Glossary of terms for the Charging Framework


Accountable authority

If the Commonwealth entity is:

then the accountable authority of the entity is:

a Department of State

the Secretary of the Department.

a Parliamentary Department

the Secretary of the Department.

a listed entity

the person or group of persons prescribed by an Act or the rules to be the accountable authority of the entity.

a body corporate

the governing body of the entity, unless otherwise prescribed by an Act or the rules.

Activity-based costing model (ABC)

allocates indirect costs to cost objects using activity-based cost drivers, such as the consumption of legal support resources or external technical assessments.


within the context of the Charging Framework, the acceptance of advertising involves any form of paid media placement, including print, radio, digital, television or out-of-home advertising from non-government entities.

Agency Advisory Unit (AAU)

a section within Department of Finance responsible for advising entities on a portfolio level on their resource management practices (including BPOR, PBS, financial estimates, financial reporting, and policy advice on relevant Cabinet Submissions and New Policy Proposals).

Decisions of the Australian Government for the purposes of this guidance, means decisions of the Cabinet, or the Prime Minister, or the Finance Minister (Minor submissions only)

Australian Government Charging Framework

(Charging Framework) - consists of the Australian Government Charging Policy, released in 2015, and the Cost Recovery Policy released in 2014, which incorporates overseeing charging of regulatory and non-regulatory government activities. 

Australian Government Charging Policy

Australian Government Policy released in 2015, previously known as the Australian Government Charging Framework. It sets out the requirements and better practice for non-regulatory charging activities.

Australian Government Cost Recovery Policy

Australian Government Policy released in 2014, previously known as the Cost Recovery Guidelines (CRG). It sets out the requirements and better practice for regulatory charging activities under which Commonwealth entities design, implement and review regulatory activities.

Budget Process Operation Rules (BPORs)

standing rules endorsed by the Cabinet that outline the major administrative and operational arrangements for managing the Australian Government Budget (the Budget) and its related processes.

Business cycle of the activity/activity lifecycle

a reasonable period of time over which charging activities are being delivered, used to balance out expenses (costs) and revenue (charges). Typical activity lifecycles are annual, however some activities may have longer cycles (for example, licence issuing/reissuing in 3-yearly periods with peak of activities at the beginning/end of the cycle and troughs in between peaks).

Charging lifecycle

for the purpose of this guidance, four stages of charging process – from the policy design, through development of charging model, implementation and ongoing monitoring and evaluation.

Charging risk assessment (CRA)

a process of assessing risk associated with undertaking a charging activity; or a tool used to identify areas of implementation risk and informs the cost recovery aspects of a risk engagement strategy adopted by a government entity.

Commercial charge

a type of government charge used to supply government goods or services to the non-government sector (in an actual or potential market). A commercial charge may be less than, more than or equal to the cost of goods or services. There is usually a degree of user discretion (that is, it is voluntary) about whether the good or service is consumed. 

Commonwealth entity

A Department of State or:

a parliamentary department or

a listed entity or

a body corporate that is:

established by a law of the Commonwealth or

established under a law of the Commonwealth (other than a Commonwealth company) and is prescribed by an Act or the PGPA Rule to be a Commonwealth entity.

The definition of Commonwealth entities in the PGPA Act does not cover:

bodies corporate that are established under, but not by, a law of the Commonwealth (such as Commonwealth companies)

the High Court and the Future Fund Board of Guardians.

Cost object

a specific process, output or activity to which costs are assigned.

Cost padding

occurs where an entity unreasonably increases its costs above the efficient costs for a specific cost object.

Cost recovered activity

the provision of government regulatory activities, including goods, services or regulation, or a combination of them, to the non-government sector on a full or partial cost recovery basis.

Cost recovery

involves Commonwealth entities (on behalf of the Australian Government) charging the non-government sector some or all of the efficient costs of a specific regulatory government activity.

Cost recovery fee

a type of government cost recovery (regulatory) charge used when a good or service or regulation is provided directly to a specific individual or organisation.

Cost recovery implementation statement (CRIS)

a tool for documenting cost recovery design and operation and reporting on a cost recovered activity. A CRIS must be prepared for each cost recovered activity conducted by a government entity in line with the Cost Recovery Policy minimum requirements for CRIS.

Cost recovery levy a type of government cost recovery (regulatory) charge used when goods and services, but primarily regulation, are provided to a group of individuals or organisations (for example, an industry sector) rather than to a specific individual or organisation. A cost recovery levy is legally a taxation charge and needs to be imposed in a separate taxation Act to comply with constitutional requirements. A cost recovery levy differs from general taxation, as it is earmarked to fund activities that relate to the group being charged.
Cost recovery model a model assisting in costing combination of resources and processes involved in a cost recovered activity in order to achieve government policy outcomes in an efficient and effective manner, in which the costs of the activity are aligned with cost recovery charges.

Department of State

are the main non-Corporate Commonwealth entities that reflect the structure of government. 

  • includes any body (except a body corporate), person, group of persons or organisation that is prescribed by an Act or the rules in relation to a specified Department of State; and
  • excludes any part of a Department of State that is a listed entity.

Direct costs

costs that can be traced to a cost object (for example, an output or process of the activity) with a high degree of accuracy.

Effectiveness of cost recovery

relates to whether the cost recovery model and related processes reliably measure and allocate costs to cost recovery charges.

Efficiency and effectiveness of government activity

making the proper use of available resources to achieve government policy outcomes.

Efficiency of cost recovery

relates to the proportionality between the costs of administering cost recovery and potential charges for or revenue from the activity.

Efficient costs

the minimum costs necessary to provide the activity while achieving the policy objectives and legislative functions of the Government.

Enabling legislation for a government entity

an Act or legislative instrument that establishes that government entity.


the Department of Finance.

Finance Minister

the Minister who administers the PGPA Act.

Financial statements

statements prepared by government entities as required under the PGPA Act, which include reportable financials that relate to charging/cost recovered activities/arrangements.

Full cost recovery involves Commonwealth entity charging the non-government sector all of the efficient costs of a specific regulatory activity.

General taxation

a type of government charge, usually defined as ‘a compulsory exaction of money by a public authority for public purposes, enforceable by law’. This is not a cost recovery charge, as the activities funded through general taxation revenue do not have to relate to the individuals or organisations being charged. General taxation charges are imposed in separate taxation Acts in accordance with constitutional requirements.

Gold plating overinvestment in resources involved in the provision of cost recovered activity (for example, installing capital assets that are unnecessarily large or sophisticated).

Government entities

for purpose of the charging framework guidance, all levels of government including: Commonwealth, state, territory, local or foreign governments that may have input into charging activity.

Government Business Enterprise (GBE) is a Commonwealth entity or Commonwealth company that is prescribed by the rules.

Government policy order

an order made by the Finance Minister under the PGPA Act that specifies a policy of the Australian Government that is to apply in relation to one or more corporate Commonwealth entities (section 22(1)) or wholly-owned Commonwealth companies (section 93(1)).

Government Financial Statistics (GFS) Statistics about finances of the general government and public non-financial corporations sectors for the various levels of government in Australia.
Indexation the process by which the forward cost estimates are updated to reflect the forecast economic conditions of the year in which costs are expected to occur.

Indirect costs

costs that cannot be easily linked to a cost object, or where the costs of doing so outweigh the benefits. Indirect costs are apportioned to a cost object using an appropriate cost driver.

Internal Government Charging (IGC)

charging arrangement between Commonwealth entities that involving payments of cash, cash equivalent or kind, where the value in cash terms is agreed or set by Government.

Legislative authority

authority required from government/Cabinet to enable charging activities consistent with the AGCF. A bill that has passed through both chambers of parliament and has received Royal Assent.


relates to the financial value of the output of an activity for a stakeholder. Materially will vary between users, relative to benchmarks and for the same output but on different occasions. Materiality should be considered from the users, the government entity and the Government perspective.

Office of Best Practice Regulation (OBPR)

administers the Government regulatory impact analysis requirements.

Office of Impact Analysis (OIA)

administers the Australian Government regulatory impact analysis requirements (replaced the Office of Best Practices Regulation). OIA assists policymakers consider how proposals affect businesses, individuals and community organisations, as well as broader economic and other impacts. 

Official of a Commonwealth entity is a person who is in, or forms part of, the entity.

Operational changes to a cost recovered activity

changes to the day-to-day management of the activity within the boundaries of existing policy approval from the government. Typically, these changes may be authorised by accountable authorities of government entities or responsible Ministers, but may require amendments to the relevant legislation.

Partial cost recovery

charging the non-government sector less than all of the efficient costs of a specific government activity.

Performance measures (for a cost recovered activity)

may include outcome, output and input measures that form part of the entity’s performance framework:

  • Outcome measures assess the extent to which the cost recovered activity is meeting government policy outcomes.
  • Output measures show the extent to which the activity’s operational targets or milestones have been achieved.
  • Input measures assess the resources required for the cost recovered activity.

Policy authority/ approval

a broad term for the type of approval/authority required to permit something to happen. It may come from a decision of Government or from those delegated to act for the Government.  It is required prior to the commencement, significant variation or cessation of any charging consistent with the AGCF. Policy approval will provide specified parties with authority to undertake certain activities and limit other activities (for example, “must come back to Government for a price change”).

Policy changes to a cost recovered activity

involve variations in the activity that are beyond the boundaries of existing policy approval from the government. These changes are likely to require a new policy approval from the government and amendments to the relevant legislation.

Portfolio charging review (PCR)

the Charging Framework requires a periodic review, at least every 5 years, of all existing and potential charging activities conducted by Departments of State within their respective portfolios, in accordance with the schedule of portfolio charging reviews.

Policy Impact Analysis (PIA) a Budget Process Operational Rules (BPORs) required process to analyse New Policy Proposals (NPP) undertaken in consultation with the Office of Impact Analysis (OIA).


in relation to the use or management of public resources, means efficient, effective, economical and ethical.

Public Governance, Performance and Accountability Act 2013 (PGPA Act)

an Act about the governance, performance and accountability of, and the use and management of public resources by, the Commonwealth, Commonwealth entities and Commonwealth companies, and for related purpose.

PGPA (Charging for Regulatory Activities) Order 2017 an government policy order with charging implications for certain corporate Commonwealth entities.

Public resources

relevant money, relevant property, or appropriations.

Regulation impact analysis (RIA)

as defined in the Australian Government Guide to Regulation. Determines whether a Regulation Impact Statement (RIS) is required.

Regulatory charge

a statutory government charge imposed for those activities where the government is seeking to control or influence behaviour, manage risk and/or protect the community. Legislation is always required for these charging activities.

Resource charge involves charging for the provision of specific rights, privileges, or access to public resources, infrastructure and/or equipment. Some of these activities may have a regulatory component or require legislation, others may involve commercial contracts.
Responsible Commonwealth entity the entity, and its accountable authority that are responsible for administering a particular government activity.
Responsible Minister the Minister or Ministers with responsibility for a particular government activity, entity, or portfolio.


relates to the level of interest in the activity or the charge for the activity from government stakeholders, non-government stakeholders, the media and the Members of Parliament. These considerations include:

  • how the charge impacts users
  • the nature of the activity or charge/s
  • the nature of the industry
  • existing government charges faced by industry
  • timeframes for implementation
  • degree of consultation
  • legislative requirements.

within the context of the Charging Framework, the acceptance of sponsorship involves any paid contribution by a non-government organisation to a government entity to support government activities, in return for negotiated benefits, such as co-branding or promotion.

Traditional based costing model typically allocates indirect costs to cost objects using volume-based cost drivers, such as floor space or average staffing levels.

Did you find this content useful?