This guidance will assist Commonwealth entities that perform regulatory functions, including both standalone regulators and those located within policy departments.
This guidance does not apply where:
Officials should consider the information in this guidance and determine the applicability of the principles as part of their performance reporting under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
What are regulatory functions?
Regulatory functions may include administering (for example, providing approvals, making operational rules about, handling complaints on), monitoring, promoting compliance with and enforcing regulation.
The Australian Government Guide to Regulatory Impact Analysis defines regulation as, any rule endorsed by government where there is an expectation of compliance.
Regulatory functions are exercised across a range of governance arrangements and structures. They may be located within Commonwealth entities not publicly identifiable in their own right as a regulator, and may also hold responsibility for other, non-regulatory functions.
This guidance will use the term regulator to refer to identifiable regulators and to entities with regulatory functions.
Best Practice Principles
Principles of regulator best practice
Regulators are required to report against three principles of regulator best practice through their corporate plans and annual reports.
Continuous improvement and building trust: regulators adopt a whole-of-system perspective, continuously improving their performance, capability and culture to build trust and confidence in Australia’s regulatory settings.
Risk based and data driven: regulators manage risks proportionately and maintain essential safeguards while minimising regulatory burden, and leveraging data and digital technology to support those they regulate to comply and grow.
Collaboration and engagement: regulators are transparent and responsive communicators, implementing regulations in a modern and collaborative way.
How to use the principles
Regulators should demonstrate in their performance reporting how they are meeting the Government’s expectations as set out in this guidance.
Regulation is not a one-size-fits-all activity, and regulatory functions, resourcing and capabilities vary across Commonwealth entities. Regulators should draw on the principles to develop tailored performance monitoring and reporting processes and performance measures in consultation with their stakeholders that are appropriately scaled to their role, regulatory posture, specific legislative objectives, functions and environment.
Regulators are encouraged to develop performance measures to allow reporting against each principle, but with the flexibility to determine the extent to which the examples of best practice under each principle are relevant to their own performance.
Regulators are encouraged to adopt outcomes focussed performance measures for reporting, supplemented with case studies and user stories where appropriate. This does not preclude a regulator from including input or activity-based indicators if relevant to performance. However, these should be used in combination with outcome indicators to provide a cohesive picture of performance. Where reasonably practicable, a mix of qualitative and quantitative performance measures should be used.
Performance reporting as part of PGPA Act requirements
The Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) set out the Government’s governance and accountability arrangements for Commonwealth entities.
Where do I report performance?
Regulator performance reporting should be incorporated into an entity’s reporting processes (with a focus on the corporate plan and annual report – including annual performance statement) as required under the PGPA Act and PGPA Rule.
This supports transparency and accountability of regulator performance by requiring the inclusion of this information in a consistent location for all regulators, and in reports subject to the scrutiny of the Parliament and the Auditor‑General. It also reduces duplication in regulator performance reporting.
To support entities with the transition in performance reporting, the 2021-22 and 2022-23 financial years are transitional. During this time, entities may wish to fully adopt the reporting requirements outlined in this guidance or continue existing processes, for example, to prepare a Regulator Performance Framework report as a supplement to content in corporate plans and annual reports. The Accountable Authority for each entity should consider how it could most appropriately account for, and report against, its performance for this transitional period before the requirements come into effect.
Transition to reporting approach
Entities may use the transitional period to decide how to most appropriately embed the guidance in undertaking and reporting on performance for their organisation. Commencing 1 July 2023, it is expected that:
- for corporate plans prepared for the 2023-24 reporting period, entities with regulatory functions should include performance information in respect to their regulatory functions, with reference to the best practice principles.
- for annual reports prepared for 2023-24 reporting period, entities should reconcile performance outcomes in their Annual Performance Statements, with reference to the best practice principles.
While regulators are often operationally independent of government, this does not mean independent of expectations or guidance about how they fulfil their statutory roles. Commonwealth regulators are typically accountable to the Parliament, including through Senate Estimates and Australian National Audit Office scrutiny.
The Executive Government will also set out its guidance through Ministerial Statements of Expectations. These Statements are issued by the responsible Minister to a regulator or an entity with regulatory functions, to provide greater clarity about government policies and objectives relevant to the regulator’s statutory objectives and how it conducts its operations. The regulator responds to a Ministerial Statement of Expectations with a Regulator Statement of Intent that, in turn, identifies how it will deliver on the Government’s expectations.
Ministerial Statements of Expectations should be issued or refreshed every two years for all Commonwealth entities with regulatory functions, or earlier if there is a change in Minister, change in regulator leadership, or significant change in Commonwealth policy. As best practice, Ministers should work closely with their Secretaries and heads of Regulators in developing these Statements as part of an ongoing productive and close partnership. Regulators should integrate these Statements into performance reporting as required under the PGPA Act and as part of a corporate plan and/or annual report. These Statements should be made publicly available on regulator websites and on transparency.gov.au as part of a corporate plan and/or annual report. Further advice on developing Ministerial Statements of Expectations and Regulator Statements of Intent are provided in the guidance note.
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