19 March 2014

Future of Financial Advice Amendments – Details-stage Regulation Impact Statement – Department of the Treasury

Australia’s financial services industry is a significant part of the Australian economy.  It employs more than 400,000 people and is expected to continue growing, driven by Australia’s ageing population and increasing pool of superannuation funds.

As part of its commitment to reducing the regulatory burden on business, the Government has announced changes to the regulation of the financial products and services sector.

The key reforms include:

  • Removing ‘opt-in’ requirements, (under which advisers would otherwise need to obtain their client’s approval every two years for ongoing fee arrangements);
  • Limiting annual fee disclosures to prospective clients only;
  • Removing a ‘catch-all’ provision in the best interest duty, as well as providing a safe harbour for satisfying the best interest duty; and
  • Exempting general advice from the definition of ‘conflicted remuneration’, except where the general advice is provided together with personal advice.

These reforms are estimated to produce average ongoing compliance cost savings of around

$190 million per year, as well as once-off implementation cost savings of around $88 million.  Minor policy changes resulted in modest revisions to the compliance cost estimates contained in the options-stage RIS.  Overall, the measures were assessed as having a major impact on the broader economy and therefore given a B rating (on a scale of A to D) in relation to the level of analysis required.

An options-stage RIS was prepared by the Department of the Treasury to facilitate consultation. As the proposal relates to an election commitment, alternative policy options were not considered. The options-stage RIS was published on 13 January 2014.

A details stage RIS was subsequently prepared and certified by the Department of the Treasury, and has been assessed as adequate by the Office of Best Practice Regulation.  Due to the significance of the proposal, a Post-implementation Review of the proposal will be required within five years.


19 March 2014

Changes to the Personal Property Securities Act 2009– Single stage Regulation Impact Statement – Attorney-General’s Department

On 19 March 2014 the Prime Minister announced changes to the rules that relate to when a lease may need to be registered on the Personal Property Securities Register.  The changes will simplify the requirements for leases of less than 12 months.

Business will no longer need to consider two timeframes: one for goods generally and one for serial numbered goods, such as motor vehicles. The changes will also minimise the need for businesses to consider whether to register leases that are for a term of less than 12 months.

As noted in the Regulation Impact Statement (RIS), consultation suggests that business is finding that the current system for different lease terms and different goods is confusing and costly.  However, the RIS acknowledges that while fewer registrations would result in reduced costs for the businesses, businesses will no longer gain the benefits associated with registration.

The proposal has been assessed as likely to have a relatively minor impact on the broader economy and has therefore been given a ‘D’ rating (on a scale of A to D) in relation to the level of analysis required. The changes are estimated to reduce regulatory costs by $11.2 million per year.

The OBPR notes that, as no decision has been previously announced, an options-stage RIS was not required.

A single-stage RIS was prepared and certified by the Attorney-General’s Department and has been assessed as adequate by the Office of Best Practice Regulation.


19 March 2014

Amendments to the Fair Work Act 2009 – Details-stage Regulation Impact Statement – Department of Employment

On 27 February 2014, the Department of Employment tabled amendments to the Fair Work Act 2009. Among other changes, the amendments seek to introduce good faith bargaining arrangements for greenfield employment agreements, and amend the existing rights of employee organisations to enter workplaces.

The main impact of these changes is to reduce compliance costs for business. The greenfields changes seek to limit the length of employment agreement negotiations before new projects can begin and also to limit the right of unions to enter workplaces. The Department estimates that the total reduction in regulatory burden will be approximately $70 million per year and these costings have been agreed with the Office of Best Practice Regulation (OBPR).

The proposal has been assessed as likely to have a measurable impact on the economy with no impacts on competition. A details-stage Regulation Impact Statement (RIS) has been prepared and certified by the department, and assessed as adequate by the OBPR.


19 March 2014

Streamlining Offshore Environmental Approvals – Single-stage Regulation Impact Statement – National Offshore Petroleum Safety and Environmental Management Authority

On 28 February 2014, the Minister for the Environment and the Minister for Industry announced that environmental approvals for offshore petroleum and greenhouse gas activities would be solely undertaken by the National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA).

Previously, petroleum and greenhouse gas activities in Commonwealth waters that were likely to impact on matters of national environmental significance were subject to regulation under both the Offshore Petroleum and Greenhouse Gas Storage (OPGSS) Act 2006 and the Environment Protection and Biodiversity Conservation (EPBC) Act. Now offshore environment activities will only be regulated through the OPGGS Act and administered by NOPSEMA.

The Regulation Impact Statement (RIS) prepared by the Department of Industry notes that the dual approvals process was largely duplicative and resulted in additional costs being imposed on industry. The RIS also notes that the extent to which the dual approvals process provides environmental benefits is unclear.

The measure is estimated to reduce regulatory costs by $120 million per year to industry. The majority ($110 million) of these savings result from a reduction in the delay to the commencement of projects caused by the dual assessment process.

It is considered that streamlining the assessment process will not result in any noticeable impacts on the environment. This is primarily because the OPGGS Act will apply the same fundamental test as the EPBC Act of whether potential impacts and risks to the environment are “acceptable” before an activity may proceed.

The proposal has been assessed as likely to have a measurable impact on the broader economy with minor impacts on competition and has therefore been given a C rating (on a scale of A to D) in relation to the level of analysis required.

The OBPR notes that as no decision has been previously made, an options-stage RIS was not required.

A single-stage RIS was prepared and certified by the Department of Industry and has been assessed as adequate by the Office of Best Practice Regulation.


19 March 2014

Licensing and other amendments under the Safety, Rehabilitation and Compensation Act 1988 – Details-stage Regulation Impact Statement – Department of Employment

On 19 March 2014, the Prime Minister announced the amendments to the Safety, Rehabilitation and Compensation Act 1988. Among other changes, the amendments seek to allow greater access by national employers to the Commonwealth workers’ compensation scheme, and coverage under the Commonwealth workplace health and safety regime.

These changes would allow the option for national employers (those with employees in 2 or more states or territories) to self-insure under the Commonwealth’s workers’ compensation scheme, and be covered by a single workplace health and safety regime. This would eliminate the need for such firms to deal with multiple regulations and regulators. The changes are estimated to result in a reduction in compliance costs averaging $33 million per year over ten years and these costings have been agreed with the Office of Best Practice Regulation (OBPR). The Regulation Impact Statement (RIS) indicates that the impact on state and territory workers’ compensation schemes, and those firms remaining in such schemes, would be minimal.

The proposal has been assessed as likely to have a measurable impact on the economy with no impacts on competition. A details-stage RIS has been prepared and certified by the department, and assessed as adequate by the OBPR.


18 March 2014

Proposed Primary Production and Processing Standard for meat and meat products – COAG Consultation Regulation Impact Statement – Food Standards Australia New Zealand

On 8 October 2013, Food Standards Australia New Zealand (FSANZ) issued a call for submissions for a proposed Primary Production and Processing Standard for Meat & Meat Products.

The Australian Food Standards currently regulate processors of meat and meat products in relation to on-farm activities, but there are no corresponding obligations on producers in food safety legislation. The proposed code would regulate meat producers in relation to traceability, inputs and management of waste for farmed animals. This in turn would allow State and Territory regulators to investigate on-farm food safety issues without activating emergency powers under their respective Food Acts.

A Council of Australian Governments regulation impact statement for consultation was prepared by the FSANZ and has been approved by the OBPR.

The consultation period closed on 3 December 2013.


18 March 2014

Protection of images and indicia for major sporting events – Options-stage Regulation Impact Statement – Department of Health

On 3 March 2014, the Department of Health released an options-stage RIS examining proposed protections of images and indicia for major sporting events. The proposed legislation would extend the existing trademark and copyright protection offered to organisers and sponsors of major sporting events by protecting certain words, phrases and images associated with these events in an effort to reduce the likelihood of ambush marketing. Initially, the events protected would be the Asian Football Confederation Asian Cup 2015, the International Cricket Council Cricket World Cup 2015, and the Gold Coast 2018 Commonwealth Games.

The proposal has been assessed as likely to have a relatively minor impact on the economy with no impacts on competition.

An options-stage RIS has been prepared and certified by the department, and the Office of Best Practice Regulation agreed to the regulatory costings.


28 February 2014

Regulation of aged care accommodation payments – Single-stage Regulation Impact Statement – Department of Social Services

On 28 January 2014, the Assistant Minister for Social Services made the Fees and Payments Principles 2014 (the Principles) and the Aged Care (Maximum Accommodation Payment Amount) Determination 2014 , which have the effect of introducing the process by which accommodation payments in residential aged care are approved.

Under this process, residential aged care providers that wish to charge accommodation payments above a certain threshold are required to apply to the Aged Care Pricing Commissioner for approval. The bases on which the proposed fees can be justified are set out in the Principles. The process is likely to have minor compliance cost impacts on the residential aged care sector, which are offset by previously-announced simplifications to the process for setting prices below the threshold.

The measures have been assessed by the Office of Best Practice Regulation (OBPR) as likely to have a limited impact on the broader economy with minor impacts on competition and has therefore been given a C rating (on a scale of A to D) in relation to the level of analysis required.

The OBPR notes that an options-stage RIS was not required for this proposal and a single stage RIS has been prepared.

The RIS was prepared and certified by the Department of Social Services and approved by the OBPR, under the July 2013 Australia Government best practice regulation requirements.


21 February 2014

Amendments to the Fair Work Act 2009 – Options-stage Regulation Impact Statement – Department of Employment

On 31 January 2014, the Department of Employment released an options-stage RIS examining proposed amendments to the Fair Work Act 2009. The proposed amendments form part of the Government’s election commitments. Among other changes, they seek to introduce good faith bargaining arrangements for greenfield employment agreements, and amend the existing rights of employee organisations to enter workplaces; these changes are likely to reduce the regulatory burden faced by large resource and construction projects in particular.

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

An options-stage RIS has been prepared and certified by the department, and the Office of Best Practice Regulation agreed to the regulatory costings.


17 February 2014

Best Practice Regulation Report 2012-13

Today we released our annual compliance report, the Best Practice Regulation Report 2012-13. It’s our independent assessment of compliance with Australian Government and Council of Australian Governments (COAG) best practice regulation requirements. Essentially, it considers whether a Regulation Impact Statement was prepared for each decision and if the regulation impact statement was published. It also includes information about post-implementation reviews.

The 2012-13 report shows an increase in compliance with the Australian Government’s best practice regulation requirements. At the decision-making stage, compliance was 97 per cent in 2012-13, up from 88 per cent in 2011-12. There were two non-compliant Australian Government proposals at the decision-making stage in 2012-13, compared with nine in 2011-12. ‘Exceptional circumstances’ exemptions were granted by the former Prime Minister (where no regulation impact statement is required to be prepared) on eight occasions during 2012-13, up from five in 2011-12.

Non-compliance with the post-implementation review requirements increased to three in 2012-13, compared with two in the previous year. Each instance of non-compliance was because the post-implementation review was not completed within a reasonable timeframe.

The report also shows an increase in compliance by COAG Councils and national standard-setting bodies in 2012-13. Compliance at the decision‑making stage was 86 per cent in 2012-13, up from 81 per cent in the previous year. COAG’s best practice regulation requirements were not met at the decision-making stage on two occasions in 2012-13, down from three in the previous year.

The 2012-13 report also discusses OBPR’s endeavours to embed best practice regulation across Australian Government agencies, COAG Councils and national standard-setting bodies, as well as assisting some developing economies in the APEC region.