23 January 2015

Revised Accounting Standard for Revenue from Contracts with Customers – Regulation Impact Statement – Australian Accounting Standards Board

On 23 December 2014, the Australian Accounting Standards Board (AASB) announced it had approved a new standard, AASB 15 Revenue from Contracts with Customers, that addresses the financial reporting of revenue and cash flows arising from an entity’s contracts with customers.

The new standard establishes principles, and includes disclosure requirements, for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, based on the international financial reporting standard IFRS 15 Revenue from Contracts with Customers.

IFRS 15 addressed concerns by users of financial statements that existing revenue standards have led to inconsistencies between entities’ reported revenues, principally in relation to when an entity recognises revenue under some long term contracts (e.g. some construction contracts) and contracts that bundle together goods and services (e.g. contracts that bundle a telephone handset with network services). By incorporating the requirements of IFRS 15 into AASB 15, the new Australian standard addresses these issues as they apply to Australia and ensures that financial statements prepared by Australian entities in accordance with Australian accounting standards will remain compliant with international financial reporting standards. The costs incurred to comply with the new standard are expected to be primarily one-off implementation costs and, to a lesser extent, some ongoing preparation costs for some industries, with the most significant costs for entities that operate in the software and telecommunications services industries.

The proposal has been assessed as likely to have a measurable but contained impact on the economy with no impacts on competition.

A Regulation Impact Statement (RIS) was prepared and certified by the AASB, and has been assessed as compliant by the Office of Best Practice Regulation (OBPR). In addition, the OBPR advises that the process followed by the AASB and the level of analysis contained in the RIS was consistent with best practice.

The RIS estimates the average annual regulatory cost at $15.1 million per annum, and identifies offsets. The OBPR has agreed to the regulatory cost and offset estimates.


23 January 2015

Revised Accounting Standard for Financial Instruments – Regulation Impact Statement – Australian Accounting Standards Board

On 23 December 2014, the Australian Accounting Standards Board (AASB) announced it had approved a new standard for accounting for financial instruments, AASB 9 Financial Instruments, to supersede earlier versions of AASB 9 issued in December 2009 and December 2010. The new standard incorporates the international financial reporting standard IFRS 9 Financial Instruments issued in July 2014, which made changes in relation to:

  • reporting impairment of financial assets; and
  • classification and measurement of financial assets, including the introduction of a measurement category of ‘fair value through other comprehensive income’ for debt instruments.

The July 2014 international standard addressed concerns by users of financial statements that the existing standard for recognition of financial losses on loans did not sufficiently incorporate information on expected losses.

By incorporating the requirements of IFRS 9 into AASB 9, the new Australian standard both addresses those concerns in Australia and ensures that financial statements prepared by Australian entities in accordance with Australian accounting standards will remain compliant with international financial reporting standards. To implement the new approach to financial reporting, Australian banks, plus their auditors, will face both initial and, to a lesser extent, ongoing compliance costs. There may also be costs arising from flow on effects of changes to reported profits and total net assets, such as through making adjustments to existing contractual arrangements and complying with the requirements of prudential and tax regulations.

The proposal has been assessed as likely to have a measurable but contained impact on the economy with no impacts on competition.

A Regulation Impact Statement (RIS) was prepared and certified by the AASB, and has been assessed as compliant by the Office of Best Practice Regulation (OBPR).

The OBPR notes that the preparation of the RIS was not consistent with best practice because of the limited depth of analysis of the benefits to business of maintaining harmonisation with international standards and the full economic costs of adopting the new standard.

The RIS estimates the average annual regulatory cost at $32.2 million per annum, and identifies offsets. The OBPR has agreed to the regulatory cost and offset estimates.


19 January 2015

Employee Share Schemes and Start-ups – Regulation Impact Statement for consultation – The Treasury

On 14 October 2014, the Minister for Industry and the Prime Minister jointly announced  the Industry Innovation and Competitiveness Agenda. The report includes a proposal to improve taxation arrangements for Employee Share Schemes.

The proposal considers changing the taxation point for options in employee share schemes and allowing start-ups to offer options and shares at a small discount that will generally be exempt from up-front taxation. These changes intend to increase the number of employees participating in Employee Share Schemes.

The proposal has been assessed by the Office of Best Practice Regulation (OBPR) as likely to have a measurable but contained impact on the economy with no impacts on competition.

A Regulation Impact Statement has been prepared by the Treasury for consultation. Consultations on this RIS are now open and will close on 6 February 2015. If you wish to provide feedback on the analysis within the RIS, please send an email to ess@treasury.gov.au.

The RIS has been certified by the Treasury and was subject to an early assessment by the OBPR.

 


19 January 2015

Telecommunications (Due Date for Annual Carrier Licence Charge) Determination No. 1 and Telecommunications (Late Payment of Annual Carrier Licence Charge) Determination No. 1 of 1999 – Remaking of sunsetting instruments without amendments – Australian Communications and Media Authority

The Australian Communications and Media Authority (ACMA) remade and consolidated two sunsetting legislative instruments without significant amendments on 8 September 2014: the Telecommunications (Due Date for Annual Carrier Licence Charge) Determination No. 1 of 1999 and Telecommunications (Late Payment of Annual Carrier Licence Charge) Determination No. 1 of 1999.

The instruments outline the payment rules for the annual carrier licence charge under Part 3 of the Telecommunications (Carrier Licence Charges) Act 1997.

The proposal has been assessed by the Office of Best Practice Regulation (OBPR) as likely to have a limited impact on the economy with no impacts on competition.

In line with the Australian Government best practice regulation requirements for sunsetting legislative instruments, the ACMA has assessed the operation of these instruments in consultation with affected stakeholders and has certified that these instruments are operating efficiently and effectively.

As the instruments were remade without amendments there are no compliance cost changes.


8 January 2015

Building Code 2014 advance release – Independent Review – Department of Employment

On 17 April 2014, the Government published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (‘the Building Code’). On 28 November 2014 it published a further advance release.

The Building Code sets out the standard of workplace relations conduct expected from those contractors that want to perform work funded by the Commonwealth Government. Among other provisions, the Code prohibits the inclusion of clauses in enterprise agreements that:

  • would impose limits on the right of the code covered entity to manage its business or to improve productivity;
  • would discriminate, against certain persons, classes of employees, or subcontractors; or
  • are inconsistent with freedom of association requirements set out elsewhere in the Code.

While the Code does not come into effect until the Building and Construction Industry (Improving Productivity) Bill 2014 commences as an Act, the advance release of the Code notes that the provisions described above apply in respect of enterprise agreements made after 24 April 2014, or that were varied in accordance with the Fair Work Act 2009. These clauses are likely to have the effect of influencing enterprise agreements negotiated in the building and construction industry from that date.

The two decisions to make an advance release of the Building Code 2014 were informed by analysis and consultations undertaken by the Coalition Taskforce on Re-establishing the Australian Building and Construction Commission prior to the 2013 Federal election, and by the Department of Employment subsequently.

This process was certified by the Department of Employment as meeting the requirements of a Regulation Impact Statement. The Office of Best Practice Regulation (OBPR) does not assess independent reviews. In certifying the process the Department of Employment did not follow best practice as the self-assessment and agreement to regulatory costs occurred after the first decision to publish an advance release of the Building Code 2014 on 17 April 2014.

The Department of Employment estimates the reduction in annual regulatory burden is approximately $1.05 million. The OBPR has agreed to the estimated change in regulatory burden.


8 January 2015

First Protocol to amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area – Regulation Impact Statement – Department of Foreign Affairs and Trade

On 26 August 2014, the Trade and Investment Minister signed the First Protocol with Ministers from the eleven other parties to the agreement, at the ASEAN Economic Ministers – Closer Economic Relations Trade Ministers Meeting in Burma.

The First Protocol amends the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) to remove regulatory impediments that have been identified as hindering business use of the Agreement, it will reduce the information requirements imposed on business when completing certificates of origin, simplify the presentation of the Agreement’s Rules of Origin, and provide for the use of HS 2012 nomenclature.

The change is expected to reduce compliance costs for Australian businesses making use of AANZFTA to import or export goods, and will not introduce any new requirements or administrative burdens on business, with any initial transitional costs expected to be minimal.

The change updates the existing FTA to reflect modern business practices thereby helping to ensure that the Agreement remains commercially relevant, and further secures Australia’s competiveness in key markets.

The implementation of the First Protocol will require an amendment of the Customs (ASEAN-Australia New Zealand Free Trade Agreement Rules of Origin) Regulation 2009.

The RIS prepared and certified by the Department of Foreign Affairs and Trade, was assessed as compliant and consistent with best practice by the Office of Best Practice Regulation.

The RIS estimated the average annual regulatory cost saving at $0.64 million per annum. The OBPR has agreed to the regulatory cost saving.


6 January 2015

Hydrocyanic Acid in Apricot Kernels and other Foods – COAG Consultation Regulation Impact Statement – Food Standards Australia New Zealand

On 16 December 2014, Food Standards Australia New Zealand (FSANZ) released a consultation Regulation Impact Statement for the risk management of hydrocyanic acid in apricot kernels and other foods.

Consumption of raw apricot kernels poses an acute public health and safety risk for consumers due to the risk of cyanide poisoning (from the release of hydrocyanic acid) which can lead to death. The Consultation RIS examines whether measures can be put in place to manage future potential public health and safety issues.

The consultation RIS considers five options for addressing the problem, ranging from maintaining the status quo, though to labelling options, and banning the sale of some raw apricot kernels.
FSANZ undertook targeted consultation with industry and food enforcement agencies in 2012 and 2013. This work has informed the development of the options explored in this Consultation RIS as well as the analysis of the impacts of each option.

FSANZ will accept submissions on this proposal until 10 February 2015.

The consultation RIS has been prepared by FSANZ, and assessed as adequate by the Office of Best Practice Regulation.


22 December 2014

International Standards and Risk Assessments – Regulation Impact Statement for consultation – Department of the Prime Minister and Cabinet

On 14 October 2014, the Prime Minister and the Minister for Industry jointly announced the Industry Innovation and Competitiveness Agenda. The Agenda seeks to strengthen Australia’s competitiveness, targeting job creation and higher living standards. One of the initiatives to be implemented over the next 18 months is the adoption of international standards and risk assessments for certain products.

Building on the Government’s deregulation agenda, the proposal seeks that regulators should not impose additional requirements beyond those already applied under trusted international regulation, unless it can be demonstrated there is good reason to do so. The proposal requires departments and agencies to review existing regulation against this principle.

The proposal has been assessed by the Office of Best Practice Regulation (OBPR) as likely to have a substantial impact on the economy with significant impacts on competition. The RIS explored two alternatives to this proposal – maintaining the status quo, and mandating the adoption of international standards and risk assessments without further review.

A Regulation Impact Statement (RIS) has been prepared by the Department of the Prime Minister and Cabinet, and was subject to an early assessment by the OBPR.

To ensure a thorough review of all regulations, ministers will write to regulators in their portfolio and key business and other stakeholders seeking their views on each of their standards and risk assessment processes against this principle. Members of the public are invited to submit examples of unnecessary divergence from international standards on the Government’s Cutting Red Tape website.


4 December 2014

Revised regulation of ‘scope of registration’ applications in VET sector – Regulation Impact Statement – Department of Industry

On 11 September 2014, the Minister for Industry announced that the Australian Skills Quality Authority (ASQA) will expand the delegation for registered training providers (RTOs) to make decisions about changing the scope of their registration.

The new approach will reduce red tape for highly compliant RTOs, by addressing the need for training providers to seek approval from ASQA before they offer new courses or make changes to the courses they are already delivering.

This will be achieved through ASQA inviting the most highly compliant RTOs to receive a delegation, under section 226 of the National Vocational Education and Training Regulator Act 2011, which will enable them to manage their own scope without the need to apply to ASQA for changes. There will be no legislative changes to the NVETR Act or associated standards.

The change is expected to reduce the compliance costs for those RTOs who no longer need to prepare change of scope applications, reduces their delay costs from waiting for approvals, and avoids the need for them to pay application fees. However, higher risk providers, including new market entrants, will continue to face these costs. There is also likely to be a saving to the ASQA through no longer processing applications from low risk providers.

The revised regulation has been assessed as likely to have a measurable but contained impact on a sector of the economy with minor impacts on competition.

The RIS prepared and certified by the Department of Industry, wasassessed as compliant by the Office of Best Practice Regulation, with the RIS also being consistent with best practice.

The RIS estimated the average annual regulatory cost saving at $3.32 million per annum. The OBPR has agreed to the regulatory cost saving.


4 December 2014

Maximum level for tutin in honey – COAG Decision Regulation Impact Statement – Food Standards Australia New Zealand

On 29 October 2014, Food Standards Australia New Zealand (FSANZ) approved a variation to the Australia New Zealand Food Standards Code (the Code) to provide for maximum levels (ML) for tutin in honey and comb honey.

Tutin is a plant-derived neurotoxin, which can sometimes be present in honey produced in parts of New Zealand. Following a severe poisoning incident in New Zealand in 2008 temporary MLs for tutin in honey and comb honey (of 2 mg/kg and 0.1 mg/kg, respectively) were adopted into the Code while further research and evaluation was conducted. The temporary MLs were due to expire on 31 March 2015.

The variation to the Code reduces to 0.7 mg/kg and makes permanent the ML of tutin in honey. This ML is based on scientific research that indicates that some people may have adverse reactions to tutin even at levels below the current temporary MLs. The new MLs may result in higher testing and blending costs for some New Zealand honey producers, but will reduce the risk to public health from tutin poisoning.

For comb honey, the new ML has also been set at 0.7 mg/kg. For comb honey producers, the new ML does not impose any change on current industry practices since compliance with the existing New Zealand Tutin Standard for comb honey will ensure compliance with the standards in the Code.

A Council of Australian Governments Decision RIS has been prepared by FSANZ, and assessed as adequate by the Office of Best Practice Regulation.