13 April 2016

Mandatory Central Clearing of Interest Rate Derivatives

Regulation Impact Statement – Australian Securities and Investment Commission (ASIC)

On 8 September 2015 the Corporations Regulations 2001 were amended by ASIC to mandate that banks centrally clear interest rate derivatives. The impact of this change is that banks will have to put aside more capital to cover potential losses from interest rate derivatives that they deal with.

The problem that ASIC was trying to address was to help Australian banks lower their regulatory burden by creating a compliance scheme for central clearing that would be recognised by US and European regulatory authorities. ASIC estimated the changes will save Australian banks $8.2 million per annum. The other problem ASIC was trying to address was the inability of regulators to assess risks in the derivatives market.

A Regulation Impact Statement (RIS) was prepared and certified by ASIC under the March 2014 Australian Government best practice regulation requirements, and has been assessed as compliant by the Office of Best Practice Regulation. The OBPR advises that the process followed by ASIC and the level of analysis contained in the RIS was consistent with best practice. The RIS estimates the average annual regulatory cost saving at $8.2 million per annum. The OBPR has agreed to the regulatory cost saving.


13 April 2016

Remaking of sunsetting instrument without significant amendments

Department of Infrastructure and Regional Development

The Department of Infrastructure and Regional Development remade the Air Navigation Regulation 1947 without significant amendments on 24 March 2016.

The Air Navigation Regulation 1947 provides a framework for ensuring compliance with bilateral air services arrangements that are made consistent with the Chicago Convention on International Civil Aviation 1944.

Consistent with the Australian Government best practice regulation requirements for sunsetting legislative instruments, the Department of Infrastructure and Regional Development has assessed the operation of this instrument in consultation with affected stakeholders and has certified that the instrument is operating effectively and efficiently.

Therefore, the Office of Best Practice Regulation notes that a Regulation Impact Statement is not required for this instrument to be remade. The instrument was remade with minor amendments to streamline the operation of it. Average annual saving of $59,690 over the next 10 years has been estimated by the Department, consistent with the Government’s RIS requirements.


11 April 2016

Extending GST to imports of digital products and services

Regulation Impact Statement – Department of the Treasury

On 10 February 2016, the Government introduced the Tax Laws Amendment (Tax Integrity: GST and Digital Products) Bill 2015. Among other matters, the Bill extends the application of the Goods and Services Tax (GST) to digital products and services imported by consumers.

Examples of the digital products and services that are currently exempt from the GST include:

  • consultancy, accountancy and legal services;
  • financial and insurance services;
  • telecommunications and broadcasting services;
  • online supplies of software and software maintenance; online supplies of digital content;
  • digital data storage; and
  • online gaming.

The measure introduces a vendor declaration system where overseas vendors will be required to register for, collect and remit GST on the digital services they sell to Australian consumers.

A Regulation Impact Statement (RIS) prepared by the Department of the Treasury has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation.

The RIS estimates the average annual regulatory cost on vendors at about $600,000 per annum. The OBPR has agreed to the regulatory burden estimate and associated offset.


11 April 2016

Trans-Pacific Partnership

Independent Review – Department of Foreign Affairs and Trade

On 9 February 2016 the Government tabled the Trans-Pacific Partnership (TPP) Agreement.

The TPP Analysis of Regulatory Impact on Australia was certified by the Department of Foreign Affairs and Trade 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 Treaty will eliminate barriers to trade and investment in the Asia-Pacific region, facilitate regional supply chains, improve on arrangements with existing free trade agreement partners, and create new preferential trading arrangements with Canada, Mexico and Peru.

Under the Government’s best practice regulation process, a post-implementation review of the TPP Agreement will need to be completed within five years following the implementation of the Agreement as the TPP was assessed by the OBPR to be likely to have a substantial and widespread impact on the Australian economy.

Regulatory savings of $147,000 per annum were agreed with the OBPR.


1 April 2016

Changes to the Fair Work Act 2009

Post-implementation Review – Department of Employment

In February 2013, the then Government announced a number of changes to the Fair Work Act 2009. A Regulation Impact Statement (RIS) was required for the changes, but the then Prime Minister granted an exemption to the department from the RIS requirements on the basis of exceptional circumstances. As a result, under the government’s best practice requirements, the Department of Employment was required to complete a post-implementation review (PIR).

A PIR has been prepared for the changes included in the Fair Work Amendment Act 2013 that came into effect in July 2013. The changes:

  • provide that taking special maternity leave does not reduce an employee’s entitlement to unpaid parental leave;
  • for concurrent unpaid parental leave, increased the maximum period of leave from three to eight weeks; allowed parents to choose when they want to take the leave in the twelve months after the birth of the child; and allowed the leave to be taken in separate periods of at least two weeks unless otherwise agreed by the employee;
  • provided pregnant employees with less than 12 months service the right to transfer to a safe job; and
  • expanded the categories of employees who can request flexible working arrangements.

The PIR concludes that these mostly technical in nature changes did not have a material regulatory impact on business, but found that the changes likely resulted in a small net benefit to the community.

The PIR estimates the average annual regulatory cost at approximately $44, 367 per year. The OBPR has agreed to the estimate.


31 March 2016

Free Range Egg Labelling

COAG Decision Regulation Impact Statement – Consumer Affairs Australia and New Zealand

On 31 March 2016, Consumer Affairs Ministers agreed to the introduction of a new information standard requiring eggs labelled as ‘free range’ to have been laid by hens with meaningful and regular access to the outdoors, with an outdoor stocking density of 10,000 hens per hectare or fewer.

The information standard will also require producers to prominently disclose the outdoor stocking density of hens laying free range eggs, allowing consumers to easily compare the practices of different egg producers. Amendments to the Australian Consumer Law will also provide complying egg producers with a safe harbour from claims of misleading and deceptive conduct in relation to free range claims.

Consumer Affairs Australia and New Zealand on behalf of Consumer Affairs Ministers prepared a COAG Decision Regulation Impact Statement (RIS). The COAG Decision RIS was approved by the OBPR.


31 March 2016

Increasing Choice in Home Care

Regulation Impact Statement – Department of Health

On 11 February 2016, the Minister for Aged Care introduced the Aged Care Legislation Amendment (Increasing Consumer Choice) Bill 2016 to give effect to the first stage of the home care reforms announced in the 2015-16 Budget.

Under the changes funding for subsidised home care will follow the consumer, rather than the provider. The effect of the changes is that individuals will have greater choice of home care provider and increased flexibility to change providers.

The main changes for home care providers are:

  • Providers will no longer need to apply for and hold allocated home care places;
  • Processes for becoming an approved provider will be simplified; and
  • Providers will be required to transfer unspent funds where a consumer changes provider and return unspent funds when the consumer leaves home care.

The Office of Best Practice Regulation (OBPR) assessed the Regulation Impact Statement (RIS) prepared by the Department of Health as compliant but not best practice. To be best practice the RIS needed to more fully demonstrate the nature of the problem, provide a broader scope of analysis of impacts and detail the practical impacts of the changes.

The RIS estimates the average annual regulatory cost saving at $4.5 million a year. The OBPR has agreed to the regulatory cost saving.


31 March 2016

Access to cannabis for medical and scientific purposes

Regulation Impact Statement – Department of Health

On 10 February 2016 the Minister for Health announced amendments to the Narcotic Drugs Act 1967 to enable the cultivation of cannabis for medicinal and scientific purposes consistent with Australia’s international obligations while facilitating the production of medicinal cannabis products for clinical trials and for specified patients under clinical care in accordance with the Therapeutic Goods Act 1989.

The measures provide for the establishment of a Commonwealth licensing scheme to facilitate the right to cultivate cannabis for medicinal and scientific purposes.

The Office of Best Practice Regulation assessed the RIS prepared by the Department Health as compliant with the Government’s requirements but not best practice. To achieve best practice more detailed analysis of the practical impacts of the measure and more extensive consultation was required.

The RIS estimates the average annual regulatory cost of the proposal to be $407,000. The OBPR has agreed to the regulatory costs.


30 March 2016

Regulation Impact Statement certification authority delegated

Department of Foreign Affairs and Trade

On 31 December 2015, The Department of Foreign Affairs and Trade (DFAT) wrote to the Office of Best Practice Regulation (OBPR), advising the authority to certify Regulation Impact Statements (RISs) will be delegated to First Assistant Secretary-level officers in DFAT and DFAT’s portfolio agencies.

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) will be published on the OBPR website.


30 March 2016

Proposal to increase energy efficiency of air conditioners and chillers

COAG Consultation Regulation Impact Statement – Equipment Energy Efficiency Programme

On 4 February 2016, the Department of Industry, Innovation and Science released a Council of Australian Governments (COAG) Consultation Regulation Impact Statement (RIS) on behalf of the Energy Council’s Equipment Energy Efficiency (E3) Programme. The Consultation RIS examines options to improve the energy efficiency of air conditioners and chillers.

The Consultation RIS considers policy changes including the introduction of a ‘zoned’ energy rating label, harmonisation of Minimum Energy Performance Standards and regulations, and the inclusion of single duct portable air conditioners in the E3 Programme. Feedback is sought on the Consultation RIS including responses to some or all of the questions posed.

The Consultation RIS was prepared by the Department of Industry, Innovation and Science and has been approved by the OBPR.

The consultation period closes on 18 March 2016.