Victorian Government response
to the Victorian Competition
and Efficiency Commission’s
Final Report
March 2012
Strengthening foundations for the next decade:
An inquiry into Victoria’s regulatory framework
The Secretary
Department of Treasury and Finance
1 Treasury Place
Melbourne Victoria 3002
Australia
Telephone: +61 3 9651 5111
Facsimile: +61 3 9651 5298
www.dtf.vic.gov.au
© Copyright State of Victoria 2012
This book is copyright. No part may be reproduced by any process except in accordance with
the provisions of the Copyright Act 1968.
ISBN 978-1-921831-95-9
Published February 2012.
If you would like to receive this publication in an accessible format please telephone
9651 0909 or email mailto:information@dtf.vic.gov.au
This document is also available in PDF format at www.dtf.vic.gov.au
ii
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Contents
1.
Foreword ........................................................................................................ 1
2.
Abbreviations .................................................................................................. 2
3.
Glossary .......................................................................................................... 3
4.
Overview ......................................................................................................... 4
Attachment: Response to VCEC recommendations .................................................... 5
Recommendation 2
Recommendation 3
Recommendation 4
Recommendation 5
Recommendation 6
Recommendation 7
Recommendation 8
Improving the regulatory management system ............................................. 5
Optimising impact assessment ....................................................................... 9
Achieving consistent implementation .......................................................... 16
Building excellence in administration and enforcement .............................. 18
Embedding evaluation and review ............................................................... 21
Reducing regulatory burden on business ..................................................... 23
Regulation in a federation ............................................................................ 24
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
iii
iv
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
1.
Foreword
For Victoria’s prosperity and growth to be strong and sustained, Victorian businesses need
to be able to effectively compete in both national and international markets.
A best practice regulatory framework is a key requirement for enabling businesses and the
not-for-profit sector to operate efficiently.
In addition, in order to encourage businesses to locate in Victoria, it is important that our
regulatory environment is one that minimises the regulatory burden by not being excessive,
by not intruding into areas where market incentives will provide the best outcomes, and by
being transparent and consistent.
Importantly, the regulatory environment must also ensure that community interests are
protected.
The Coalition Government’s commitment to cut red tape by 25 per cent by July 2014 is a key
part of the Government’s responsible economic and fiscal agenda to grow Victoria’s
economy through greater productivity, increasing business investment, the generation of
new jobs and the growth of Victoria’s exports.
The Red Tape Reduction Strategy will increase Victoria’s competitiveness, reduce business
costs, generate jobs, encourage innovation and assist to contain the cost of living pressures.
The Victorian Competition and Efficiency Commission’s Inquiry into Victoria’s regulatory
framework has received significant input from business and the not-for-profit sector.
The Government concurs with both the level of importance placed by the Commission on
the role of regulation in influencing economic and wider community activity and the need to
continuously strive to improve regulatory processes and outcomes.
This Government is committed to establishing a regulatory regime in Victoria that supports,
rather than, hinders business and community activity. The findings of this inquiry provide a
strong basis for further actions towards achieving this objective.
Part two of this inquiry and the findings of the Independent Review of State Finances will
continue to inform the Government’s Red Tape Reduction Strategy.
KIM WELLS MP
Treasurer
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
1
2.
2
Abbreviations
BIA
Business Impact Assessment
COAG
Council of Australian Governments
RIS
Regulatory Impact Statement
SLA
Subordinate Legislation Act 1994
VCEC
Victorian Competition and Efficiency Commission
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
3.
Glossary
Administrative
costs
Costs incurred by business to demonstrate compliance with regulation.
Business Impact
Assessment
A report, usually prepared for Cabinet consideration, which assesses the costs
and benefits of primary legislation proposals that have potentially significant
effects for business and/or competition in Victoria.
Delay costs
Costs incurred by businesses while waiting for regulatory approvals. These
includes standby costs (capital and labour down time) and holding costs
(interest on loans, rent, material procurement, builder contract costs,
additional consultancies, and lost business opportunities), and may also
include costs from not being able to deliver on time.
Planning scheme
A statutory document that sets out objectives, policies and provisions relating
to the use, development, protection and conservation of land in the area to
which it applies. Each municipality in Victoria has its own planning scheme.
Regulatory Impact
Statement
A publicly released report that assesses the costs and benefits of subordinate
legislation proposals that may impose a significant economic or social burden
on a sector of the public.
Substantive
compliance costs
Costs incurred by businesses to achieve compliance with regulation.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
3
4.
Overview
In its Inquiry into Victoria’s Regulatory Framework, the Victorian Competition and Efficiency
Commission has made a total of 42 recommendations under the areas of:
 improving the regulatory management system;
 optimising impact assessment;
 achieving consistent implementation of regulation;
 building excellence in administration and enforcement;
 embedding evaluation and review;
 reducing the regulatory burden on business; and
 regulation in a federation.
In its response to the Commission’s Inquiry, the Victorian Government:
 supports 15 recommendations in full;
 supports 20 recommendations either in principle or in part, with a further four
recommendations subject to further review; and
 does not support three recommendations.
In implementing its response to the Commission’s inquiry, the Government will develop a
stronger and more focused whole of government framework for ensuring that regulation together with its administration and enforcement - occurs in a culture of continuous
improvement that incorporates:
 improved consultation and stakeholder input in policy development;
 a stronger emphasis on identification and development of non-regulatory and marketbased approaches as an alternative to more traditional forms of regulation;
 a regulator performance framework to improve regulator governance, performance
management and accountability; and
 improved evaluation of regulatory outcomes.
This framework will support the Government’s commitment to reduce red tape by
25 per cent by July 2014 and place Victoria in a strong position for sustained efficiency and
productivity improvements into the future.
4
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Attachment: Response to VCEC recommendations
Recommendation 2
Recommendation 2.1
Improving the regulatory management system
That the Victorian Government issue a statement of its overall
regulatory policy, to set out clearly what it wants to achieve through
regulatory reform and how those objectives should be achieved. The
regulatory policy statement would cover:
 the policy objective
 principles to guide the behaviour of those responsible for achieving
the objective
 responsibilities of key agencies.
Response
Support
The Government supports having an explicit and consistent policy to
pursue high quality regulation across government.
The Coalition Government’s Red Tape Reduction Strategy will address:
 reducing the burden of the existing stock;
 gate keeping measures to manage the flow of new regulation; and
 Ministerial accountabilities.
This will be supported by revisions to the Victorian Guide to
Regulation (VGR).
Recommendation 2.2
That the Regulatory Policy and Performance Unit review the
characteristics of good regulatory systems in the Victorian Guide to
Regulation, to ensure that they provide consistent guidance for the
operation of Victoria’s overall regulatory management system and for
its various components. That the Regulatory Policy and Performance
Unit expand the Victorian Guide to Regulation to include Victorian
Government guidance on its expectations across the regulatory life
cycle.
Response
Support
Based on reviews of best practice regulatory development, emphasis
will be placed on ensuring:
 early and meaningful stakeholder consultation;
 regulatory approaches that are proportionate, with the ‘default’
position of adopting non-regulatory options to achieve policy
objectives;
 regulation is administered and enforced to minimise administrative
and compliance costs; and
 promotion of evaluation and a culture of continuous improvement.
DTF will consult further with agencies/regulators in revising the
guidance in the VGR.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
5
Recommendation 2.3
That the Victorian Government establish a Minister for Regulatory
Reform, at a senior minister level, who is accountable for maintaining
and improving Victoria’s regulatory management system.
Response
Support in part
The Government acknowledges the importance of strong governance
and clear accountabilities for regulatory policy at a Ministerial level.
The Government’s framework of Ministerial regulatory governance
involves:
 all Ministers being responsible for achieving the red tape reduction
program and ensuring that the regulation they administer achieves
regulatory objectives with the lowest possible burden being
imposed on businesses, the not-for-profit sector and the
community; and
 the Treasurer having responsibility for whole-of-government
coordination of, and reporting on, regulation reform and the
Government’s red tape reduction program.
DTF will play a coordinating role at a departmental level.
Recommendation 2.4
That the Minister for Regulatory Reform develop, for the approval of
Cabinet, an accountability framework, addressing clear and explicit
roles and accountabilities for the following processes in Victoria’s
regulatory management system:




designing new regulations
implementing regulations
administering and enforcing regulation
evaluating existing regulations.
This accountability framework would incorporate such
recommendations from this report that are supported by the
Victorian Government.
Response
Support in part
Refer to response to Recommendation 2.3.
Recommendation 2.5
That the:
 Victorian Government clarify its priorities for, and encourage
improvement in, Victoria’s regulatory management system by
publishing annually the outcomes it is seeking from the system
(and the matters covered in Recommendation 2.1) and its strategy
for improving it
 Minister for Regulatory Reform report annually to Parliament on
the progress of the regulatory reform agenda, including
improvements to the regulatory management system.
Response
Support in part
The Government supports regular public reporting on its priorities and
progress in improving regulatory outcomes in Victoria.
The Government will undertake appropriate reporting to Parliament
on its red tape reduction program through existing reporting
frameworks.
6
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 2.6
That the:
 Minister for Regulatory Reform be responsible for monitoring and
advising Cabinet on the effectiveness of coordination of regulatory
effort across different portfolios
 relevant portfolio ministers be responsible for coordinating effort
among agencies within their portfolios.
Response
Support in part
Refer to response to Recommendation 2.3.
Recommendation 2.7
That, to build support for and understanding of the regulatory
management system and improvement processes, the Minister for
Regulatory Reform, lead the promotion of regulatory reform on behalf
of the government, encouraging participation from across the
community.
Response
Support in part
Refer to response to Recommendation 2.3.
The Government will facilitate more centralised arrangements to
enhance accessibility of businesses to the regulatory reform process.
The Treasurer will report regularly on the implementation of the
Government’s Red Tape Reduction Strategy.
Recommendation 2.8
That:
 the Minister for Regulatory Reform report on the adequacy of
training for roles in Victoria’s regulatory management system
 ministers are accountable for ensuring attention is given by
portfolio agencies to the effectiveness of training and capability
development for policy officers responsible for developing
regulation and regulators in the minister’s area of portfolio
responsibility.
Response
Support in part
The Government acknowledges that training and capability
development is important. While this is primarily the responsibility of
portfolio Ministers, the VCEC also plays a key role through its
provision of detailed training workshops to departmental policy
officers on undertaking impact assessments. The VCEC also provides
tailored support to departmental policy officers preparing RISs and
BIAs, as required.
The Government considers that overall effectiveness of training can
be monitored through broader regulatory performance measures,
including the existing VCEC Annual Report measures on the quality of
analysis in RISs.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
7
Recommendation 2.9
That the Regulatory Policy and Performance Unit, with the Office of
the Chief Parliamentary Counsel, undertake a cost benefit analysis of
the options for increasing accessibility to legislation; for example, by
extending the existing electronic database of Acts and statutory rules
to include legislative instruments.
Following the cost benefit analysis, the Regulatory Policy and
Performance Unit and the Office of the Chief Parliamentary Counsel
publish their intended response to improve the accessibility of
regulation in Victoria.
Response
Support
The Government agrees with the principle of increasing accessibility
to legislative instruments and will undertake a cost benefit analysis of
options for achieving this.
Given the large number of legislative instruments, options to be
considered as part of this analysis will include alternative means to
extending the existing electronic database, such as linking up the
central legislation site with regulator sites (which would contain
relevant legislative instruments).
The Government also notes improvements already underway,
including the requirement for publication of consolidated legislative
instruments from 1 January 2013.
8
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 3 Optimising impact assessment
Recommendation 3.1
That, to encourage greater integration of policy development and
impact assessment:
 the Regulatory Policy and Performance Unit establish and support a
community of practice on impact assessment and policy
development and begin a review of its effectiveness 18 months
after the community of practice is established
 the State Services Authority and/or the Australia and New Zealand
School of Government encourage training on integrating impact
assessment processes into policy development.
Response
Support in principle
The Government recognises the need for strong cross-government
capacity in best practice regulation.
DTF has established a network of regulatory officers to coordinate the
Government’s Red Tape Reduction Strategy. DTF will utilise this
network, supported by the rewrite of the Victorian Guide to
Regulation to ensure there is support across government for best
practice regulatory impact assessment.
The Government will review the effectiveness of these arrangements.
Recommendation 3.2
That the Department of Treasury and Finance identify specific areas in
which market-based instruments may be appropriate, and work with
relevant departments to investigate, develop, test and implement
market based solutions in those identified areas.
That:
 the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to include criteria, developed by the
Department of Treasury and Finance, to guide departments as to
whether, and how, market-based instruments are potentially
applicable to their business impact assessments or regulatory
impact statements
 the amendment to the Victorian Guide to Regulation recognise the
different roles of supporting legislation needed to give effect to
market based approaches.
Response
Support
Consistent with its regulatory reform focus and red tape reduction
program, the Government supports the use of non-regulatory
approaches, including market-based instruments (MBIs) as a means of
efficiently meeting policy objectives. The Government also agrees
with VCEC’s proposal that DTF, with its experience in developing MBIs,
work with departments to identify areas that offer the greatest
potential for non-regulatory approaches.
The Government will also release guidance on best practice regulatory
design. This will include practical guidance on assessing the feasibility
of non-regulatory solutions that make more effective use of market
incentives.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
9
Recommendation 3.3
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to include additional guidance on:
 the determinants of a proportionate analysis for regulatory impact
statements and business impact assessments
 how to undertake cost-effectiveness and/or break-even analysis for
proposals for which the benefits are difficult to monetise
 how to apply multi-criteria analysis, including when it is
appropriate to use this tool, the selection of appropriate criteria,
and the standard of analysis required.
Response
Support
The Government will release detailed guidance on best practice
regulatory design.
Recommendation 3.4
That the Victorian Government initiate and publish:
 a follow-up independent review of the impact assessment process
in five years
 regular independent reviews thereafter, possibly every five to
10 years
 annual ‘desk top’ reviews of the performance of the impact
assessment process. Annual reviews should be conducted by the
Victorian Competition and Efficiency Commission in conjunction
with the Department of Treasury and Finance.
Response
Support
The Government supports continuous improvement of the impact
assessment process through regular review, including annual desktop
reviews of the impact assessment process.
DTF and the VCEC will review and update quality measures to enable
performance trends in impact analysis assessment to be reported in
VCEC annual reports.
Recommendation 3.5
That the Victorian Government amend the Subordinate Legislation Act
1994 so that:
 the list of criteria in section 12F be expanded to include a public
interest criterion that is clearly defined
 instruments can only be prescribed as exempt if they meet one of
the criteria for exemption specified in section 12F of the Act.
Response
Not support
The Government does not agree to extending the list of exemption
criteria in section 12F of the Subordinate Legislation Act 1994 to
include the public interest criterion.
In preparing the Subordinate Legislation (Legislative Instruments)
Regulations 2011, the government considered a range of criteria,
including a public interest criterion, in determining which instruments
would be prescribed as exempt. The Regulations were made following
extensive consultation across government, which enabled a whole of
government perspective to be considered.
Such a criterion would be difficult to define and implement under
section 12F in a way that ensures its limited and consistent application
across all portfolio areas. To ensure appropriate application, any
power that allows exemptions in the public interest best rests with
the Premier, as the Minister responsible for the Subordinate
Legislation Act.
10
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 3.6
That the Minister for Regulatory Reform complete, by 2016, a public
review of the Subordinate Legislation (Legislative Instruments)
Regulations 2011 (Vic), examining the effectiveness of the
Regulations, including testing the appropriateness of the instruments
prescribed (or not prescribed), and the basis on which they have been
prescribed.
That the emphasis of the review be on instruments that have been
prescribed on public interest grounds (particularly in light of any
further guidance provided on the tests to be applied), instruments
prescribed on the basis of RIS-equivalent or national processes, and
instruments about which stakeholders have raised concerns.
That the review report explain the criteria used and the reasons for
deciding whether or not individual instruments should be prescribed.
Response
Support
The Government will monitor and review the Subordinate Legislation
(Legislative Instruments) Regulations 2011, within four years of its
implementation. The findings of this review will be made public.
As discussed in the RIS that was prepared for the Regulations1 , the
review will encompass all exempt instruments and their
corresponding criteria, particularly the public interest and RISequivalent criteria, as well as concerns raised previously by
stakeholders.
Recommendation 3.7
That the Victorian Government amend the Subordinate Legislation Act
1994 (Vic) to bring into the Act’s framework, planning scheme
amendments that have significant state-wide or regional impacts.
Response
Support in principle
The Government supports the importance of undertaking adequate
analysis and scrutiny of significant planning scheme amendments.
The Government will investigate whether the Subordinate Legislation
Act should be amended or an alternative method implemented, given
overlapping requirements under the Subordinate Legislation Act and
the Planning and Environment Act 1987, to ensure that economic and
other impacts of significant planning scheme amendments are
adequately assessed and scrutinised. The investigation will consider a
RIS or RIS equivalent process that includes:
 an analysis of costs and benefits, including consideration of
alternative options for achieving the regulatory goal;
 the analysis being independently assessed; and
 a public consultation period of at least 28 days.
1
DPC, 2011. Subordinate Legislation (Legislative Instruments) Regulations 2011 Regulatory Impact Statement.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
11
Recommendation 3.8
That the Victorian Government amend the Subordinate Legislation Act
1994 (Vic) to remove the exemption from the regulatory impact
statement process of statutory rules and legislative instruments that
only impose a significant burden on a public sector body. That the
Premier amend the Guidelines to the Subordinate Legislation Act to
set out criteria for RIS-equivalency. These criteria should include that
to be RIS-equivalent the analytical document prepared for a legislative
instrument must:
 include an analysis of the nature and extent of the problem being
addressed and an assessment of the options, including costs and
benefits
 be subject to an independent assessment advising of the adequacy
of the analysis
 be subject to a structured consultation process, of no less than
28 days, including public release of an exposure draft of the
instrument.
Response
Support in part
The Subordinate Legislation Act 1994 Guidelines released on
1 July 2011 provide that the three recommended requirements must
be met in order for a legislative instrument to meet the RIS-equivalent
process criterion.
The Government does not support removing the exemption for
legislative instruments that impose a significant burden on a public
sector body2 .
The legislative instruments intended to be captured by the
amendments to the Subordinate Legislation Act and subject to a RIS
process are those which have an impact on the broader public. As per
the Subordinate Legislation Act Guidelines, consultation across
Government must be undertaken in relation to instruments exempted
under this criterion. However, to conduct a public RIS consultation
process for instruments which do not affect the public would be costly
and of limited benefit.
Further, as the exemption came into effect on 1 July 2011, it would be
premature to make further changes to the Subordinate Legislation Act
at this time.
Recommendation 3.9
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to clarify that a minister may seek advice from
the Victorian Competition and Efficiency Commission to inform his or
her department’s preliminary view on whether statutory rules and
legislative instruments that are not prescribed may qualify for
exemption. Accountability for the final decision would remain with
the minister.
2
There is no specific exemption provision for statutory rules that only impose a significant burden on a public
sector body contained within the SLA.
12
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Response
Support
The Government supports early consultation with VCEC in
determining a statutory rule or legislative instrument’s eligibility for
an exemption. The Government considers that the VCEC is well placed
to provide this advice due to its experience in assessing the adequacy
of RISs.
Recommendation 3.10
That the Premier amend the Guidelines to the Subordinate Legislation
Act 1994 (Vic) to require that the Victorian Competition and Efficiency
Commission’s assessment letters:
 are published at the same time as the regulatory impact statement
 include comment on whether the VCEC believes it is likely that the
costs of the proposed statutory rule or legislative instrument will
exceed its benefits, in addition to noting gaps in the data and
analysis.
That departments be required to provide the Commission’s
assessment letter to ministers, where regulatory proposals are
considered by Cabinet before public release of the Regulatory Impact
Statement.
That, where a proposal is considered by Cabinet before a Regulatory
Impact Statement has been completed, the Commission’s comments
on the most recent draft of the Regulatory Impact Statement be
provided to Cabinet.
Response
Support in part
The Government supports the recommendation that all VCEC
assessment letters be published with the RIS in the interests of
transparency. In addition, the Government supports VCEC assessment
letters being provided to Ministers and VCEC comments on draft RISs
being provided to Cabinet, where relevant.
However, the Government does not support the recommendation
that the VCEC include an assessment of whether it considers the costs
will exceed the benefits of a policy proposal. The VCEC assessment
should focus on ensuring that the requirements of the VGR have been
met.
Recommendation 3.11
That the Premier amend the Guidelines to the Subordinate Legislation
Act 1994 (Vic) to provide greater guidance on the level of consultation
expected prior to the preparation of a Regulatory Impact Statement,
including that:
 a preliminary consultation document be required for interventions
with large and/or complex impacts
 preliminary consultation about a proposed statutory rule cover
consideration of the problem that needs to be addressed and
indicate a range of possible options, without indicating the
preferred option
 the Regulatory Impact Statement summarise the additional options
proposed by stakeholders and explain why any options that were
presented in the preliminary consultation document but not
assessed in the Regulatory Impact Statement were considered
infeasible
 the Commission consider the adequacy of the preliminary
consultation or preliminary consultation document as part of its
assessment of the Regulatory Impact Statement.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
13
Response
Support in part
The Government supports the use of consultation documents and
that preliminary consultation should cover a range of possible
options. The current Subordinate Legislation Act Guidelines, released
on 1 July 2011, include a substantial update to the guidance for
consultation, including preliminary consultation. The Government
considers that this largely addresses the issues raised by the VCEC.
Further changes to the guidelines in respect of VCEC’s findings will be
considered in the next review of the SLA Guidelines.
The Government supports, where preliminary consultation occurs,
that stakeholder views are summarised in the RIS with an explanation
as to why they were not considered feasible. The VGR requires that
where consultation has occurred, a statement must be included in the
RIS that details who was consulted and a summary of their views.
The Government does not support a separate VCEC assessment of the
adequacy of the preliminary consultation. However, departments will
be encouraged, through the Subordinate Legislation Act Guidelines, to
discuss preliminary consultation with the VCEC to help determine the
appropriate level of consultation for a particular proposal.
Recommendation 3.12
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to include a requirement that regulatory impact
statements and business impact assessments be accessible to broad
and non-technical audiences through measures including:
 a one page pro forma summary sheet
 the executive summary being accessible to non-technical audiences
as a stand-alone document, with technical analysis in attachments.
That the amendment also requires that submissions made during the
consultation period on the Regulatory Impact Statement be
published, with appropriate safeguards for genuinely confidential
information.
Response
Support in part
The Victorian Government supports the intent of making the
information in impact assessments undertaken for RISs easier to
understand and more accessible. Current guidance on executive
summaries will be reviewed to ensure such information is accessible
and requires a pro-forma summary sheet.
The Government will consider options for ensuring that the economic
impacts of significant legislative proposals brought to Cabinet are
clearly set out.
Recommendation 3.13
That the threshold for regulatory impact statements and business
impact assessments be the same; namely, when proposed primary or
subordinate legislation is expected to impose ‘a significant economic
or social burden on a sector of the public or government’.
Response
Under review
The Victorian Government supports underpinning policy proposals
with rigorous analysis that justifies the need for regulatory
intervention and the associated costs. The Government will consider
options for ensuring that the analysis of significant legislative
proposals brought to Cabinet is conducted by departments to a
consistent and appropriate standard for informed decision-making.
14
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 3.14
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to:
 apply the same grounds for exemption to business impact
assessments as apply to regulatory impact statements
 replace the term ‘business impact assessment’ with a more generic
term, such as ‘impact assessment’ or ‘legislative impact
assessment’.
Response
Under review
Refer to response to Recommendation 3.13.
Recommendation 3.15
That Ministers publicly release business impact assessments for which
they are responsible along with the Commission’s final assessment
letter no later than when legislation is introduced into Parliament.
Response
Under review
Refer to response to Recommendation 3.13.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
15
Recommendation 4 Achieving consistent implementation
Recommendation 4.1
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation by January 2012 to provide guidance on the
essential aspects of implementation to be considered in impact
assessments, including:
 aspects of regulatory design that impact on how the regulation can
be implemented, administered and enforced
 clear accountability between the responsible regulator and
department for implementation
 a strategy for monitoring the implementation of the regulation.
Response
Support
The Government will release detailed guidance on best practice
regulatory design, implementation and evaluation.
Recommendation 4.2
That the Regulatory Policy and Performance Unit develop ‘good
practice’ guidance on implementing regulatory changes by January
2012, including:
 when comprehensive implementation plans are needed
 mechanisms to facilitate a smooth transition to a new regulatory
approach, and criteria for their use:
–
–
–
providing guidance and training to regulated parties
grandfathering existing requirements
using transitional periods between the making of
regulation and its commencement
 monitoring implementation, including:
– using stakeholder reference groups to monitor how the
regulation is working (and identify risk and uncertainty).
To supplement and support the good practice guidance, the
community of practice for regulation share experience and lessons
learned.
Response
Support
The Government will adopt this recommendation with an alternative
implementation approach.
The Government will release detailed guidance on best practice
regulatory design, implementation and evaluation.
Recommendation 4.3
That for regulations with significant implementation considerations
(defined in the Victorian Guide to Regulation), responsible
departments and agencies jointly develop an implementation plan, in
close consultation with regulated parties.
In the implementation plan, responsible departments and agencies
would certify their agreement that:
 the designed regulations appear feasible to implement, given the
anticipated resources
 possible implementation risks, and their impacts, have been
identified.
16
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Response
Support in principle
The Government supports that design and implementation of
significant regulation be undertaken:
 in close collaboration between policy departments and regulatory
agencies; and
 in consultation with regulated parties.
As discussed under Recommendations 4.1 and 4.2 above, the
Government will release detailed guidance on best practice regulatory
design, implementation and evaluation. As part of that process,
consideration will be given to the merits of certifying implementation
plans.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
17
Recommendation 5 Building excellence in administration and
enforcement
Recommendation 5.1
That Ministers issue a Statement of Expectations for each regulator in
accordance with Improving Governance of Regulators: Principles and
Guidelines, that includes an explicit requirement that regulators
establish and publish timelines for regulatory and approval processes.
That Victorian regulators, in general:
 include target or expected time limits for approval processes in
their corporate plans
 advise applicants about the target or expected time to process
their applications
 collect timeliness measures relating to their regulatory or approval
processes
 report these measures in annual reports.
Response
Support
Administration and enforcement of regulation is a key area of the
Government’s regulatory reform and Red Tape Reduction Strategy.
The Department of Treasury portfolio will develop model contents for
Ministers’ Statements of Expectations. These will include timeliness
targets for regulatory and approval processes.
In addition, these Statements will require regulators to have in place
monitoring and assurance regimes for ensuring their regulatory
objectives are being met.
To help ensure a consistent approach, Ministers will provide draft
Statements of Expectations to the Treasurer.
The timing of this work will be planned so as to ensure Statements of
Expectation are in place for an initial tranche of regulators by the end
of 2012 and for all remaining regulators by July 2013.
Measures in Ministers’ Statements of Expectations will be integrated
into regulators’ strategic and corporate planning processes and
performance against key performance indicators included in annual
reports.
Recommendation 5.2
That the Minister for Regulatory Reform encourage industry
associations to:
 develop and conduct regular, statistically valid surveys of business
and not-for-profit perceptions of regulatory burdens
 provide specific information regarding regulatory burdens to the
Regulatory Policy and Performance Unit.
Response
Support in principle
The Government acknowledges the importance of facilitating
effective business feedback to regulators on their performance.
Rather than a role for the Minister for Regulatory Reform, it is
intended that Ministers’ Statements of Expectations for regulators
will, where appropriate, include the development and maintenance of
stakeholder engagement forums at a regulator level that are both
effective and efficient in terms of enabling meaningful input without
being onerous for stakeholders.
18
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 5.3
That portfolio ministers, through establishing portfolio-based fora,
encourage their regulators to share experiences and build capability.
The arrangements should be established by June 2012.
That the Victorian Government establish a community of practice for
regulators with links to these portfolio fora, to accelerate diffusion of
good practice and build professional capability among regulators,
sponsored by the Regulatory Policy and Performance Unit.
Should the Victorian Government decide that the Regulatory Policy
and Performance Unit not be the sponsor, it would still be a member
of the community of practice.
Response
Support
The Government recognises the potential leverage to be gained in a
cost effective manner from cross-regulator dialogue and pooling of
experience and information, in areas such as risk-based regulation.
The relevant area within the Treasury portfolio (see Recommendation
5.5) will develop options for the establishment of a community of
practice across regulators, with the proposed arrangement to be
considered by July 2012.
Recommendation 5.4
That Ministers and agencies assess regulators’ compliance with the
Improving Governance of Regulators: Principles and Guidelines within
12 months, and incorporate actions to address assessed gaps in
compliance in their business plans.
That progress on improving governance arrangements, including
compliance with the Improving Governance of Regulators: Principles
and Guidelines, be reported annually to the Minister for Regulatory
Reform.
Response
Support in principle
The process for developing model contents for Ministers’ Statements
of Expectations (see Recommendation 5.1) will be cognisant of
Improving Governance of Regulators: Principles and Guidelines.
Arrangements for coordinated reporting and monitoring of regulator
performance from a cross-government perspective are outlined in the
Government’s response to Recommendation 5.5.
Recommendation 5.5
That a robust performance reporting framework be developed by the
Regulatory Policy and Performance Unit, in conjunction with
regulators and drawing on the process adopted in developing the
Improving Governance of Regulators: Principles and Guidelines. This
would include developing a framework within six months to assess all
Victorian regulators’ current practice against a ‘good practice’
standard, and commence assessments against the standard within
12 months.
Progress on the development and implementation of the
performance framework would be reported to the Minister for
Regulatory Reform.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
19
Response
Support
The Government will adopt this recommendation with an alternative
implementation approach.
DTF will lead the establishment of a framework that will underpin a
more consistent and coordinated approach to administrative and
enforcement aspects of regulator performance.
In addition, an area within the Treasury portfolio (see
Recommendation 5.1) will be assigned responsibility to implement
the whole of government regulator performance reporting
framework. The Government will consider options for such a
framework in 2012.
Recommendation 5.6
That the Regulatory Policy and Performance Unit, in conjunction with
the community of practice for regulators, develop a peer review
process for regulators, taking into account the experience in the
United Kingdom with the Hampton Implementation Reviews.
Response
Under review
In developing options for a framework for a whole of government
regulator performance reporting framework, (see Recommendation
5.5) the relevant area within the Treasury portfolio will assess the
merits of developing and/or trialling a peer review process.
20
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 6 Embedding evaluation and review
Recommendation 6.1
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to make it mandatory for proponents of primary
and subordinate legislation that requires an impact assessment to:
 include within the impact assessment a proportionate evaluation
strategy that would enable the effectiveness and efficiency of the
regulation to be assessed
 certify progress towards implementing the proposed evaluation
strategy, including that adequate data is being collected to enable
evaluation.
Response
Support in part
The Government recognises the importance of evaluation in
developing a culture of continuous improvement in a regulatory
context.
The Government supports proportionate evaluation strategies but
does not consider independent certification of the strategy beyond
existing assessment requirements is an efficient or effective use of
resources. The Government also considers that increased quality of
evaluation can be achieved over time through a culture of continuous
improvement.
Recommendation 6.2
That the Victorian Government require departments to conduct expost evaluation of regulation. The requirement would operate as
follows:
 Departments are required to evaluate any subordinate legislation
and new and amended primary legislation that imposes a
‘significant impact’ (to be interpreted in the same way as for the
preparation of an impact assessment).
 Evaluations are to meet consistent whole-of-government guidance
on quality (proportionate to the impact of the regulation), and be
prepared in accordance with this guidance. Evaluations are usually
conducted internally, and usually include public consultation and
published findings.
 The Victorian Competition and Efficiency Commission is responsible
for assessing adequacy of analysis contained in evaluations prior to
publication, against guidance to be set out in the Victorian Guide to
Regulation.
 Evaluations should be finalised no later than ten years after
regulation commences (or eight years for significant regulation) so
that the findings from evaluations are available for sunsetting
regulations.
To facilitate the operation of the requirement to evaluate:
 Departments are to prepare a timetable for conducting required
evaluations.
 The Regulatory Policy and Performance Unit is to develop
evaluation guidance for inclusion in the Victorian Guide to
Regulation, and amend the guidance for sunsetting regulation to
ensure no unnecessary duplication.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
21
Response
Support
The Government will adopt this recommendation with an alternative
implementation approach.
The Government supports early and systematic evaluation of highimpact sunsetting regulations and targeted reviews of new or
amended legislation that introduce new regulatory burdens.
The Government supports the VCEC assessing the adequacy of
analysis contained in evaluations of regulations, given its experience
in undertaking similar assessments.
The Government (through DTF) will include updated guidance in the
VGR setting out key requirements for ex-post evaluation and having
regard to the need for such requirements to be proportionate to the
impacts of regulation.
22
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
Recommendation 7 Reducing regulatory burden on business
Recommendation 7.1
That the Victorian Government's regulatory burden reduction target:
 include burdens imposed on businesses, the not-for-profit sector,
government services and the economic activity of individuals
 adopt a broad definition of regulatory burden to include
administrative burdens, compliance costs, delays costs, and fees
and charges.
Response
Support in part
The Government agrees with the Commission’s proposed scope of the
regulatory burden target, with the exception of fees and charges.
Including these within the definition is problematic, given existing
processes (including the DTF Cost Recovery Guidelines and RIS
requirements) and give rise to potential conflict with efficiency and
equity principles (based on cost recovery/user pays).
Recommendation 7.2
That the Victorian Government:
 publish all Regulatory Change Measurements (RCMs), reduce the
threshold above which the Commission assesses RCMs to those
with cost savings above $5 million per year, and require the
Commission to publish all RCM assessment letters
 publish an annual plan outlining the cost reduction proposals that
will contribute to the target during that year
 publish an annual report on the verified progress, through assessed
RCMs, of cost reduction projects, projects that have increased
regulatory costs.
Response
Support in part
The Government will report annually on its progress on the Red Tape
Strategy. It is also noted that VCEC Annual Reports provide
consolidated information on costs imposed by new regulation.
It is also noted that under the Government’s Red Tape Reduction
Strategy the VCEC assesses all RCM assessments.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
23
Recommendation 8 Regulation in a federation
Recommendation 8.1
That to facilitate the setting of national reform priorities, the Victorian
Government, in consultation with other jurisdictions, seek to enhance
the guiding principles for COAG's future regulatory reform agenda.
Once agreed amongst jurisdictions, Victoria advocate that these
enhanced principles be incorporated into the best practice regulation
guide for ministerial councils and national standard setting bodies.
Response
Support in part
The Government supports the use of rigorous principles to guide the
development of future national regulation.
The Government agrees that there would be benefit to incorporating
enhanced principles into the guidance material for national standard
setting and other bodies, and will be best placed to advocate for this
when these documents next come up for review.
There is already a set of agreed principles in place to guide COAG’s
future regulatory reform agenda, and the Government considers that
these will adequately focus future reforms. These principles require
an assessment as to whether reforms would generate a ‘net benefit’
and whether there would be a fair sharing of the costs and benefits of
reform.
Recommendation 8.2
That to facilitate building the impact assessment process into Council
of Australian Governments (COAG) proposals earlier, the Victorian
Government ensure that its submissions to COAG bodies are
consistently presented in a regulatory impact statement framework.
Victoria should also advocate that all other jurisdictions be required to
submit their proposals in the same format.
Response
Not support
The Government supports having a good policy development basis
underpinning COAG negotiations and frameworks. The Government
endeavours, where possible, to respond to COAG bodies in a
systematic framework. However, it is not practical or appropriate for
Victoria’s responses to COAG bodies to be in the form of a full RIS
framework. For example, it is not practical for Victorian comments on
a national RIS or agenda paper to be in the RIS format themselves.
Recommendation 8.3
That the Regulatory Policy and Performance Unit amend the Victorian
Guide to Regulation to require that the relevant Victorian
departments:
 provide the Victorian Competition and Efficiency Commission with
the COAG consultation RIS when it is published, with the Victorian
Competition and Efficiency Commission to comment on whether, in
the Commission’s view, the COAG RIS has reported the likely
impacts on Victorians
 publish the comments on the RIS that are provided by the Victorian
Competition and Efficiency Commission
 provide the Victorian Competition and Efficiency Commission's
comments to the relevant Ministerial Council or working group to
ensure the issues are addressed in the final decision RIS
24
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
 provide Cabinet with the Victorian Competition and Efficiency
Commission's comments on the most recent version of the COAG
RIS, before final ratification of the COAG initiative.
Response
Support in part
The Government agrees that national reform proposals should be
thoroughly assessed, to ensure they deliver real benefits to Victorians
and the nation as a whole. The VGR already requires that the VCEC be
provided with a draft COAG RIS for comment, to assist the relevant
Minister in determining the appropriateness of an exemption under
the Subordinate Legislation Act from undertaking a Victorian RIS. The
Government supports the continuation of this process.
The Government supports departments providing COAG RISs to the
VCEC for comment, unless there are particular circumstances where
this would not be practical. Such an approach will enable the VCEC’s
comments to be taken into consideration when developing Victoria’s
position on a COAG initiative.
Decisions as to whether the VCEC’s comments should be published
and/or provided to the relevant Ministerial Council or Forum are most
appropriately made on a case by case basis by the relevant Minister.
Recommendation 8.4
That if the Victorian Government adopts an approach different from a
national approach, or that adopted by most other jurisdictions, it
should publicly evaluate its approach, and report on the costs and
benefits, within three years.
Response
Not support
The Government agrees that national approaches may provide
benefits in certain circumstances. However, the Government
considers that in many cases, Victoria-specific solutions maximise the
benefit to Victorians. Like all Government decisions, the adoption of a
Victorian specific approach is subject to a vigorous evaluation process
at the time of decision making.
Deviations in policy from other jurisdictions should not necessarily be
considered an inferior option and should not be subject to evaluation
processes distinct from all other policy.
Recommendation 8.5
That the Victoria Government initiate discussions with New South
Wales to agree to allow buses and taxis to operate freely between
Albury and Wodonga. If an agreement is reached, its operation should
be reviewed in two years to determine its success and whether there
are lessons that could be applied to other areas of regulatory overlap
between jurisdictions.
Response
Support
The Governments of Victoria and New South Wales have made good
progress in making requirements on buses and taxis simpler and more
consistent administratively across the two jurisdictions (for example
in reducing duplication and simplifying driver accreditation
documentation processes).
The recently introduced Victorian Bus Safety Act 2009 has also been
acknowledged as containing cross border provisions which should be
a model for all other jurisdictions. Victoria will continue to engage in
this process with a view to further addressing areas of cross border
inconsistencies and/or duplication that affect these industries.
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012
25
www.dtf.vic.gov.au
26
Victorian Government response to the Victorian Competition and Efficiency Commission’s Final Report
Strengthening foundations for the next decade: An inquiry into Victoria’s regulatory framework, March 2012