John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Hansard source

On behalf of the Minister for Finance and Deregulation, Mr Tanner, I table a statement on best practice regulation requirements. I seek leave to incorporate the statement in Hansard.

Leave granted.

The statement read as follows—

Increasing Australia’s long term productive capacity is the key to maintaining downward pressure on inflation and therefore downward pressure on interest rates. As Labor announced prior to the election, a key element in the government’s plan to increase Australia’s productivity is our deregulation agenda.

For the first time, Australia has a cabinet minister for deregulation. This high-level oversight of the government’s deregulation agenda is essential for getting things done.

Myself and the minister assisting on deregulation, Dr Craig Emerson, are working in cooperation with the states and territories through the Council of Australian Governments’ Business Regulation and Competition Working Group to tackle areas of regulatory duplication or inconsistency between different levels of government, such as occupational health and safety laws.

At the federal level, we are already at work undertaking a stock take of existing regulation and taking action where we find unnecessarily burdensome or ineffective regulation.

In partnership with the Minister for Superannuation and Corporate Law, I have set up the Financial Services Reform Working Group to cut back 50- to 80-page product disclosure statements down to the essential information that consumers actually need to know.

And in the coming months I’ll be working with other portfolio ministers to deliver better regulation and better outcomes for the Australian community.

The Rudd Labor government is working towards a culture of continuous regulatory improvement. Under our government, we want more productive relationships between regulators and those they regulate. We want to actively seek out and respond to ideas for improvement all the time.

An important part of this commitment to better quality regulation is ensuring that any proposed new regulations are thoroughly scrutinised so that they are introduced only where necessary and at minimum cost to business and consumers.

I am pleased to announce to the parliament today further details of Labor’s commitment to the best practice regulation requirements and the continuing role of the Office of Best Practice Regulation in their administration.

The Rudd Labor government fully endorses the six principles of good regulatory process identified by the 2006 Banks Taskforce on Reducing Regulatory Burden on Business.

These principles state that governments should not act to address problems until a case for action has been clearly established.  In acting, governments need to consider the benefits and costs of a range of feasible policy options, and then select the one which provides the greatest overall net benefit for the community. Effective guidance should be provided to regulators and regulated parties about the regulation’s policy intent and expected compliance requirements. Then there should also be mechanisms to ensure regulation remains relevant and effective over time as well as effective consultation with regulated parties at all stages of the regulatory cycle.

The Australian government’s Best Practice Regulation Handbook, released in August 2007, sets out best practice regulation requirements in line with these principles. The Rudd Labor government is committed to not just maintaining, but further strengthening these requirements.

Since Labor took office last year, the Office of Best Practice Regulation or OBPR has moved into the Department of Finance and Deregulation. This arrangement better reflects the central role of the OBPR in improving the quality of new regulation through administration of the best practice regulation requirements.

Despite this administrative change, the OBPR will retain its distinct identity. It will continue to be a one-stop-shop to assist departments and agencies to meet the government’s requirements and to assess and report on compliance.

Compliance with the procedures and processes outlined in the Best Practice Regulation Handbook remains mandatory for all Australian government departments, agencies, statutory authorities and boards that make, review or reform regulations. This includes not only ‘black-letter law’ but also quasi-regulation such as rulings, guidance note and standards.

The level of regulatory impact analysis required is greater the more significant the regulatory proposal is likely to be. A preliminary assessment must be undertaken for all regulatory proposals. Proposals likely to involve medium business compliance costs must also have a further full quantitative assessment of compliance cost implications using the Business Cost Calculator or approved equivalent. Proposals likely to have a significant impact require even greater analysis, including compliance cost quantification, to be undertaken and documented in a Regulation Impact Statement (RIS).

The OBPR has responsibility for certifying that compliance costs have been quantified and for assessing the adequacy of RISs. Proposals can generally not proceed to the decision making stage until OBPR certification has been received.

In performing this role, the OBPR is concerned only with the standard of analysis undertaken. It does not endorse or support particular regulatory options or outcomes. Such deregulation policy matters will be dealt with in a separate area of the department as part of the government’s broader agenda for reducing the regulatory burden on Australian businesses and consumers.

To perform its watchdog role effectively, the OBPR needs to exercise its decision making functions in an independent manner.

The government has put in place procedures to ensure neither ministers nor their staff can seek to intervene in or influence the OBPR’s deliberations.

Decisions on the adequacy of a regulatory impact analysis and compliance with the best practice regulation requirements will be made independently by the Executive Director of the OBPR.

As the OBPR is now part of the Department of Finance and Deregulation, the department’s secretary will be able to support the independence of OBPR’s decision making on best practice regulation requirements, helping shield the OBPR executive director from any undue influence, and appropriately advocating and defending the OBPR regulatory assessment process.

The OBPR will also continue to prepare the annual Best Practice Regulation Report. This report outlines compliance with the best practice regulation principles on an agency by agency basis and its public release is an important element in ensuring transparent and accountable regulation making. Publication of the report will be prepared and authorised by the Executive Director of the OBPR and presented to the Minister for Finance and Deregulation as a final report.

These existing arrangements are important to ensure any new regulation is effective and any compliance burden is as small as possible.

Keeping the regulatory burden down is vital to ensure we do not tie people up in unnecessary red tape and compliance regimes.

In a number of areas the Rudd Labor government is moving to further strengthen the transparency of the regulatory impact analysis process.

Rather than waiting until the end of each reporting year to publish adequacy data, the government will require that, in all but exceptional circumstances, a RIS and the OBPR’s assessment of its adequacy will be made public before regulations come into effect.

The best practice regulation requirements will also be amended to require that OBPR assess and make public its assessment of the adequacy of post-implementation review.

The government is truly committed to ongoing, continuous regulatory reform. That is why we have put deregulation front and centre of our agenda to improve Australia’s productivity, to keep inflation as low as possible and to remove unnecessary barriers to people finding well paying, secure jobs.

I commend the statement to the Senate.