The role a Regulatory Impact Statement plays across Australia

The regulatory processes implemented in Australia’s jurisdictions follow the Council of Australian Governments’ (COAG) principles of best practice regulation. However, each jurisdiction has their own way of applying these processes consistent with their policy development and legislative landscape.

In another HSE article – Regulatory Impact Statement: an important tool in forming regulation –  we highlight what a Regulatory Impact Statement (RIS) is and its requirements and role in the federal policy process. This article will provide a snapshot of how each Australian state and territory administers their regulation-making processes and their version of a RIS and its requirements.

Australian Capital Territory

The ACT Government stipulates that a Regulatory Impact Statement (RIS) is required for all regulatory proposals.

The RIS is prepared once a decision has been made that regulation may be necessary but before a decision has been made on the type of regulation required.

Consultation with the Microeconomic Reform Section should be conducted when starting the RIS to ensure a sound development.

Requirements of a RIS

1. Identify the problem
2. State the objectives of government intervention
3. List the options
4. Identify any mutual recognition issues
5. Undertake impact analysis
6. Make a conclusion and suggest a recommended option
7. Develop guidelines to implement and review the regulation

New South Wales

The NSW Government uses the Better Regulation approach when creating regulatory proposals which includes Better Regulation Principles. All new and amending regulatory proposals must apply these principles.

If a Better Regulation Statement (BRS) is required for the proposal it needs to demonstrate that the Better Regulations Principles have been applied.

Better Regulation Principles

Principle 1: The need for government action should be established. Government action should only occur where it is in the public interest, that is, where the benefits outweigh the costs.

Principle 2: The objective of government action should be clear.

Principle 3: The impact of government action should be properly understood benefits (using all available data) of a range of options, including non-regulatory options.

Principle 4: Government action should be effective and proportional.

Principle 5: Consultation with business, and the community, should inform regulatory development.

Principle 6: The simplification, repeal, reform, modernisation or consolidation of existing regulation should be considered.

Principle 7: Regulation should be periodically reviewed, and if necessary reformed, to ensure its continued efficiency and effectiveness

Northern Territory

The NT Government has adopted a process in line with COAG commitments and best practice regulation, called the Regulation-Making Framework (RMF).

All regulatory proposals, including subordinate legislation, may include a Preliminary Regulatory Impact Statement (PRIS) and may also include a RIS (unless granted an exclusion or exemption).

The Regulation Impact Committee (RIC) will assess the PRIS and certify whether it complies with regulation-making principles. The assessment includes deciding whether a full RIS needs to be prepared.

Requirements of PRIS and RIS

Queensland

The Queensland Government employs COAG’s best practice regulation principles, using Regulatory Impact Analysis (RIA) to assess the effects of proposed policy options.

RIA is used for primary and subordinate legislation, and quasi-legislation when compliance is expected. The state government established the Office of Best Practice Regulation (OBPR) to help agencies apply RIA to their policy development process.

Part of the RIA process is to establish if the regulatory proposal will have significant adverse impacts. If this is the case, then a Preliminary Impact Assessment (PIA) will need to be undertaken. If the OBPR considers the proposal to have substantial impacts then a Consultation RIS will be required, followed by a Decision RIS.

Requirements of a PIA and Consultation RIS

South Australia

SA Government agencies follow a Regulatory Impact Assessment (RIA) process for new and amended government regulation.

Any proposal to create or amend regulation that must seek approval from the Cabinet must include a RIS, unless the proposal is likely to have a minor or no impact or is subject to an exemption or urgently required.

The adequacy of the RIS will be assessed by the impact assessment agencies and the Cabinet Office. The relevant departments will advise on the adequacy of business and regional impacts, cost-benefit analysis, family and societal impacts and environmental impacts.

Requirements of a RIS

1. Describing the problem
2. Objectives of government action
3. Statement of options
4. Analysis of costs and benefits
5. Consultation
6. Conclusion and recommended options
7. Implementation, monitoring and review

Tasmania

The Tasmanian Government follows gatekeeper processes when preparing for new or amended primary legislation, whilst subordinate legislation follows the requirements under the Subordinate Legislation Act 1992.

For proposed primary legislation, the responsible agency must conduct an Initial Legislation Impact Assessment to determine whether the proposed legislation will create a significant negative impact on business or restrict competition. If it will, a RIS will need to be prepared and sent for endorsement by the Economic Reform Unit (ERU) before proceeding to Cabinet.

For proposed subordinate legislation that is likely to have a significant impact on the community, or the agency is unsure of the impact, then the ERU can conduct an ‘in-principle’ assessment. Any proposals assessed as significant will require a RIS. The RIS, and an outline on the proposed public consultation process, is provided to ERU for approval and subsequently released to stakeholders and the broader community for feedback.

Requirements of a RIS

1. Objectives of the legislation
2. Nature of restriction on competition
3. Alternative options
4. Greatest net benefit/least net cost alternative
5. Statement of consultation process

Victoria

The Victorian Government requires best practice regulation principles to be followed. The in-depth assessments are known as Legislative Impact Assessments (LIA) for primary legislation and Regulatory Impact Statements (RIS) for subordinate legislation.

An impact assessment (LIA or RIS) may be prepared for any proposal that is likely to impose significant financial or social burden on a sector of the public.

An indicative threshold of $2 million or more per year is used, including quantifiable and unquantifiable impacts such as human rights impacts.

Requirements of a LIA and RIS

1. Problem analysis
2. Objectives
3. Identify feasible options
4. Impact analysis
5. Preferred option
6. Implementation
7. Evaluation strategy
8. Consultation

Western Australia

The WA Government’s Better Regulation Program promotes an approach to regulatory development guided by a set of five Better Regulation Principles. When preparing a regulatory proposal, the principles are applied and impacts are assessed for economic significance.

Proposals that present direct or indirect significant economic impact to government, business and consumers require a RIS at the consultation (CRIS) and decision phase (DRIS).

Content of a CRIS and DRIS

Access these resources with Environment Essentials

Relevant workplace health, safety and environmental consultations that are available for comment, including RIS, are included within the HSE Bulletin.

References

• Australian Capital Territory Government Publication: Best Practice Guide for Preparing Regulatory Impact Statements
• Commissioner for Better Regulation Publication: Victorian Guide to Regulation
• Government of South Australia Publication: Better Regulation Handbook
• Government of Western Australia Publication: Better Regulation Program: Guidance Note 1 – Economically Significant Impacts
• Government of Western Australia Publication: Better Regulation Program: Guidance Note 2 – Preparing a Consultation and Decision RIS
• Government of Western Australia Publication: Better Regulation Program: Information Paper for Agencies
• New South Wales Government Publication: Guide to Better Regulation
• Northern Territory Government Publication: Regulation-Making Framework
• Queensland Government Publication: Guide to Better Regulation