28 April 2016
Independent Review – Department of Employment
On 18 April 2016, the Government introduced a bill to repeal the Road Safety Remuneration Act 2012 and thereby abolish the Road Safety Remuneration Tribunal. The changes also allow the Minister to make Rules dealing with transitional matters.
The Government’s decision was informed by an independent report, which reviewed the road safety remuneration system. The review was certified by the Department of Employment as meeting the requirements of a Regulation Impact Statement. Under the Australian Government Guide to Regulation, the Office of Best Practice Regulation (OBPR) does not assess independent reviews.
The Department has estimated average regulatory savings of $444.5 million per annum, which were agreed with the OBPR.
26 April 2016
Department of Communication and the Arts
On 12 April 2016, the Department of Communication and the Arts (DoCA) wrote to the Office of Best Practice Regulation (OBPR), advising the authority to certify Regulation Impact Statements (RISs) will be delegated to Assistant Secretary-level and above officers in the DoCA.
This is consistent with recent changes to improve flexibility in the RIS process by allowing agencies to delegate the certification authority to any Senior Executive Service (SES) level officers.
To ensure transparency, a decision to depart from the default RIS certification authority (Secretary, Deputy Secretary, or Chief Executive) is published on the OBPR website.
26 April 2016
Post-implementation Review – AASB
In October 2010, the Australian Accounting Standards Board (AASB) introduced AASB 2010-6 to help users of financial statements evaluate the risk exposures relating to transferred financial assets and the effect of those risks on an entity’s financial position; and to promote transparency in the reporting of transfer transactions, particularly those that involve securitisation of financial assets.
A Regulation Impact Statement was required at the time the decision to introduce AASB 2010-6 was made, but was not prepared. Consequently a post-implementation review (PIR) was required.
A PIR was completed by the AASB and was assessed as compliant by the Office of Best Practice Regulation (OBPR). The PIR found the amendments have helped to ensure that disclosures about financial asset transfers are more informative and comparable across entities and, therefore, more useful to users of financial statements of different entities. The PIR also found the changes increased regulatory burden by $43,000 per annum. The change in regulatory burden was agreed with the OBPR.
22 April 2016
Department of Health
The Department of Health will remake without amendment the Therapeutic Goods Act 1989 – Determination under subsection 19A(3).
The Determination contains a list of 9 countries. The Secretary is able to approve the importing or supply of an unapproved medicine (in the event of a shortage or lack of supply of a medicine that has been registered by the Therapeutic Goods Administration) if, amongst other things the unapproved medicine has been approved for general marketing in one of those countries.
In line with the Australian Government best practice regulation requirements for sunsetting legislative instruments, the Department of Health has assessed the operation of this instrument, in consultation with affected stakeholders, and has certified that the instrument is operating efficiently and effectively.
Therefore the Office of Best Practice Regulation notes that a Regulation Impact Statement is not required for the Regulations to be remade.
As the instrument was remade without amendments there are no compliance cost changes.
22 April 2016
COAG Decision Regulation Impact Statement – Legislative and Governance Forum on Consumer Affairs
On 31 March 2016, Consumer Affairs Ministers agreed on changes to the country of origin labelling system for food.
As a result of the decision, many foods such as fresh produce and processed food products will be required to include a kangaroo logo to indicate the food is made, produced or grown in Australia, and a bar chart indicating the proportion of Australian ingredients with a supporting text statement. In addition, it was decided that producers wishing to use a safe harbour defence under consumer law in relation to country of origin claims would no longer be required to pass a ‘production cost’ test.
A Regulation Impact Statement was prepared under the Council of Australian Governments’ RIS requirements to support the decision. The RIS found that that the decision would increase costs for many food importers, manufacturers and retailers, but would benefit consumers looking for more detailed information on the origin of their food. In addition, the removal of the production cost test is likely to result in reduced compliance costs for businesses in all sectors that make country of origin claims about their products.
The Australian Government Department of Industry, Innovation and Science prepared the decision RIS. The RIS was assessed as compliant by the Office of Best Practice Regulation.
20 April 2016
Regulation Impact Statement – The Treasury
On 15 October 2015 the Government put forward the Tax and Superannuation Laws Amendment (2015 Measures No. 5) Bill 2015 which introduces a separate grossed-up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility expenses (meal entertainment benefits) for employees of employers able to access a general fringe benefits tax (FBT) exemption or rebate. In addition, all use of salary sacrificed meal entertainment benefits would become reportable.
Most salary sacrificed fringe benefits provided to certain employees of not for profit organisations are reportable and FBT exempt, or rebatable, only up to a set cap. For instance, employees of public benevolent institutions and health promotion charities have a standard $30,000 FBT exemption cap and employees of public and not for profit hospitals and public ambulance services have a standard $17,000 FBT exemption cap. However, meal entertainment benefits were previously excluded from these caps. That is, these benefits were not required to be reported and were not taken into account when considering whether an employee had exceeded the FBT caps. This means that such benefits were uncapped.
The Bill amends the Fringe Benefits Tax Assessment Act 1986 to limit the concessional treatment of salary packaged entertainment benefits by:
- removing the reporting exclusion for salary packaged entertainment and entertainment facility leasing expense benefits
- removing access to elective valuation rules when valuing salary packaged entertainment benefits
- introducing a cap on the total amount of salary packaged entertainment that certain employees can be provided that are exempt from or subject to fringe benefits tax at concessional rates.
A Regulation Impact Statement (RIS) was prepared and certified by the Treasury, and has been assessed as compliant and best practice by the Office of Best Practice Regulation (OBPR).
The RIS estimates the average regulatory cost at $690,000 per annum, and identifies offsets. The OBPR has agreed to the regulatory cost and offset estimates.
19 April 2016
Independent Review – Australian Accounting Standards Board
On 23 February 2016, the Australian Accounting Standards Board (AASB) approved AASB 16 Leases. AASB 16 Leases requires all lease agreements to be presented on the financial balance sheet of the lessee. This measure will increase the transparency surrounding lease arrangements and make a lessee’s balance sheet better reflect the economics of its transactions.
Consistent with the Government’s RIS requirements, the AASB certified the International Financial Reporting Standards (IFRS) process and analysis as an independent review that has undertaken a process and analysis equivalent to a RIS. The Office of Best Practice Regulation (OBPR) does not assess independent reviews.
The AASB estimated the average annual regulatory cost to business to be approximately $22 million. This has been agreed by the OBPR. Treasury has agreed to locate offsets within the current regulatory burden reporting period.
AASB certified reports on the “Basis for Conclusions”, “Effects Analysis” and “Illustrative Examples” are available from the IASB support materials page (see the AASB No. 16) on the AASB website.
18 April 2016
Regulation Impact Statement for Consultation– Australian Building Codes Board
In March 2016, the Australian Buildings Codes Board (ABCB) released a Council of Australian Governments (COAG) Consultation Regulation Impact Statement (RIS) which examines ways to address the risk to building occupants in the case of fire on the balcony of a residential building.
Under current Australian Standard exemptions, residential buildings are not required to have fire sprinklers on balconies if the balcony does not exceed a certain size. It is possible that this could pose a risk to building occupants in the event of a balcony fire.
The options considered in the Consultation RIS propose either reducing the scope of the exemptions, or removing the exemptions for certain classes of residential buildings.
The Consultation RIS has been approved by the OBPR.
Consultations are now open and will close on 26 April 2016. If you wish to provide feedback on the analysis within the RIS, please send an email to email@example.com with the subject title “Fire Sprinkler RIS”.
13 April 2016
Regulation Impact Statement – Department of Communications and the Arts
On 2 December 2015 the Government introduced the Telecommunications Legislation Amendment (Access Regime and NBN Companies) Bill 2015. The proposal allows NBN Co to conduct pilots and trials of new services or technology without requiring authorisation by the Australian Competition and Consumer Commission.
Prior to the proposed changes, NBN Co was subject to strict non-discrimination obligations. These obligations ensured that NBN Co did not discriminate between access seekers and that access seekers received equal services, terms and conditions and equal levels of information and support. However, the Independent Cost-Benefit Analysis of Broadband and Review of Regulation (the Vertigan review) found that these obligations hindered the practice of pilots and trials which are necessary to the investigation of new and innovative improvements to the National Broadband Network.
The changes are subject to a number of safeguards. Notably, changes to the non-discrimination obligations do not affect NBN Co’s fundamental operation in guaranteeing a level playing field for access seekers.
A Regulation Impact Analysis (RIS) was prepared and certified by the Department of Communications and the Arts, and has been assessed as compliant and best practice by the Office of Best Practice Regulation (OBPR).
The RIS estimates the average regulatory cost at $31,000 per annum, and identifies offsets. The OBPR has agreed to the regulatory cost and offset estimates.
13 April 2016
Regulation Impact Statement – Australian Prudential Regulation Authority
On 30 March 2016 the Australian Prudential Regulation Authority (APRA) announced its intention to modify the current Exemption Order applying to religious charitable development funds (RCDFs). Under the new Exemption Order, after 1 January 2017, RCDFs will only be permitted to offer, issue or sell retail products to retail investors if the products have a minimum term or call period of 31 days. Under transitional arrangements, RCDFs can continue to make available existing products to existing retail investors until 1 January 2018.
RCDFs will also be prevented from offering cheque account facilities and BPAY facilities to retail investors, or offering EFTPOS and ATM facilities to retail investors or affiliates in relation to retail products. RCDFs will not be able to use the terms ‘deposit’ and ‘at-call’ or derivatives of these terms in relation to retail products or in marketing to retail investors.
RCDFs will continue to have to provide a prudential warning to retail investors, which includes a statement to the effect that an investment in an RCDF is not covered by the Commonwealth Government’s Financial Claims Scheme.
A Regulation Impact Statement (RIS) was prepared by APRA and was assessed by the Office of Best Practice Regulation as compliant with the Government’s RIS requirements but not consistent with best practice because the conclusion that the preferred option in the RIS is likely to result in the highest net benefit was not clearly supported by the analysis in the RIS.
The RIS estimates the proposals will increase regulatory burden by $440,000 per annum. The OBPR agreed to the regulatory costs.