The independent Review of Whole-of-Government Internal Regulation (Belcher Red Tape Review) – Principles for Internal Regulation

The Belcher Red Tape Review recommends internal regulation, either set by the centre or self-imposed, should be:

The minimum needed to achieve policy (or entity) outcomes

  • Regulation should be created only where, in comparison to other options, it is justified by an analysis of the burden to be imposed against the benefits for policy outcomes or entity performance.
  • Regulation should not be the default option when problems arise. Mandatory requirements should be introduced only where policy failure cannot be dealt with through: better implementation of existing regulation; capability improvement and good practice guidance; self-assessment combined with internal or external audit, and incentive based approaches.
  • Regulation should be principles-based where possible to enable entities to determine the most efficient and appropriate way to respond given their objectives and operating environments.
  • Regulation should be fit for purpose and not apply equally across entities if policy outcomes can be achieved through application only to key entities without undue consequences for the policy framework.
  • In particular, the cumulative compliance burden imposed on small and micro entities should be considered as part of the balance between benefits and cost.

Proportional to the risks to be managed and supportive of a risk-based approach

  • A regulatory approach must recognise the diversity of the Commonwealth in terms of entity role, size and purpose. The Commonwealth is made up of entities ranging from the Department of Defence (95,222 ASL) and the Department of Human Services (30,461 ASL) which manage a widespread portfolio of responsibilities, through to tiny entities such as the National Competition Council (1 ASL) and the Office of the Auditing and Assurance Standards Board (7 ASL) which are responsible for narrow, but specialised functions.[1] The variety of roles and governance structures such entities require creates complexity within the current approach to regulation. A one size approach, or even two sizes, may not be sufficient.
  • Regulators should be willing to adjust their stance to the capacity, maturity, materiality and non-compliance risk of entities. To do otherwise imposes unnecessary costs on both the regulated entity and the regulator.
  • Regulation should promote a culture that identifies relevant risks and mitigations, and accepts residual risk where eliminating risk would impose prohibitive costs or processes.

Coherent across government and not duplicative

  • Regulation should not conflict with, or overlap with, other regulatory requirements.
  • Reporting should be based on the principle of “collect once, use many times” - regulators should seek to rely on or adjust existing reporting requirements rather than imposing new ones.
  • Regulation should be internally consistent and align with other policies in the related area, including the content and timing of requirements.
  • Regulation and guidance documents should be readily accessible.
  • Regulators should consider how digital technology and web-based information accessibility can reduce compliance burden and decrease requests for information.
  • In developing and implementing any differential or risk-based regulatory approaches, the reasons for differences should be clearly articulated and understood by regulators and entities.

Designed in consultation with stakeholders for clarity and simplicity in application

  • Regulators should consult in a genuine and timely way to ensure they have a full appreciation of stakeholder issues.
  • Regulators should communicate the clear connection between the regulation design and desired policy outcomes.
  • Regulators should communicate how information provided through reports is used and the value it adds.
  • As far as possible, regulation should be designed to satisfy internal as well as external reporting and management requirements, including by aligning timing.
  • Regulation should be designed and implemented with common sense, empathy and respect.
  • Regulatory and guidance documents should be streamlined to reduce the burden of reading and to distil mandatory requirements. Regulators should focus on clarity and consistency in language (such as avoiding use of ‘must’ statements when suggesting better practice).

Reviewed periodically to test relevance and impact

  • Regulators should build in periodic review to assess:
    • the continuing need for regulation;
    • the costs and benefits of the regulatory option chosen in comparison to other options and whether it continues to be the minimum necessary; and
    • the efficiency and effectiveness of the entity’s administration of the regulation.
  • The reviews should be considered by relevant decision-makers and made available to those regulated.

[1] Budget Paper No.4 2015-16

Last updated: 04 February 2016