4 July 2014

Changes to Required Advisory Statements for Medicine Labels – Regulation Impact Statement – Therapeutic Goods Administration

On 23 May 2014 the National Manager of the Therapeutic Goods Administration (as delegate to the Minister for Health) made the Therapeutic Goods Order 69D, changing the requirements for the advisory statements that must be made on non-prescription medicine labels.

The labels of non-prescription medicines should provide self-medicating consumers with sufficient information to choose the medicines appropriately and to use the medicines safely and effectively. In order to ensure that important safety information is included on non-prescription medicine labels, the Therapeutic Goods Act 1989 mandates the inclusion of advisory statements on some labels. These statements are currently compiled in the “Required Advisory Statements for Medicine Labels” (‘the RASML’).

From time to time it is necessary to review the mandatory advisory statements and to update the RASML to include new/revised statements where appropriate. This is because new medicines requiring new advisory statements may become available to consumers, or because new risks may be identified with existing medicines.

The changes to the RASML will require approximately 70 businesses to change the labels of around 500 different medicines. This will result in a one-off additional cost to these firms of around $2 million to $5 million. There will be an 18 month implementation period for the changes to allow firms to bring their products in line with the updated RASML. As a result of the changes, consumers will be better informed of the appropriate use of the affected medicines.

A Regulation Impact Statement (RIS) was prepared and certified by the Therapeutic Goods Administration under the June 2010 RIS requirements. It was assessed as adequate by the Office of Best Practice Regulation.


4 July 2014

Improving the model Work Health and Safety laws – COAG Consultation Regulation Impact Statement – Council of Australian Governments

On 30 June 2014, ministers responsible for work health and safety from all Australian governments agreed to release an Issues Paper and Consultation regulation impact statement (RIS) examining improvements to the model Work Health and Safety (WHS) laws.

In 2008, COAG signed an agreement to implement model WHS laws across the country. The model WHS Act, model WHS Regulations and model Codes of Practice were agreed – together these make up the model WHS laws. Seven jurisdictions (the Commonwealth, Australian Capital Territory, New South Wales, Queensland, Northern Territory, South Australia and Tasmania), have since adopted the model WHS laws.

The current review process is investigating ways in which model WHS laws could be improved to reduce red tape and make it easier for businesses and workers to comply with their work health and safety responsibilities, as agreed by the Council of Australian Governments.

A COAG consultation RIS – incorporating an issues paper – was prepared by the agency supporting Safe Work Australia, and has been approved by the Office of Best Practice Regulation.

The consultation period closes on 1 August 2014.


2 July 2014

Emissions Reduction Fund, Safeguard Mechanism – RIS – Department of the Environment

On 24 April 2014, the Government released the Emissions Reduction Fund (ERF) White Paper.

The Department of the Environment has certified the White Paper as a Regulation Impact Statement (RIS) for initial decisions on the ERF including the ERF crediting and purchasing arrangements and changes to the Carbon Farming Initiative, and coverage of the ERF safeguard mechanism in accordance with the Australian Government Guide to Regulation.

The Government will provide $2.55 billion to reduce emissions at lowest cost over the period to 2020 and make a contribution towards Australia’s 2020 emissions target.

The Department estimated the change in regulatory burden associated with the ERF crediting and purchasing arrangements and changes to the Carbon Farming Initiative at $4.68 million per annum. This increase was offset by savings from the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related legislation. Initial decisions on coverage of the safeguard mechanism announced in the White Paper will not change the regulatory burden on business.

The Government will consult with business to establish a flexible framework for complying with the safeguard in the unlikely event of baselines being exceeded. The RIS will be finalised after consultation has concluded.


26 June 2014

Removal of Australian Industry Participation Officers

Regulation Impact Statement – Department of Industry

The Minister for Industry has revised the Enhanced Project By-law Scheme (EPBS) Guidelines to remove the requirement for large construction projects to employ an Australian Industry Opportunity Officer.

Under the requirement, construction projects over $2 billion that were receiving tariff concessions under the EPBS were required to employ an officer whose role was to promote procurement from Australian suppliers.

To inform the initial decision on whether or not to maintain the requirement, the Department of Industry certified an options stage RIS, titled: Australian Industry Participation Officers, under the July 2013 RIS requirements. The RIS recommended the removal of the requirement and estimated that doing so would reduce regulatory burden by $3.9 million a year.

To inform the final decision point on whether or not to maintain the requirement, the Department of Industry certified an earlier RIS, titled: Strengthening Australian Industry Participation that was developed in 2012 to examine ways to increase Australian suppliers’ involvement in large construction projects. The RIS Strengthening Australian Industry Participation recommended introducing the requirement that large construction projects employ an Australian Industry Participation Officer as well as undertake an Australian Industry Participation plan.

In assessing the adequacy of the RIS Strengthening Australian Industry Participation under the Australian Government Guide to Regulation the OBPR relied heavily on the Department of Industry’s certification.


24 June 2014

Regulations for Onion Levy Increase – Regulation Impact Statement – Department of Agriculture

On 13 May 2014, as part of revenue measures announced in the Australian Government’s 2014-15 Budget, the Government announced changes to levies and export charges for the onion industry, commencing on 1 July 2014.

The onion industry’s perception is that greater funding is required in order to avoid underinvestment in industry-wide research and development (R&D) and for marketing as well as capturing collective benefits for the onion industry. In addition, the industry considered the National Residue Survey (NRS) onion residue monitoring program no longer provides benefits to all onion growers, particularly those supplying the export markets and should be discontinued.

There were also concerns with existing arrangements regarding biosecurity risk mitigation and funding the costs of the industry’s Plant Health Australia (PHA) membership.

The preferred option is to increase the levy/export charge rate for R&D from $1.60 per tonne to $2.90 per tonne of hard onions, introduce a levy/export charge for marketing at a rate of $1.00 per tonne, decrease the levy/export charge rate for the National Residue Survey from $0.40 per tonne to zero, introduce an Emergency Plant Pest Response (EPPR) levy/export charge set at zero, and introduce a PHA membership levy/export charge set at $0.10 per tonne.

The changes in onion levies and export charges for marketing and R&D will enable the industry to meet its strategic objectives and deliver improved outcomes for the Australian onion industry and consumers. The decrease in the NRS levies will enable onion growers to more efficiently meet their requirements for testing services and quality assurance certification. The proposed PHA levy and export charge would pay the costs of the industry’s PHA membership obligations. The EPPR levy and export charge will enable a mechanism to be in place for the industry to fund its obligations, should an emergency plant pest incident occur. The OBPR has agreed that there are no changes to regulatory costs.

A single-stage Regulation Impact Statement was prepared and certified by the Department of Agriculture and has been assessed as adequate by the Office of Best Practice Regulation under the July 2013 Australian Government best practice regulation requirements in conjunction with the interim RIS process guidance note.


19 June 2014

Proposed reform to strengthen Customer Due Diligence – Regulation Impact Statement – AUSTRAC

On 20 May 2014, the CEO of the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced changes to customer due diligence rules, which form part of Australia’s anti-money laundering and counter-terrorism financing regime.  The regime is intended to protect Australia’s revenue base through enhanced collection and verification of customer information, as well as preventing organised criminals from misusing complex business structures to conceal ownership and controlling interests in entities.

In broad terms, this regime requires that some financial institutions (reporting entities) need to identify and verify each of their customers so they can assess the money laundering or terrorism financing risk posed by each customer, and if necessary take appropriate action.

Under this proposal, key changes to the customer due diligence regime include:

  • expanded requirements for financial institutions to verify beneficial ownership and control in certain circumstances;
  • requirements for reporting entities to consider the risk associated with its customers in the context of the purpose and nature of the business relationship; and
  • expanded record-keeping requirements.

The reforms are expected to: improve tax compliance and money laundering enforcement; stronger fraud prevention arrangements an institutional level; enhanced ability for some small businesses to meet obligations to overseas tax compliance regulators; and minimise commercial risk around assessing beneficial ownership and control.  The reforms are also expected to address any risks associated with Australia being removed from the European Union’s equivalence list.

The proposal has been assessed as having a significant impact on certain sectors of the economy.  These impacts include estimated annual average ongoing compliance costs of around $40 million.

A details-stage Regulation Impact Statement (RIS) was prepared and certified by AUSTRAC and has been assessed as adequate by the Office of Best Practice Regulation.  The OBPR notes that as no decision has been previously announced, an options-stage RIS was not required and a single stage RIS has been prepared.

Note:  If you have difficulty accessing the information in any of these documents, please contact Andrew Rodrigues.

19 June 2014

Regulation for Mushroom Levy Increase – Regulation Impact Statement – Department of Agriculture

On 13 May 2014, as part of revenue measures announced in the Australian Government’s 2014-15 Budget, the Government announced changes to levies for the mushroom industry to commence on 1 July 2014.

The mushroom industry’s perception is that greater funding is required in order to avoid underinvestment in industry-wide research and development (R&D) and for marketing. In addition, the industry has noted that the capacity of the current rate of the marketing and R&D levy to fund priority industry projects has been significantly eroded over the last decade.

The preferred option is to increase the levy rate for R&D from $0.54 per kilogram of mushroom spawn to $1.08 per kilogram, and the levy rate for marketing from $1.62 per kilogram of mushroom spawn to $3.24 per kilogram. This will assist the industry to meet its strategic objectives, including delivering improved outcomes for the Australian mushroom industry and consumers. The Office of Best Practice Regulation (OBPR) has agreed that there are no changes to regulatory costs.

A single-stage Regulation Impact Statement (RIS) was prepared and certified by the Department of Agriculture, and has been assessed as adequate by the OBPR under the July 2013 Australian Government best practice regulation requirements in conjunction with the interim RIS process guidance note.


19 June 2014

Mandatory Code of Conduct for Grain Export Terminals (Bulk Wheat Exports) – Regulation Impact Statement for consultation – Department of Agriculture

On 3 June 2014, the Minister for Agriculture released for consultation an exposure draft mandatory port access code of conduct for bulk wheat exports and an associated Regulation Impact Statement (RIS).
The RIS examines options for improving access to port terminals for bulk wheat exporters. One option is the introduction of a mandatory code of conduct for all port terminal service providers. The code is aimed at standardising access arrangements and improving the transparency of bulk wheat exports. If implemented by 30 September 2014, the code would replace the Wheat Export Marketing Act 2008.
A RIS has been prepared by the Department of Agriculture for consultation, along with the draft code. Submissions on the draft code and RIS close at 5pm on Friday 24 June 2014.
The RIS has been certified by the Department of Agriculture and was subject to an early assessment by the Office of Best Practice Regulation.


6 June 2014

Changing the Schedule for Increasing the Superannuation Guarantee – Regulation Impact Statement – Department of the Treasury

Compulsory superannuation is intended to address myopia – the tendency of people to not save adequately for retirement because it is too far into their future for them to make adequate provision for their needs.

Since 1992, employers have been required to make superannuation contribution for their eligible employees, at a rate set by the Superannuation Guarantee (SG).  The SG is intended to provide for a higher standard of living in retirement than is possible from relying on the age pension alone.

The SG is currently legislated to increase from 9 to 12 per cent in a stepped process which commenced from 1 July 2013 with a 0.25 per cent increase to 9.25 per cent, with a further 0.25 per cent increase scheduled on 1 July 2014.  It is then legislated to increase in increments of half a per cent each year until it reaches 12 per cent on 1 July 2019.

The concessional rate of tax on superannuation contributions means that increasing the SG impacts Government revenues.  The increase in the SG was intended to be funded by the Minerals Rent Resource Tax (MRRT).    While the MRRT was originally expected to raise $26.5 billion by 2016-17, in the first 18 months of operation, the MRRT raised around $435 million on a net basis.

As the MRRT has not raised the revenue expected and is proposed to be abolished, the Government announced that it would pause the increase in the SG rate for two years.  However, this announced policy was opposed in the Senate, giving rise to some business uncertainty as to the legislated minimum rate of superannuation contribution.

The current proposal involves postponing the pause in the increase in the SG rate until 1 July 2015 and then extending the pause from 2 to 3 years.  The proposed delay to the increase in the SG rate is intended to provide greater certainty for affected employers as well as reduce the revenue impacts of the currently legislated schedule for increasing the SG.

Due to rigidities in wage bargaining processes, as well as potential household responses to mandated minimum savings, it is unclear whether the changes to the rate of superannuation contributions will impact on household incomes or savings in aggregate.  The marginal impacts on the rate of the SG on superannuation funds are not thought to be significant.  In addition, since employers were required to adjust the rate of contribution under the status quo and under the proposed options, and provided businesses are given appropriate advance notice of the changes, this proposed option is not understood to have any incremental compliance cost impacts.

The OBPR has found Treasury to be compliant with the RIS requirements.  The RIS was assessed by the OBPR as not consistent with best practice.  In particular, the RIS would have benefitted from a more balanced discussion of the business certainty outcomes under the status quo; as well as the uncertainties associated with household incomes and savings behaviours resulting from the changes.


27 May 2014

Proposal to ban the importation of substances which mimic the effects of illicit drugs

Regulatory Impact Statement – Attorney-General’s Department.

On 6 May 2014, the Attorney-General’s Department released a Regulation Impact Statement for consultation examining a proposal to ban the importation of substances which mimic the effects of illicit drugs. These substances are also known as new psychoactive substances.

The Attorney-General’s Department has raised concerns that new psychoactive substances are not currently a prohibited import, unless they are listed on the criminal code, this allows potentially harmful pyschoactive substances to be legally imported into Australia.

The Attorney-General’s Department invites submissions on the Regulation Impact Statement. Submissions were open until 5pm on Thursday, 22 May 2014.