Regulation

Upcoming changes to the Australian Government’s Regulatory Impact Analysis settings

The Government has announced enhancements to the Australian Government’s Regulatory Impact Analysis (RIA) settings.

As the body responsible for RIA, the Office of Best Practice Regulation (OBPR) has been tasked with the implementation, administration, and evaluation of these measures.

The changes, which aim to strengthen the RIA framework and ensure high-quality analysis underpins the major decisions of Government, include:

Replacing the existing document categories (Short Form, Standard Form, Long Form and Interim Regulation Impact Statement (RIS)) with a single category of document, which can vary in length and level of detail depending on the magnitude of the problem and the impacts of the proposal.
Introducing a new fourth tier in quality assessment ratings and change the quality assessment terminology from ‘non-compliant’, ‘compliant’ and ‘best practice’ to ‘insufficient’, ‘fit for purpose’, ‘good practice’, and ‘exemplary practice’.
Continuing to focus on eliminating unnecessary regulatory burden, but not at the expense of understanding broader economic or social impacts of new proposals. The requirement for the OBPR to specifically agree regulatory (‘red tape’) costs with agencies will be removed. Rather, regulatory costs would be assessed as one aspect of the OBPR’s existing focus on the broader costs and benefits of proposed options.
Retaining the Prime Minister’s ability to exempt proposals from requiring impact analysis in a limited number of cases, including truly urgent and unforeseen events, but enable a request for some analysis to be undertaken before implementation, to establish a baseline for future evaluation.
Requiring the OBPR to assess Independent Reviews – which can substitute for a RIS – for relevance to the recommended option(s).

These changes will come into effect in March 2020, with grandfathering provisions for RIA processes partially completed at that transition point.

Further advice and guidance will be made available in the coming months.

Please note, these changes will have no impact on COAG RIA requirements.

Regulation is essential for the proper functioning of society and the economy. Regulation includes any laws or other government-endorsed ‘rules’ where there is an expectation of compliance. In Australia, regulation is made at the federal level as well as by the states and territories, in the form of legislation and subordinate legislation and at a local government level as regulations and by-laws.

The Australian Government and Council of Australian Governments (COAG) are committed to improving the quality of regulation, including minimising the burden of regulation on businesses, community organisations and individuals.

Australia is recognised internationally for its regulation impact assessment arrangements.

The 2014 Australian Government Guide to Regulation provides high-level principles for policy-makers and outlines the requirements and process for developing a Regulation Impact Statement (RIS).
The Council of Australian Governments’ (COAG) Best Practice Regulation: A Guide for Ministerial Councils and National Standard Setting Bodies outlines the principles for best practice regulation agreed by COAG, and provides guidance to ministerial councils and national standard-setting bodies on undertaking regulatory impact analysis and preparing a COAG Regulation Impact Statement (COAG RIS).

A common misconception is that a RIS is only required for legislation. A RIS is required for all measures that seek to impose mandatory obligations on business and the community, including codes and advisory instruments for which there is a reasonable expectation of widespread compliance. The level of analysis required in a RIS depends on the significance of the proposed change.

The Office of Best Practice Regulation (OBPR) administers the Australian Government and COAG RIS requirements. It comments on the quality of analysis in RISs and conducts training and provides guidance to assist agencies in preparing RISs. The OBPR also reports on compliance with the Australian Government’s and COAG RIS requirements.