Guidelines for preparing reducing
red tape Statements of Expectations
for regulators
January 2013
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
Authorised by the Victorian Government
1 Treasury Place, Melbourne, 3002
© Copyright State of Victoria 2013
This book is copyright. No part may be reproduced by any process except in accordance with
the provisions of the Copyright Act 1968.
Published January 2013.
If you would like to receive this publication in an accessible format please telephone
039651 0909 or email information@dtf.vic.gov.au
This document is also available in PDF format at www.dtf.vic.gov.au
Contents
1.
Overview ......................................................................................................... 1
2.
Stage One: Reducing red tape Statements of Expectations ............................. 2
2.1 Purpose ........................................................................................................................................2
2.2 Content to be included in a reducing red tape SOE.....................................................................2
2.2.1 Data collection ................................................................................................................2
2.2.2 Measures to reduce red tape .........................................................................................2
2.2.3 Reporting ........................................................................................................................4
2.3 Implementation and monitoring .................................................................................................5
2.3.1 Process for departments and regulators ........................................................................5
2.3.2 Role of the Department of Treasury and Finance ..........................................................5
2.3.3 Monitoring - VCEC ..........................................................................................................6
2.3.4 Engaging with business...................................................................................................6
2.3.5 Evaluation of benefits .....................................................................................................6
2.3.6 Timelines - Stage One reducing red tape SOEs ..............................................................6
3.
Stage Two: Broader SOE framework ............................................................... 8
4.
Attachments.................................................................................................... 9
Attachment A ..............................................................................................................................9
Attachment B – Model Letter....................................................................................................10
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
i
1.
Overview
The purpose of these guidelines is to assist departments, on behalf of their Minister, to
prepare a reducing red tape Statement of Expectations (SOE) letter for their key regulators.
As part of the Government’s response to the Victorian Competition and Efficiency
Commission’s (VCEC) inquiry, Strengthening Foundations for the Next Decade: An Inquiry
into Victoria’s regulatory framework, the Government committed to implement a key
recommendation that all Ministers issue a SOE to each of their portfolio regulators.
Establishing clear expectations on regulator performance through SOEs can improve the
compliance and administrative activities of Victoria’s regulators.
Implementation of SOEs will be completed in two stages (see Figure 1).
 Stage One - Relevant Ministers to issue a reducing red tape SOE: The reducing red tape
SOE will focus on the major regulators (identified in Attachment A) and their contribution
to the Government’s 25 per cent red tape reduction target.
 Stage Two - Implementation of the broader SOE framework: This stage will apply to all
regulators and focuses on improving broader regulatory outcomes by developing more
risk-based, proportionate and targeted approaches to regulating.
Figure 1: Key elements of the two-stage SOE implementation
These guidelines focus on Stage One reducing red tape SOEs and will take effect from
10 December 2012.
NOTE: Ministers issuing reducing red tape SOEs can incorporate a broader set of
expectations into the reducing red tape SOE (role clarity, engagement, accountability etc.).
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
1
2.
Stage One: Reducing red tape Statements of
Expectations
2.1
Purpose
The reducing red tape SOE is designed to reduce costs imposed by regulators through a
number of means, for example, lowering average approval times and/or costs imposed
through unnecessary inspection, reporting and notification requirements. These measures
will contribute to the Government’s 25 per cent red tape reduction target.
These guidelines will assist departments to prepare a draft reducing red tape SOE.
2.2
Content to be included in a reducing red tape SOE
The reducing red tape SOE should take the form of a letter from the relevant Minister to the
regulator (see example/model letter - Attachment B). Where a regulator already has an SOE
in place, the letter would supplement the existing expectations set by the relevant Minister.
Expectations included in SOEs should cover those activities for which the head of the
relevant regulator (i.e. Chair/Chief Executive/Director) is responsible for administering.
2.2.1
Data collection
The first expectation set by the Minister in a reducing red tape SOE should be for the
regulator to compile baseline data on the regulator’s most significant compliance and
administrative processes.1 These processes should be identified by departments, in
consultation with the regulator, and could include a range (e.g. 3-6) of high-impact or highvolume approval, inspection, reporting and notification activities.
2.2.2
Measures to reduce red tape
Reducing red tape SOEs should establish performance measures for the regulator to reduce
the cost imposed by the high-impact or high-volume compliance and/or administrative
activities identified. These measures would depend on the type of activities identified and
could include, for example:
 reducing average approval times by up to 15-25 per cent2 (or other agreed target3) by
1 July 2014 for high-impact licensing and other approval activities; or
1
Where relevant data is not currently collected, a regulator where feasible should endeavour to find
ways to identify and collect an appropriate (or indicative) measure of timeliness or compliance that
would at least allow for a future measurement of the red tape savings to be undertaken.
2
The 15-25 per cent figure is based on work undertaken by the VCEC that benchmarked Victoria’s
approval processes against other jurisdictions. Where approvals are dependent on referrals by several
agencies, referral processing times can be excluded from the target.
2
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
 reducing the costs imposed on business and others from other high-impact or highvolume compliance and administrative activities, such as from inspections and
reporting/notification requirements.
While in most cases, performance measures will be calculated by observing average
approval, inspection, or other reporting times/cases (i.e. reducing average approval times by
xx per cent), departments should consider whether there is greater value to the public from
achieving this through targeting lower impact, high-volume approval, inspection, or other
reporting cases or higher-impact, low-volume cases.
Ministers should also establish expectations around business or community consultation in
the development of actions taken by the regulator to achieve red tape reduction
performance measures. Careful design of mechanisms to improve the timeliness of decision
making is essential. For example, measuring timeliness for decisions but not outcomes could
lead to more rapid but poorer decisions, undermining confidence in regulatory
performance.
The date 1 January 2011 should be used as the baseline when reporting against any
performance measures set. Alternatively, performance outcomes from an average of
previous years can be used to determine this baseline where appropriate.
Figure 2. Possible actions to reduce costs on regulated entities
Approvals

Spending less time assessing licensing applications for parties with a history of
compliance.

Offering pre-lodgement meetings to applicants to clarify the key information
requirements in their applications. This is intended to reduce the number and scope
of subsequent information requests (if any) by approval bodies.

Resolving any referrals (internally and/or with external bodies) simultaneously. The
efficiency of approval processes can be improved by ensuring that there is parallel
processing of applications (wherever possible) rather than sequential processing.

Establishing agreed timeframes with referral authorities or providing an alternative
low-cost approach (e.g. internal or peer review).

Cutting out unnecessary or low-value added steps in the approval process. This may
also require legislative changes.

Allowing online lodgement of applications/complaints to streamline processes.

Restricting the appeal rights of third parties for certain types of applications (for
example, low risk applications). This approach would likely require legislative
changes.
Inspections

Taking a more targeted and risk-based approach to inspections. For example,
reducing the frequency of inspections for parties with a strong history of compliance
in low-risk areas of operation (i.e. areas with a history of low incident frequency and
severity).

Improving guidance to regulated parties to help reduce the need for inspections.
Providing alternative quality assurance processes where they could lead to lower
regulatory burdens (e.g. independently audited quality schemes including Hazard
Analysis and Critical Control Points, Environmental Management System)
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
3
Reporting and notifications

Removing reporting and notification requirements that impose unnecessary
burdens:
– in low-risk areas of operation; and
– in areas where those requirements have a minimal impact on regulatory
activity and outcomes.
The setting of performance targets to reduce the frequency of inspections, approval times,
reporting or notification requirements should only be pursued where there are
opportunities for regulators to reduce business costs without compromising other important
objectives of the regulation.
The extent to which regulators can change their compliance and administrative practices
may be limited by competing objectives set out in legislation (ensuring compliance by
regulated entities versus reducing costs on regulated entities). Departments should work
with regulators to clarify the way in which these conflicts should be managed and seek to
support regulators to take a more risk-based approach to compliance.
While departments may work with regulators to achieve further significant red tape
reductions through legislative change using the SOE framework, reducing red tape SOE
letters should focus on actions that regulators can take to minimise the burden of current
regulation with a focus on approval processes, inspections, reporting and notification
requirements.
Ministers can choose to set performance targets as a monetary red tape saving target,
where it is deemed more appropriate (i.e. reduce red tape in area xx by $xx million) as an
alternative to setting activity based performance targets.
2.2.3
Reporting
Reducing red tape SOEs should set expectations for regulators to publish the baseline data
collected on identified high-impact or high-volume compliance and/or administrative
activities as well as reporting on actions being taken to achieve the performance measures
specified in reducing red tape SOEs (and subsequent results).
To avoid dual reporting streams, reporting on SOE performance measures should be
undertaken in the context of annual financial year reporting. It is expected that regulators
would commence reporting on progress against their reducing red tape SOEs in their
2012-13 annual reporting.
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Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
2.3
Implementation and monitoring
The process for drafting and issuing Stage One reducing red tape SOEs is broadly
summarised below:
Figure 3: Process for implementation of Stage One reducing red tape SOEs
2.3.1
Process for departments and regulators
Departments are to prepare an initial draft reducing red tape SOE letter on behalf of their
respective Minister. The Minister is responsible for issuing the SOE to their regulator.
2.3.1.1 Drafting
Departments should involve regulators in the preparation of reducing red tape SOEs. It is
important that regulators be given an opportunity to comment on the draft reducing red
tape SOE before it is submitted for Ministerial approval.
2.3.1.2 Implementation
Once the Minister has issued the reducing red tape SOE to the regulator, the department
and the regulator must publish the reducing red tape SOE on their website.
Other requirements for regulators include:
– Reducing red tape SOE performance measures should be included in corporate plans.
– A reply to the Minister should be sent within three months of receipt of the reducing
red tape SOE letter on the actions they intend to take to meet their performance
measures.
– These actions (and the result) will need to be reported in the annual reports (starting
from 2012-13).
Once SOEs have been issued, departments, in consultation with regulators, are able to
revisit the content included in SOEs at any time to incorporate additional performance
measures or new opportunities for reducing red tape.
2.3.2
Role of the Department of Treasury and Finance
The Department of Treasury and Finance (DTF) will provide support to departments to
ensure reducing red tape SOEs are consistent with these guidelines. As such, a draft copy of
the reducing red tape SOE letter should be provided to DTF at the same time it is provided
to the regulator for comment (see section 2.3.5 Timelines).
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
5
2.3.3
Monitoring - VCEC
The VCEC will review regulators’ corporate plans and annual reports to monitor reporting by
regulators on performance measures specified in their reducing red tape SOE. This data will
further inform existing reporting by the VCEC of regulators in The Victorian Regulatory
System. It is expected that the VCEC will provide a summary of key findings to DTF, along
with any recommendations for improvement.
The Victorian Government, through the VCEC, will assist regulators in achieving
requirements set out in their reducing red tape SOE (and later their broader SOE) by
establishing a community of practice for regulators. This forum will encourage regulators to
share experiences to accelerate diffusion of good practice and build professional capability
among regulators.
2.3.4
Engaging with business
Business engagement should be incorporated at each stage of implementation of reducing
red tape SOEs.
The Department of Business and Innovation (DBI) has implemented the Government’s
Business Engagement Model, which provides direct feedback from individual businesses on
their experiences with Government services, including their experience with regulation.
DBI will be consulted in the use of the Business Engagement Model to augment department
and regulator business consultation processes in sourcing the views of business on the
implementation of reducing red tape SOEs.
2.3.5
Evaluation of benefits
Departments should undertake a formal measurement (through a Victorian Regulatory
Change Measurement - RCM) of red tape savings that have been achieved by July 2014.
The VCEC will review RCMs prepared. These savings will count towards the Government’s
25 per cent red tape reduction target.
2.3.6
Timelines - Stage One reducing red tape SOEs
DTF has established a timeline to ensure that departments and regulators are able to meet
the Stage One requirements:
Date
Task
December 2012
Department commences preparation of draft reducing red tape SOE, in
consultation with the regulator, and in accordance with these guidelines.
Draft reducing red tape SOE provided to the regulator and DTF for
comment - aim for 10 business day turnaround.
DTF to brief the Treasurer on draft content of all reducing red tape SOEs.
Department to seek approval of the draft reducing red tape SOE from the
relevant Minister.
The relevant Minister to issue the reducing red tape SOE to the regulator.
The department and regulator are to publish the reducing red tape SOE
on their websites.
Regulator to reply to Minister on the actions they intend to take to meet
their reducing red tape performance measures.
Regulator to gather baseline data and report on actions taken to reduce
high-impact or high-volume compliance and/or administrative activities
identified in reducing red tape SOEs.
Mid February 2013
31 March 2013
By 1 July 2013
Ongoing
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Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
Date
Task
Ongoing
Regulators to report, through an existing process (i.e. annual reports), on
progress towards achieving SOE performance measures. It is expected
that regulators would commence reporting on progress against their SOEs
in their 2012-13 annual reports.
VCEC will review corporate plans and annual reports to monitor reporting
by regulators on performance measures specified in their reducing red
tape SOE.
Departments should complete a formal measurement, through a RCM, of
red tape savings that have been achieved.
Ongoing
1 July 2014
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
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3.
Stage Two: Broader SOE framework
The approach to implementation of the proposed Stage Two broader SOE framework will be
informed by the implementation of Stage One.
To ensure greater engagement and ownership by regulators of the broader SOE framework, a
regulator community of practice forum is being established to inform the principles and
objectives to be included in Stage Two. The community of practice will target improving role
clarity, governance, engagement and accountability as well as achieving red tape savings.
Consistent with the Government response, a regulator performance reporting framework will
be implemented and will be overseen by the VCEC. This framework will:
 formalise use of the regulator community of practice forum to accelerate diffusion of
good practice and build professional capability among regulators; and
 implement a whole of government regulator performance reporting framework, allowing
regulators to benchmark their performance on key regulatory activities against other
regulators in Victoria, supporting continuous improvement in compliance and
administrative practices.
Timelines have not yet been determined for implementation of the broader Stage Two SOE
framework.
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Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
4.
Attachments
Attachment A
The list of regulators has been subjectively selected for stage one SOEs, based on:
 classifications of major regulators used in the VCEC reporting in the Victorian Regulatory
System 2011 publication; and
 further DTF analysis on staff numbers, expenditure and licensed parties as a proxy for the
size of a regulator’s regulatory activity.
The VCEC classification of major regulators excluded regulators that have relatively larger
total staff numbers than the smaller major regulators, but have comparatively small
regulatory functions relative to their other functions and activities.
This list (below) provides the minimum number of regulators that would be issued stage one
reducing red tape SOEs. Ministers can elect to issue reducing red tape SOEs to regulators not
included in this list.
Regulator
Department
Investigations/
Complaints
handling**
Licensed
parties
(2009-10)
Key approval activities
Registration of incorporated
associations/cooperatives,
fundraisers, patriotic funds,
limited partnerships, retirement
villages, funeral providers and
certain licensed occupations
Licensing, permits and courses
(2009-10)
Consumer Affairs
Victoria
DOJ
28 379
58 821^
Victorian
Commission for
Gambling and
Liquor
Regulation*
VicRoads
DOJ
27 635
61 631
DOT
0
EPA Victoria
DSE
0
3 700
000
522
Victorian
WorkCover
Authority
DTF
5 113
558 938
Licensing and registration
Major works approvals,
licensing and permits
Licensing and registration
*Amalgamation of Liquor Licensing and Victorian Commission for Gambling Regulation 2009-10 data
^Removed data on business names, credit providers and introduction agents registries which are no longer
regulated by CAV
**Refers to investigations and complaints handling about other regulated entities.
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
9
Attachment B – Model Letter
Name of regulator’s chair/chief executive (or equivalent)
Title
Name of Regulator
Address
Date of issue
Dear [Regulator’s chair/chief executive (or equivalent)]
REDUCING RED TAPE STATEMENT OF EXPECTATIONS FOR [NAME OF
REGULATOR]
I am pleased to provide you with this reducing red tape Statement of Expectations (SOE) for
[name of regulator]. As Minister for [relevant portfolio], I am responsible for administering
the [name of regulation(s) enforced by the regulator on behalf of the Minister]. This SOE
should be read within the context of the objectives, obligations and functions outlined in the
legislation as amended.
This SOE identifies the key compliance and administrative activities of the regulator that
impose significant administrative, compliance and delay costs on business and the broader
community. Specific targets are set to reduce these costs as part of the regulator’s
contribution to the Government’s 25 per cent red tape reduction target. I acknowledge that
this may involve work already being undertaken by the regulator [to add if relevant].
Key compliance and administrative activities
Following consultation with [name of the regulator], I have identified some key compliance
and/or administrative processes and activities that impose considerable costs on businesses
and the broader Victorian community. The regulator is expected to identify opportunities to
reduce these costs – for example, by applying a more risk-based, proportionate and targeted
approach to deliver compliance outcomes at the lowest cost to the community. To focus these
efforts the regulator is expected to achieve the following measures:
 Reduce approval times in [name of process and activity] by up to 15 per cent
(from 1 January 2011) by July 2014.
 Reduce the number of [type of low-risk inspection] for compliant businesses by
up to x (from 1 January 2011) by July 2014.
 Remove unnecessary notification requirement for compliant entities by July 2014.
In developing actions to achieve these performance measures, [name of the regulator] is
expected to consult with business and/or the broader community as appropriate.
[Name of regulator] is also encouraged to identify other areas that may impose considerable
burden on the community and work towards reducing these costs where appropriate.
Reporting
Reporting on your progress to deliver SOE performance measures should be undertaken in
the context of annual financial year reporting to avoid dual reporting streams. As part of
annual reporting, regulators are expected to report on:
 Current baseline levels (e.g. 1 January 2011) for approval times/inspections etc. to
measure performance against the agreed targets.
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Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
 Activities undertaken to reach the performance measures set in this statement.
 Annual reductions in red tape achieved (where relevant).
I also expect that these SOE performance measures will be incorporated into [name of
regulator]’s corporate plan.
This reducing red tape SOE should be published on the [name of regulator]’s website upon
receipt as this applies from the date of receipt until the end of this Parliamentary term, or
until otherwise amended.
I expect that within three months of receipt of this letter, [name of the regulator] will indicate
to me how it intends to achieve the performance measures set in this SOE.
I look forward to seeing [name of regulator] continuously working towards applying an
efficient level of regulatory intervention to achieve its outcomes.
Yours sincerely
Name of Minister
Relevant portfolio
Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013
11
www.dtf.vic.gov.au
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Guidelines for preparing reducing red tape Statements of Expectations for regulators
January 2013