This media release and key points were issued with the annual report series, Regulation and its Review 2004-05, on 31 October 2005.

There have been growing concerns from Australian business about rising regulatory complexity and compliance burdens. Notwithstanding previous regulatory reforms, it is clear that more can be done to improve the quality of regulations. This is a key theme in the Productivity Commission’s report Regulation and its Review 2004-05.

The Regulation Impact Statement (RIS) process seeks to ensure that proposed new regulations that impact on business are both justified and cost effective.

Compliance of Australian Government departments and agencies with the RIS requirements in 2004-05 was lower than in some previous years (80 per cent, compared with 92 per cent in 2003 04 and 81 per cent in 2002 03). Of the 19 Australian Government departments and agencies that were required to prepare RISs in 2004 05, only 10 were fully compliant.

Productivity Commission Chairman, Gary Banks, said ‘The drop in compliance last year is disappointing. Only a fraction of the 2500 or so regulations made in that year were required to have a regulation impact statement. And the costs to departments and agencies of doing so are not great, especially where best practice is routinely followed.’

The Commission argues that greater adherence to the spirit as well as the letter of the RIS requirements, would help to avoid costly regulation for business. Regulatory departments and agencies need to integrate the preparation of RISs into the policy development process, increase their commitment to consultation with stakeholders and undertake more robust analysis of the costs and benefits of policy options.

The report also contains information on compliance by Ministerial Councils and national standard-setting bodies with the Council of Australian Government’s (COAG’s) RIS requirements. The overall compliance rate was 88 percent, the same as the previous year.

The report meets the Productivity Commission’s obligation to report annually on compliance with the Australian Government’s requirements for the review and reform of regulations. Regulation Impact Statements are intended to help inform decision makers about the consequences of proposed regulatory actions, so that resulting regulation can achieve its objectives without placing unnecessary burdens and costs on business and the community.

The Commission’s Office of Regulation Review is responsible for advising departments and agencies about the Government’s regulatory best practice requirements and independently monitoring their compliance.