Post-implementation reviews Guidance Note

RegulationDeveloping a Regulation Impact StatementEngaging with Stakeholders under the Regulator Performance Framework
Monday, 01 February 2016
Publication author(s):
Office of Best Practice Regulation
Publication abstract:

Australian Government agencies must undertake a post-implementation review (PIR) for all regulatory changes that have major impacts on the economy. PIRs must also be prepared when regulation has been introduced, removed, or significantly changed without a regulation impact statement (RIS). This may be because an adequate RIS was not prepared for the final decision, or because the Prime Minister granted an exemption from the RIS requirements. This guidance note explains the purpose, process and content requirements for a PIR.

Contents

Summary

Australian Government agencies need to undertake a post-implementation review (PIR) for all regulatory changes that have major impacts on the economy. PIRs also need to be prepared when regulation has been introduced, removed, or significantly changed without a regulation impact statement (RIS). This may be because a compliant RIS was not prepared for the final decision, or because the Prime Minister granted an exemption from the RIS requirements. A PIR may also be required where the analysis presented to policy makers in the form of a RIS at the final decision point[1] sufficiently diverges from best practice. This requirement applies to both Standard and Long Form RISs.  

A PIR should outline the original problem and the Government’s objectives, provide evidence about impacts of the regulation, analyse the impacts, present findings from consultations, and make a conclusion. The impact analysis for a PIR should include information about the actual impacts of the regulation, including the regulatory costs. Stakeholder consultation is essential and is a key part of a PIR.

A PIR’s conclusion should provide an assessment, based on the available evidence, of whether the regulation remains appropriate and of how effective and efficient it has been in meeting its original objectives.

What has changed from the previous guidance note?

There are two changes to the requirements outlined in this guidance note that have come into effect:

  1. The circumstances in which a PIR is required have been expanded. [Effective 1 February 2016]

A PIR is now required to commence within two years if the Assistant Minister for Productivity, assisted by the advice of OBPR, together with the relevant portfolio Minister, agree that the analysis included in a RIS[1] that is presented to policy makers at the final decision point sufficiently diverges from best practice.

  1. An exemption from the PIR requirements can now be obtained. [Effective December 2015]

This is only applicable where the relevant regulation which has previously been implemented is no longer in force or no longer government policy. Approval for this exemption needs to be obtained in writing from the Prime Minister.

What is the purpose of a post‑implementation review?

The purpose of a PIR is to assess whether the regulation remains appropriate, and how effective and efficient it has been in meeting its objectives. The PIR requirements apply to all agencies that review or make regulations that have an impact on businesses, community organisations or individuals, including those agencies with administrative or statutory independence.[2]

The Australian Government Guide to Regulation seeks to ensure that regulation has efficient outcomes and does not create an unnecessary burden of red tape for those affected by it. For this reason, if a regulatory change was not subject to scrutiny under the regulation impact analysis process at the pre-decision stage, it is necessary that it be subject to a PIR. It is also important for all regulatory decisions to be assessed within the same framework to ensure the ongoing quality of regulation.

Regular reviews are useful for evaluating the ongoing performance of regulation, and agencies are encouraged to review regulation following implementation even if a PIR is not required.

Do you need to prepare a post-implementation review?

It is a requirement to prepare a PIR if any of the following criteria apply:

  • The OBPR has assessed the proposal as having a substantial or widespread economic impact.
    • For regulations that have been subject to a Long Form RIS, where the policy was expected to have a substantial or widespread impact on the economy, a PIR is required to be completed within five years.
  • A compliant RIS[3] for the regulatory change was not prepared for the final decision and the change was neither minor nor machinery in nature.[4]
  • The Assistant Minister for Productivity, assisted by the advice of OBPR, together with the relevant Minister agree that the regulatory analysis presented to policy makers at the final decision point sufficiently diverges from best practice. This requirement applies to both Standard and Long Form RISs.

An agency can be exempted from the obligation to undertake a PIR where a previously implemented regulation is no longer in force (e.g. regulation has been removed or has expired) or the previously implemented regulation is no longer government policy. Evidence that a regulation is no longer government policy could be in the form of a Cabinet decision, a Ministerial decision or determination, or Federal Executive Council decision that would demonstrate the intent to remove the regulation, together with evidence that substantial progress has been made to implement the decision, for example, through preparation and passage of legislation.

Where an exemption from undertaking a PIR is being sought, the relevant Minister writes to the Prime Minister seeking an exemption from the requirement to complete a PIR, following consultation with OBPR.

The scenarios included in Appendix 1 to this Guide provide further guidance on how the PIR requirements can be fulfilled.

The regulation is already being reviewed for another process. Do I need to do a separate PIR?

In some cases, regulation is subject to a statutory review provision written into the legislation. Alternatively, the policy may be subject to another comprehensive and rigorous review, close to the time when the PIR is required.

You can draw on the work done for other reviews to meet some or all of the PIR requirements. In some cases, the other review can be assessed as meeting the PIR requirements without needing further work. However, the other review will still be assessed against the criteria for a PIR as set out in the Guide to Regulation.

If you want OBPR to assess an alternative review as part of or in lieu of a stand-alone PIR, you should advise the office. Because PIRs need to be certified by the agency head or deputy head, your request should be accompanied by an appropriate approval.

Process for conducting a PIR

Start working on your PIR as soon as your regulation is implemented. Do not wait until just before the PIR deadline to start the work. You are responsible for gathering necessary data and consulting stakeholders during and after the implementation of the regulation. Start gathering data from the date the regulation is implemented. Draft the PIR in consultation with your portfolio Regulatory Reform Unit, then provide it to OBPR for assessment. The office will advise you of any areas in the PIR that could be improved according to the best practice regulation principles. Once completed and assessed as adequate by OBPR, the PIR needs to be sent to the relevant portfolio minister and the Prime Minister. The PIR will then be published on the OBPR’s website. The PIR process is complete, and your PIR is compliant with the Government’s PIR requirements, only after it has been published on the OBPR’s website.

Some judgement is required in deciding when to start writing the PIR. You need to balance the requirement to gather sufficient data to be able to make robust conclusions against the need to identify and address inappropriate, non-performing or inefficient regulation through the review in a timely fashion. OBPR can provide technical assistance to help you determine whether or not you have enough information for an informative impact analysis. As a guideline, preparing the PIR report should take around three to six months once the relevant data and information has been gathered.

Consultation with stakeholders is an essential source of information for the PIR. The timing guidelines do not prevent you from establishing strong stakeholder consultation arrangements at the earliest opportunity. Ideally, those arrangements would be in place before the implementation of the regulation in most cases.

When does the post-implementation review need to be completed?

The timeframe for completion of the PIR depends on the reasons for its trigger.

  1. For regulations assessed in a RIS by OBPR as having a substantial or widespread impact on the Australian economy, a PIR needs to be completed within five years following the implementation of the regulation (unless subject to one of the following triggers).
  2. Where a compliant RIS for the regulatory change was not prepared for the final decision, a PIR needs to be completed within two years of the regulation being implemented.
  3. Where the Assistant Minister for Productivity, assisted by the advice of OBPR and in agreement with the relevant portfolio Minister, has assessed a Standard or Long Form RIS as sufficiently diverging from best practice, a PIR needs to commence within two years of the regulations being implemented. Assisted by the advice of the OBPR, the Assistant Minister for Productivity and the relevant portfolio Minister will determine an appropriate completion date for this PIR.
    • As a general rule, the PIR would need to be completed within two years of implementation of the regulation.

Overall, the PIR completion deadlines include the time required by OBPR to assess the document for adequacy. You are responsible for allowing enough time to incorporate any changes suggested by the OBPR during the PIR process. The OBPR will endeavour to respond on first drafts of PIRs within ten business days. When setting milestones for the PIR in your forward work program, you should consider how the PIR might inform future decisions.

OBPR maintains a public register of outstanding PIRs and determines whether or not agencies are complying with best practice. Regular liaison with agencies assists the OBPR in accurately representing the status of PIRs, including their timeframes for completion.

Figure 1 provides an indicative guide to these requirements.

Figure 1: PIR timing requirements

OBPR Final Assessment

PIR Required

To be completed:

RIS assessed as adequate

Substantial or widespread impact on the economy (Long Form RIS)

Sufficiently diverges from best practice

As agreed between the Assistant Minister for Productivity and the relevant portfolio Minister

Adheres to best practice

Within 5 years

Measurable but contained impact on the economy (Standard Form RIS)

Sufficiently diverges from best practice

As agreed between the Assistant Minister for Productivity and the relevant portfolio Minister

Adheres to best practice

-

-

Exemption granted by the Prime Minister or RIS assessed as inadequate

Substantial or widespread impact on the economy (Long Form RIS)

Withi