Regulation and its review 2005-06

Annual report series

Regulation and its Review 2005-06 was released on 1 December 2006. The report forms part of the Commission's annual report series and meets its obligation to report annually on compliance by Australian Government departments and agencies with the Government's Regulation Impact Statement (RIS) requirements.

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Key points
Media release
Contents

A well functioning regulatory system is an essential component of a modern society. The Australian Government's RIS processes are intended to contribute to this objective by helping to ensure that proposed regulations are warranted and efficient.

During 2005-06, an independent Taskforce on Reducing Regulatory Burdens on Business reported on the systemic causes of over-regulation and ways to further improve the quality of regulation. Its recommendations were largely accepted by the Australian Government. As a result, a number of reform measures have been set in train, including a significant strengthening of the RIS requirements.

The new Office of Best Practice Regulation (OBPR), extending the role of the Office of Regulation Review, will oversee the new requirements. They involve better consultation practices, more rigorous cost-benefit analysis, and quantification of business compliance costs. They will be supported by increased education of officials and stricter gatekeeping arrangements.

Under the RIS requirements applying in 2005 06, over 2600 regulations were made by the Australian Government of which about 3 per cent required preparation of a RIS.

The compliance of departments and agencies with the RIS requirements at the decision-making stage of regulatory policy development was lower overall than in previous years:

Adequate RISs were prepared for 71 per cent of the regulatory proposals that required them (compared with an average compliance rate of 85 per cent over the previous three years).
Of the 21 departments and agencies that were required to prepare RISs, 10 were fully compliant.

The Council of Australian Governments also strengthened its RIS requirements in 2005 06. Under the arrangements applying in 2005-06, compliance by Ministerial Councils and national standard-setting bodies at the decision making stage was 76 per cent, somewhat lower than in earlier years.

Compliance results for 2005-06 demonstrate that there is scope for considerable improvement, both in preparing RISs and in the level of analysis involved. The new RIS requirements are designed to promote improved practices through stricter gatekeeping, combined with enhanced training.

Key requirements of the new regime fall to departments and agencies to incorporate into their internal procedures. Transitional arrangements will be applied by the OBPR to facilitate the move to the strengthened requirements.

In its annual publication Regulation and its Review 2005-06, released today, the Productivity Commission finds that compliance with the governments Regulation Impact Statement requirements for that year was lower than in previous years. The Commission also notes that the Government's New Regulation Framework is being implemented and that it aims to remedy the causes of poor regulatory performance.

The Commission reports that at the decision-making stage for new regulatory proposals in 2005-06:

adequate RISs were prepared for 71 per cent of the regulatory proposals that required a RIS (compared with an average compliance rate of 85 per cent over the previous three years), and
of the 21 departments and agencies that were required to prepare RISs, 10 were fully compliant.

The equivalent compliance rate for Ministerial Councils and national standard-setting bodies was 76 per cent in 2005-06, also somewhat lower than in preceding years.

Following the Australian Government's response to its Regulation Taskforce report, a number of reform measures are being implemented, including the strengthening of the RIS and related requirements. They involve a whole-of-government policy on consultation, more rigorous cost-benefit analysis, and quantification of business compliance costs.

The role and resourcing of the Office of Regulation Review have been enhanced, as the new Office of Best Practice Regulation, to enable it to become a 'one stop shop' on good regulatory practice. The new office will provide greater assistance and support to departments and agencies, as well as monitoring compliance with the requirements of the New Regulatory Framework.

Background information

02 6240 3330

Preliminaries
Cover, Copyright, Foreword, Contents and Abbreviations
Overview - including key points
Chapter 1 Initiatives to achieve best practice in regulation
1.1 The Regulation Taskforce
1.2 Australian Government initiatives to improve regulation
1.3 The Office of Best Practice Regulation
Chapter 2 Compliance with RIS requirements
2.1 Compliance with the Australian Government's previous requirements
2.2 Compliance by type of regulation
2.3 National regulation-making
2.4 Reasons for non-compliance in 2005-06
Appendix A Compliance by portfolio
Appendix B Adequacy of published RISs
Appendix C Compliance with the COAG RIS requirements
Appendix D ORR activities and performance
Appendix E Regulatory reform in the States and Territories
Appendix F Regulation review and reform: international perspectives
References

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