proposals with the largest likely impacts).

When assessing the scope of the proposal, the OBPR considers how broadly an impact will affect the community. An increase in the rate of excise on petrol would, for example, be quite broad in its impact, while a curfew on flights into a small airport would be relatively narrow in its impacts.

A complete ban on providing particular goods or services would be regarded as ‘large’ in magnitude, while an example of a less significant ’small’ intervention might be an amendment to regular reporting requirements imposed on business.

Detailed guidance on how to prepare a RIS is included in part 3 of this Handbook. If you have any general queries on what issues should be addressed in the RIS, your OBPR contact officer will be able to provide advice.

The office is also able to provide detailed drafting advice as you prepare your RIS. It is recommended that you contact the OBPR as early as possible in the policy process to allow for the opportunity to provide detailed advice on at least one draft of your RIS.

Assessment of adequacy by the OBPR

The RIS must be certified by the relevant departmental secretary or deputy secretary (or agency head/deputy head) prior to being passed to the OBPR for final assessment. The office is able to provide early drafting advice to officers preparing RISs, but will only formally assess the adequacy of a RIS once it has been certified. If the OBPR formally assesses a RIS as not adequate, the office will provide clear and timely advice to the agency on the reasons for the OBPR’s view.

You will need to provide evidence to the OBPR that your RIS has been certified by the relevant officer. A template form for this purpose is available from the OBPR’s website at RIS Certification.

To be assessed as adequate, a RIS must have a degree of detail and depth of analysis that is commensurate with the magnitude of the problem and the size of the potential impact of the proposal. Subject to this principle, the criteria which will be used by the OBPR to assess whether a RIS contains an adequate level of information and analysis are specified in Box 3.

Box 3 Criteria for assessing the adequacy of a RIS

1. Problem

The RIS should clearly identify the problem(s) that need to be addressed. This part of the analysis must:

  • present evidence on the magnitude (scale and scope) of the problem
  • document relevant existing regulation at all levels of government and demonstrate that it is not adequately addressing the problem
  • identify the relevant risks, if the problem involves risk, and explain why it may be appropriate for the government to act to reduce them, and
  • present a clear case for considering that additional government action may be warranted, taking account of existing regulation and any risk issues, and the potential for market developments to overcome the problem.

2. Objectives

The RIS should explain the objectives, outcomes, goals or targets of government action.

3. Options

The RIS should identify a range of alternative options including, as appropriate, non-regulatory, self-regulatory and co-regulatory options. If only one option (apart from the status quo) is considered feasible, the RIS should provide sound justification for considering only two options. If the Cabinet directs that a limited set of options be considered, or options are limited because the regulation relates to an election commitment, this must be clearly stated.

4. Impact analysis

The RIS should provide an adequate analysis of the costs and benefits of the feasible options, and should:

  • identify the groups in the community likely to be affected by each option and specify significant economic, social and environmental impacts on them
  • assess the costs and benefits of all the options supported by an acceptable level of evidence, where appropriate through a formal cost-benefit analysis, using the status quo as a baseline
  • assess the net impact of each option on the community as a whole, taking into account all costs and benefits
  • assess the impacts on business and the not-for-profit sector, including distributional issues such as the impact on small business, and quantify (using the Business Cost Calculator, Tax Compliance Cost Calculator, or equivalent approved by the OBPR) the effect of each option on business compliance costs
  • recognise the effect of the options on individuals and the cumulative burden on business
  • quantify other significant costs and benefits to an appropriate extent, taking into account the significance of the proposal and its impact on stakeholders
  • analyse the extent to which each option would reduce the relevant risk if an objective of regulation is to reduce risk, and the costs and benefits involved
  • document any relevant international standards and, if the proposed regulation differs from them, identify the implications and justify the variations
  • if the proposed regulation would maintain or establish restrictions on competition, demonstrate that the regulation results in a net benefit and that the government’s objective/s can be achieved only by restricting competition, and
  • provide evidence in support of key assumptions and clearly identify any gaps in data.

5. Consultation

The RIS should:

  • outline the consultation objective
  • describe how consultation was conducted (including when consultation was undertaken, the timeframes given and the methods of consultation)
  • articulate the views of those consulted, including substantial disagreements
  • outline how those views were taken into consideration, and
  • if full consultation was not undertaken, provide a reasonable explanation as to why not.

The consultation process reported in the RIS should conform to the government’s best practice principles and policy on consultation (Appendix C).

6. Conclusion and recommended option

The RIS should clearly state the preferred option,why it is preferred, and indicate the costs and benefits of this option. This statement needs to be supported by the analysis contained in the RIS.

7. Implementation and review

The RIS should provide information on how the preferred option would be implemented, monitored and reviewed. Interactions between the preferred option and existing regulation of the sector should be clearly identified.

 

In addition to the assessment criteria listed in Box 3, the OBPR will consider a number of broader questions when assessing whether your RIS meets the government’s requirements:

  • Is the RIS well written? Does it have a logical structure and is it relatively free from technical jargon? Does it contain any extraneous information?
  • Is the RIS transparent? Does it contain all of the relevant information in analysing the likely impacts of the proposal?
  • Does the RIS clearly outline the problem? Does it describe why government intervention is necessary?
  • Is the RIS a balanced document? Does it appropriately identify any uncertainties in the analysis (both in the preferred and alternative options) and does the strength of the conclusions reflect these uncertainties? Are the views of dissenting parties as well as those who agree with the proposal reflected appropriately?

Most RISs require more than one draft to meet the test of adequacy and as such you should factor more than one iteration into your schedule. You should let your OBPR contact officer know about any relevant deadlines as early as possible as the officer will look to work within your deadlines if at all possible.

The OBPR will provide formal written advice of its assessment, as well as advice for improving the RIS to an adequate standard if the RIS is assessed as inadequate.

One page summary

A one page summary of the RIS must be prepared for decision makers. The OBPR will prepare the summary for proposals considered by the Cabinet or a committee of the Cabinet. For other proposals, the agency will prepare the summary in consultation with the OBPR; the summary will need to be approved by the OBPR as a fair, balanced and accurate summary of the adequate RIS.

The summary will include a brief description of the main points of the RIS, including the impacts of the preferred option, the affected stakeholders and the alternative options. It will also assess the extent to which the preferred option reduces business compliance costs and improves productivity growth. It is not necessary to publish the one page summary with the RIS.

The decision making stage

The government has agreed that, in the absence of exceptional circumstances as agreed by the Prime Minister, a regulatory proposal with likely impacts on business or the not-for-profit sector that are not minor or machinery cannot proceed to the Cabinet or other decision makers unless it has complied with the government’s RIA requirements. The OBPR is required to advise decision makers on the adequacy of the RIS.

Proposals considered by the Cabinet and sub-committees of the Cabinet

A RIS assessed as adequate by the OBPR must be included in documentation circulated to agencies preparing coordination comments. The RIS should be available to decision-makers, preferably attached to the final submission or memorandum. Policy officers should consult the Drafter’s Guide: Preparation of Cabinet Submissions and Memoranda for guidance on completing the regulatory impacts section of the summary of the submission or memorandum.

The OBPR will comment on compliance with the government’s RIS requirements and the adequacy of the RIS in its coordination comments.

The Cabinet Secretariat provides a gate-keeping role to ensure that regulatory proposals coming to the Cabinet and sub-committees of the Cabinet meet the RIS requirements. The Cabinet Secretariat will not circulate final Cabinet submissions or memoranda, or other Cabinet papers, without adequate RISs unless the Prime Minister has deemed that exceptional circumstances apply.

Proposals requiring approval from the Prime Minister

Where approval is sought from the Prime Minister, the RIS and the OBPR’s advice about its adequacy, as well as the summary of the RIS, must accompany the letter to the Prime Minister seeking approval.

Other proposals

Where regulatory action requiring a RIS does not need approval from the Cabinet or the Prime Minister, the RIS, the OBPR’s advice about its adequacy and the one page summary should be included in material presented to the decision maker (minister, board, committee or senior official).

Publication

The OBPR maintains a central online public register [External website icon] of all RISs including those assessed as inadequate. RISs and the OBPR’s assessments of RISs will be published on the register as soon as practicable from the date of the regulatory announcement, in consultation with the agency.

In practice, publication on the OBPR’s central RIS register will generally occur as soon as possible after the decision is publicly announced (for example, by media release). To assist in this process, you should notify the OBPR when this occurs.

The OBPR will obtain your agency’s approval before publishing the RIS, and your agency will have control over the version of the RIS to be published (in consultation with the OBPR). The published RIS should reflect, subject to the exceptions discussed below, the RIS provided to the decision maker.

The OBPR will publish its assessment of the RIS where formally assessed. Where no RIS is prepared, the RIS is not formally assessed, or when the agency does not grant approval for publication, the office will make this clear on the RIS register.

Where a regulation is tabled in parliament, the RIS prepared at the decision making stage must be included in the explanatory memorandum (for primary legislation) or the explanatory statement (for legislative instruments). RISs for treaties will be tabled along with the National Interest Analyses.

There is scope for RISs to be modified after the decision maker’s consideration but prior to publication:

While it may be possible to add further information to give greater context to the decision, as a general principle information on the options considered will not be able to be removed. Any changes to the RIS intended for publication need to be approved by the OBPR.

2.3 Other requirements and information

Exemptions from the RIS requirements

Exemptions from the RIS requirements for exceptional circumstances can only be granted by the Prime Minister in writing. The OBPR must be informed when an exemption is granted and must be provided with a copy of the letter signed by the Prime Minister granting the exemption. If the Prime Minister grants an exemption, the agency will not be deemed as non-compliant with the RIS requirements.

If the decision results in legislation, the fact that an exemption was granted by the Prime Minister should be noted in the explanatory material. A post-implementation review (see below) is required for decisions for which the Prime Minister grants exceptional circumstances; this review is required to commence within one to two years from the date the regulation is implemented.

Post-implementation reviews

Where a proposal proceeds (either through the Cabinet or another decision maker) without an adequate RIS, the resulting regulation must be the subject of a post-implementation review (PIR). The review must commence within one to two years of the regulation being implemented, and will be required regardless of whether or not an exemption from the RIS requirements for exceptional circumstances was granted by the Prime Minister.

While the terms of reference for each review will depend on individual circumstances, the review should generally be similar in scale and scope to what would have been prepared for the decision making stage. Issues that could be examined include:

The key difference between a PIR and an analysis prepared prior to implementation is that, in the case of a review, the agency can report accurately on the implementation of the regulation and its actual impacts. Agencies should gather data from business and other stakeholders on the actual impacts of the measure, including compliance costs.

The PIR should incorporate consultation in line with the Australian Government’s consultation principles (Appendix C). The level of consultation should be commensurate with the significance of the measure under review. Ideally, where appropriate and required, agencies should establish consultative arrangements well before the review is due in order to gather relevant data in preparation for the review.

Agencies are required to list upcoming PIRs (including proposed timelines) in their Annual Regulatory Plans (Appendix B). Where agencies share joint responsibility for a PIR, the review should be listed on each responsible agency’s Annual Regulatory Plan.

As with a RIS, the PIR must be certified by the relevant departmental secretary or deputy secretary (or agency head/deputy head) prior to being passed to the OBPR for final assessment. The review must be sent to the relevant portfolio minister and the Prime Minister, and will be published on the OBPR’s central online RIS register [External website icon]. The OBPR will report on compliance with the PIR requirements in the Best Practice Regulation Report.

For more detailed information about what is involved in completing a post-implementation review, please refer to the Post-Implementation Reviews - Guidance Note or contact the Office of Best Practice Regulation.

Election commitments

RISs are required for election commitments that are likely to have an impact on business or the not-for-profit sector unless the impact is minor or machinery in nature. When a proposal implements a specific election commitment, however, the RIS should focus on the commitment and the manner in which the commitment should be implemented. That is, the RIS does not need to revisit the initial regulatory decision and is not required to examine alternative options to the commitment. This should be made clear in the RIS.

RIS requirements for treaties

Treaties that are likely to involve domestic regulation that will impact on business or the not- for-profit sector require a RIS unless the resulting regulation is of a minor or machinery nature.

When approval is sought for the formal commencement of negotiations, the RIS should accompany the Cabinet submission or letter to the Prime Minister, Minister for Foreign Affairs or other relevant ministers. At this early stage, the RIS should focus on the nature of the problem being addressed, the objectives of the proposed treaty and a preliminary discussion of options and their respective costs, benefits and levels of risk. The RIS for entry into negotiations is not published.

When endorsement is sought to sign the final text of a treaty, the RIS would need to include a more detailed analysis that assesses the likely impacts on different groups within the Australian community, including business, consumers and governments.

As part of the transparency stage, the RIS for the treaty is tabled or made public with the final text of the treaty and National Interest Analysis.

A further RIS is not required for domestic legislative changes that are required to implement a treaty if the terms of the treaty determine the action required to implement it. However, a RIS may be required for the domestic legislation if there is any discretion about the nature of the action to be taken to implement the treaty.

Details about RISs and treaties are also included in the Department of Foreign Affairs and Trade document, Signed, Sealed and Delivered – Treaties and Treaty Making: An Officials’ Handbook.

The OBPR recognises that there are a large number of different treaty negotiation processes. The OBPR will take the particular circumstances of each treaty process into account, while still observing the principles of sound analysis, informed decision making and transparency.

You should contact the office as early as possible to discuss the application of the RIA requirements to your treaty proposal.

Trade Impact Assessment

Where a proposed regulation has a direct bearing on export performance, a Trade Impact Assessment should be incorporated into the RIS. The assessment should summarise the impact of regulatory options and proposals on exporters and importers and assess the overall impact on Australia’s international trade.

Consequences of non-compliance

The government has agreed that no regulatory proposal should go to the Cabinet or any other decision maker unless it has complied with its RIS requirements, as advised by the OBPR.

Where the OBPR determines that a regulation may have been introduced or amended without a RIS, it will in the first instance contact the agency to obtain additional information. Following consultation with the agency, the OBPR will determine that either:

As part of its role to report on compliance with the Best Practice Regulation requirements, twice a year the OBPR will ask each agency to prepare a list of all regulation made during the previous six months. The office will review all regulation made to ensure that where a RIS was required, these requirements have been met.

In addition to asking agencies about their regulatory activity, the OBPR also monitors regulations tabled in parliament and news reports, media releases and other sources for indications that a regulatory decision has been made. Where the office determines that a regulation may have been introduced or amended without the appropriate level of analysis being undertaken, it will in the first instance contact the agency to obtain additional information.

In the event that the OBPR confirms that a regulatory decision was made without the appropriate level of supporting analysis, the office will report this on the central RIS register [External website icon], and in its annual Best Practice Regulation Report.

The OBPR’s ongoing engagement with agencies

The office conducts training programs to assist agencies to prepare RISs, use the Business Cost Calculator (BCC) to assess compliance costs, and fulfil other regulatory review and reform obligations. The OBPR also provides technical assistance and training to policy officers on cost-benefit analysis and risk analysis.

More broadly, the OBPR aims to help agencies comply with the RIA requirements by promoting awareness of the requirements, and by seeking to better understand the policy-making environment faced by individual agencies. Best Practice Regulation Coordinators located in each agency can assist by acting as a contact point for further information on the RIS process.

 

Box 4 Regulation Impact Statements – Frequently Asked Questions

Are RISs required for COAG or ministerial council decisions?

Yes – but there is a separate set of requirements for decisions made by COAG or ministerial councils. These are summarised in the COAG publication Best Practice Regulation: a Guide for Ministerial Councils and National Standard Setting Bodies..

Are RISs only required for primary legislation or legislative instruments?

No – RISs are also required for international treaties and for other requirements that governments impose on business or the not-for-profit sector but that do not form part of explicit government regulation (such as industry codes of practice, guidance notes, industry-government agreements and accreditation schemes).

Is a RIS required if someone other than the Cabinet is making the decision?

Yes – RISs are required for all decision makers, including committees of the Cabinet, ministers, delegated officials or heads/boards of statutory agencies.

Is it true that RISs are not required for election commitments?

No – RIS requirements apply to election commitments that involve regulation. Where a proposal implements a specific election commitment, the RIS should focus on the commitment and its implementation, and not on the initial regulatory decision.

Are RISs required for Budget proposals?

Yes – RIS requirements apply to all regulatory decisions whether or not they are made as part of the Budget process.

Is a RIS required for new regulations only and not for amendments to regulations?

No – RIS requirements apply to both new and amended regulations, including the rolling over of sunsetted regulations.

Is it true that RISs only have to consider the impacts on business or the not-for-profit sector?

No – once a proposal triggers the RIS requirements, the RIS must consider the impacts on all relevant groups, including consumers, governments and the broader community.

Is it true that a RIS is only required if the regulation imposes compliance costs?

No – a RIS is required if a regulatory decision is likely to impact on business or the not-for-profit sector. This impact includes items that can be readily quantified in monetary terms (like compliance costs, service charges or subsidies) as well as items that cannot be readily quantified in monetary terms (for example the costs of pollution).

Is a RIS required even when the regulation will provide a benefit to business or the not-for-profit sector?

Yes – a RIS is required for regulatory decisions likely to have any impact (whether positive or negative) on business or the not-for-profit sector unless the impact is of a minor or machinery nature.

Is a RIS only required at the policy implementation stage?

No – RIS requirements apply to all decisions in a policy process, whether they are broader decisions, or decisions on the detailed implementation of the policy.

Is a RIS only required for tabling?

No – a RIS is required to be presented to decision makers as they make their decision.

What role does the Small Business Advisory Committee (SBAC) have in the RIS process?

The SBAC’s role is limited to those RISs that are likely to have a significant impact on small business. The SBAC will assist the agency in assessing the impacts of the proposal on small business. If a regulatory proposal being developed by your agency is likely to be particularly burdensome for small business, you should contact the SBAC Secretariat at an early stage.

Does a RIS need to examine non-regulatory options?

Yes – if non-regulatory options can feasibly address the government’s objectives they should be included in the RIS.

If the benefits are difficult to value does the RIS still need to have a cost-benefit analysis?

Yes – even though it can be very difficult to place a monetary value on some factors, including environmental and social impacts. The cost-benefit analysis should recognise this and include a qualitative discussion of these impacts so that they can be compared with other impacts that can be more easily quantified.

Does the RIS need to demonstrate that the preferred option has the greatest net benefit?

No – the RIS must describe the impacts of all the feasible options and identify the preferred option but, unless the option restricts competition, it is not necessary to demonstrate that the preferred option has the greatest net benefit to the community.

Do the RIS requirements apply to changes in taxation?

Yes – a RIS is required for all regulatory decisions, including changes in taxation, likely to have any impact (whether positive or negative) on business or the not-for-profit sector unless the impact is of a minor or machinery nature or, in the case of taxation, purely revenue in nature.

1. See COAG (2007), Best Practice Regulation: a Guide for Ministerial Councils and National Standard Setting Bodies, available from the OBPR website (www.finance.gov.au/obpr).

2 The term ‘treaties’ includes treaties, conventions, protocols, covenants, charters, agreements, pacts and exchanges of letters.

3 You can contact the OBPR by phone on (02) 6215 1955, or by email at helpdesk@obpr.gov.au.

4 Online at www.finance.gov.au/financial-framework/. Advice on cost recovery issues can be directed to the Financial Framework Policy Branch, Department of Finance and Deregulation (Finframework@finance.gov.au).

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Last Modified: 13 March, 2012