Regulation and its review 2003-04

Annual report series

Regulation and its Review 2003-04 was released on 16 November 2004 and meets the Commission's obligation to report annually on compliance by Australian Government departments and agencies with the Government's Regulation Impact Statement (RIS) requirements.

This edition provides RIS compliance information in aggregate and for individual Australian Government departments and agencies, as well as for individual Ministerial Councils and national standard-setting bodies. The assessed adequacy of RISs for all Bills, disallowable instruments and treaties tabled in Parliament during the year is noted for the first time.

This year's report also discusses the importance of effective consultation in generating high quality regulation and maintaining public confidence, and provides information on developments in regulatory policy in Australia and internationally.

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Key points
Media release
Contents

A key element of the Australian Government's objective to improve regulations is the requirement to prepare Regulation Impact Statements (RISs) for proposed new and amended regulation which affects business.

The Australian Government's RIS processes broadly conform with OECD best practice principles.

In 2003-04, the Office of Regulation Review advised that RISs were required for 114 regulatory proposals. This represented about 7 per cent of the 1700 regulations which were made.

Overall, the compliance of departments and agencies in 2003 04 with the RIS requirements at the decision-making stage of regulatory policy development was higher than in previous years:

Adequate RISs were prepared for 92 per cent of the 114 regulatory proposals (compared to 81 per cent in 2002 03 and 88 per cent in 2001 02).
The compliance rate for the 18 regulatory proposals assessed as having a more significant impact on business and the community was significantly higher at 94 per cent (compared to 46 per cent in 2002 03 and 70 per cent in 2001 02).

In 2003-04, 24 departments and agencies were required to prepare RISs. Of these, 18 were fully compliant (compared to 12 of 23 in 2002 03).

In 2003 04, compliance by Ministerial Councils and national standard-setting bodies with the Council of Australian Governments' RIS requirements at the decision making stage was 88 per cent, similar to that in 2002 03.

In recognition of the value of effective consultation processes to good regulatory outcomes, many governments in Australia and internationally are taking steps to improve their approach to community consultation.

Regulators achieved their highest level of compliance with the Australian Government's best practice requirements since these became mandatory in 1997, according to a Productivity Commission report Regulation and its Review 2003-04.

The report provides detailed compliance information for individual departments and agencies. About 1700 regulations were introduced by the Australian Government in 2003-04, of which 114 required a Regulation Impact Statement because of their impacts on business. Adequate Regulation Impact Statements were prepared for decision makers for 92 per cent of these proposals (compared to 81 per cent in 2002-03). This is higher than in all previous years.

Productivity Commission Chairman, Gary Banks, said 'The high compliance rate for this year is a welcome sign that regulators are beginning to integrate the Regulation Impact Statement requirements more fully into their policy development processes. Looking forward, the challenge is to increase the quality of Regulation Impact Statements, particularly in canvassing lighter handed regulatory options and assessing compliance costs.'

The report also discusses the value of effective consultation with those potentially affected by regulation. And it contains information on compliance with the Council of Australian Government's (COAG's) RIS requirements.

The report meets the Productivity Commission's obligation to report annually on compliance with the Australian Government's requirements for the review and reform of regulations. Regulation Impact Statements are intended to help inform decision makers about the consequences of proposed regulatory actions, so that resulting regulation can achieve intended goals without placing undue burdens on business and the community.

The Commission's Office of Regulation Review is responsible for advising departments and agencies about the Government's regulatory best practice requirements.

Background information

02 6240 3330

Preliminaries
Cover, Copyright, Foreword, Contents and Abbreviations
Overview - including key points
Chapter 1 The role of Regulation Impact Statements in improving regulation
1.1 Regulatory review and reform policy
1.2 International regulatory developments
1.3 Regulatory policy in Australia and the use of RISs
1.4 Why do some regulators find preparing RISs challenging?
1.5 Future directions in regulatory refor
Chapter 2 Compliance with RIS requirements
2.1 Compliance with Australian Government requirements
2.2 Compliance by type of regulation
2.3 National regulation-making under COAG's requirements
Chapter 3 The importance of community consultation
3.1 Why consult?
3.2 Features of effective consultation
3.3 Examples of consultation requirements
3.4 Lessons from experience
Appendix A Compliance by portfolio
Appendix B Adequacy of published RISs
Appendix C COAG's RIS requirements — compliance and recent developments
Appendix D Australian Government legislation reviews
Appendix E ORR activities and performance
Appendix F Regulatory reform in States and Territories
Appendix G International development
References

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