“ The importance of good regulatory practice ” Stephen Cull, Office of Best Practice Regulation July 2013

1. “The importance of good regulatory practice”Stephen Cull, Office of Best Practice RegulationJuly 2013

2. What is “good” regulatory practice? Office of Best Practice Regulation In Australia, good regulatory practice involves integrating regulatory impact analysis (RIA) into policy development and decision-making. For regulatory proposals, agencies are required to prepare a Regulation Impact Statement (RIS) – which is assessed by the Office of Best Practice Regulation RISs are designed to inform (not bind) regulatory policy decisions by government Once a decision has been announced, RISs are made public, to provide transparency, and accountability on decision-makers

3. RIA promotes evidence-based policy Office of Best Practice Regulation Provides an approach and framework for identifying, assessing and communicating relevant information to decision-makers • Ideally applied early in the policy development process Promotes consultation, and timely engagement, with business and other stakeholders Encourages thinking and impact analysis in ‘net community’ terms – all relevant costs and all relevant benefits, across the economy Makes provision for urgent/unforeseen issues (e.g., through exemptions from RIS requirements)

4. RISs help to inform policy decisions Office of Best Practice Regulation Present the best available evidence for a particular proposal (commensurate with its importance and likely impacts) Provide the views of stakeholders on key aspects of the proposal – including any opposing views or concerns about timeframes etc. Require quantification of costs and benefits, supplemented by qualitative descriptions and broader policy narratives Allow decision-makers to understand the economic implications and expected consequences of different policy options, including non-regulatory options

5. The end goal: higher productivity Office of Best Practice Regulation RISs are an important means to achieve this outcome. They focus attention on: compliance costs on business and others impacts on competition the prospect of unintended consequences the distributional effects A good RIS recommends an approach that is effective at addressing an identified problem, and efficient in terms of maximising the benefits at least cost

6. RISs provide an accountability mechanism Office of Best Practice Regulation Transparency is one of the main pillars of our RIA system (along with sound analysis and informed decision-making) Once an announcement has been made, RISs are published; and the public can access the RISs from a central register The public get the same information seen by decision-makers (subject to national security or commercial-in-confidence material being removed) Along with other accountability mechanisms, RISs can help to stimulate discussion and debate on public policy issues

7. The wider context Office of Best Practice Regulation RIS requirements were introduced as part of a broader programme of economic and regulatory reform, starting in the 1980s and continuing today There are broader efforts to manage the total stock of regulation (e.g., through ‘sunsetting’ requirements) Regulatory arrangements are guided by the OECD’s principles; and are subject to regular review Regulations can have a direct and indirect impact on trade and competitiveness

8. Summing up Office of Best Practice Regulation In Australia, good regulatory practices: provide a way to test whether good ideas can be translated into good policy provide a way to identify, and quantify, the economic, social and environmental impacts of proposals complement (or buttress) previous economic reforms and related policy objectives on productivity do not interfere with the authority of government and other decision-makers

9. Thank you • www.finance.gov.au (Department of Finance and Deregulation) • http://ris.finance.gov.au/ (OBPR RIS register)