Commissioned review – improving the efficiency and performance of Victorian
regulators
I, Michael O'Brien MP, Treasurer of Victoria, pursuant to section 4 of the State
Owned Enterprises (State Body - Victorian Competition and Efficiency Commission)
Order ('the Order') hereby direct the Victorian Competition and Efficiency
Commission ('the Commission') to conduct a commissioned review into improving the
efficiency and performance of Victorian regulators.
Background
Victoria has about 60 bodies involved in regulating business. These regulators
employ over 7000 staff, administer around 2.9 million licences, have annual
expenditure of around $1.3 billion and recoup around $575 million through fees.
The Victorian Government’s vision is for Victoria to have the most responsive and
efficient regulatory system in Australia. Where the Government needs to intervene, it
is committed to ensuring regulatory agencies meet Government objectives at the
lowest possible cost to business.
As announced in the 2013-14 Budget Update, the Victorian Government has
committed to undertaking a review focused on improving the efficiency and
performance of Victorian regulators to achieve budget savings of at least $30 million
per year from 2015-16.
This review is being commissioned to identify specific actions to achieve these
savings. It will identify more efficient operating arrangements for the delivery of
regulatory activities, for example, through more streamlined administrative
arrangements. The level of fees and charges applied by regulators to the private
sector will also be examined against enhanced cost recovery principles. In cases
where regulators do not recover cost-reflective fees and charges from businesses,
the review will consider opportunities to do so. This will ensure that sections of the
community that do not benefit from a good or service do not have to bear such
regulatory costs. In cases where regulator efficiencies are identified, the review will
identify where this can be reflected in lower fees and charges.
As well as delivering operational savings for regulators, reforms to improve the
efficiency of regulators’ operations may lead to reduced regulatory burden on
business without undermining regulatory outcomes.
Scope
The review is to be undertaken by the Commission in conjunction with Victoria’s
regulators, with all parties providing resources and staff to the study team where
possible. The study team will identify specific actions to achieve at least $30 million
of annual budget savings from 2015-16 and be led and directed by the Commission.
The review will identify and make recommendations on a number of areas including:
1. Opportunities to improve regulators’ cost recovery arrangements and their
application, including under a revised cost recovery framework being
developed by the Department of Treasury and Finance.
2. Opportunities to improve the efficiency of regulatory processes to reduce both
regulators’ costs and where possible regulatory burdens on business, without
undermining regulatory outcomes.
3. Opportunities to eliminate internal red tape that add unnecessarily to
regulators’ costs.
4. Regulatory reforms to yield cost savings and reduced regulatory burdens on
business and other regulated parties, without undermining regulatory outcomes.
5. Longer-term reform opportunities to improve the efficiency and performance of
Victoria’s regulators.
The review will focus on a first wave of regulators and regulatory areas comprising
Consumer Affairs Victoria, the Victorian Commission for Gambling and Liquor
Regulation, VicRoads and Crown land and natural resource management.
Additional regulatory areas will be included after the first wave, based on the capacity
for additional improvement in either or both of cost recovery and regulatory efficiency
in those regulators.
As part of the review, the Commission is to develop a suite of generic efficiency
indicators that can be used to identify future opportunities to reduce costs and
regulatory burden. These indicators should be clear and meaningful and straightforward to apply through, where possible, use of existing data.
Process
The Commission should take into account existing frameworks used to assess
regulator efficiency and performance and any relevant studies or developments in
Victoria and elsewhere.
The Commission is to consult with relevant Victorian Government departments,
agencies and regulators. Targeted consultation may also occur with regulated
parties.
Public hearings and submissions, issues papers and a draft report are not required.
Timing
The Commission is to provide to me with a final review report by 31 July 2014 or
within 5 months of receipt of the terms of reference [whichever is longer].
Publication of the final study report will be at the Government’s discretion. If
publication is agreed to, it should occur within six months of receipt of the final report.
HON. MICHAEL O’BRIEN MP
Treasurer