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COAG Requirements

This web page is relevant to policy officers developing regulatory proposals where the decision maker is the Council of Australian Governments, a ministerial council, national standard-setting body or associated body.

• If you are developing a regulatory proposal involving Commonwealth jurisdictional responsibility and the decision maker is the Australian Government’s Cabinet, the Prime Minister, minister, statutory authority, board or other Australian Government regulator, see the Australian Government requirements.

Overview

This web page, along with the linked pages, provides information about various aspects of COAG’s best practice regulation requirements including:

• COAG principles of best practice regulation
  • Establish and maintain effective arrangements
• Application
  • Regulation Impact Statements (RISs)
  • COAG regulatory impact analysis guidance material
  • Summary of COAG regulatory impact analysis process
• Consultation requirements
• Compliance reporting

COAG Principles of Best Practice Regulation

The Council of Australian Governments (COAG) has agreed that all governments will ensure that regulatory processes in their jurisdiction are consistent with the following principles:

1. establishing a case for action before addressing a problem;
2. a range of feasible policy options must be considered, including self-regulatory, co-regulatory and non-regulatory approaches, and their benefits and costs assessed;
3. adopting the option that generates the greatest net benefit for the community;
4. in accordance with the Competition Principles Agreement, legislation should not restrict competition unless it can be demonstrated that:
   1. the benefits of the restrictions to the community as a whole outweigh the costs, and
   2. the objectives of the regulation can only be achieved by restricting competition
5. providing effective guidance to relevant regulators and regulated parties in order to ensure that the policy intent and expected compliance requirements of the regulation are clear;
6. ensuring that regulation remains relevant and effective over time;
7. consulting effectively with affected key stakeholders at all stages of the regulatory cycle; and
8. government action should be effective and proportional to the issue being addressed.

Establish and Maintain Effective Arrangements

The COAG best practice regulation guide reflects the commitment to establish and maintain effective arrangements to maximise the efficiency of new and amended regulation and avoid unnecessary compliance costs and restrictions on competition made by COAG at its 10 February 2006 meeting. COAG also agreed to apply these enhanced arrangements to Ministerial Councils. The Guide ensures that regulatory processes at the national level are consistent with principles of best practice regulatory process agreed by COAG.

COAG agreed that governments will establish and maintain effective arrangements at each level of government that maximise the efficiency of new and amended regulation and avoid unnecessary compliance costs and restrictions on competition by:

1. establishing and maintaining “gate keeping mechanisms” as part of the decision-making process to ensure that the regulatory impact of proposed regulatory instruments are made fully transparent to decision makers in advance of decisions being made and to the public as soon as possible;
2. improving the quality of regulation impact analysis (including Regulation Impact Statements) through the use, where appropriate, of cost-benefit analysis;
3. better measurement of compliance costs flowing from new and amended regulation, such as through the use of the Business Cost Calculator;
4. broadening the scope of regulation impact analysis, where appropriate, to recognise the effect of regulation on individuals and the cumulative burden on business and, as part of the consideration of alternatives to new regulation, have regard to whether the existing regulatory regimes of other jurisdictions might offer a viable alternative; and
5. applying these arrangements to Ministerial Councils.

Application

Regulation refers to the broad range of legally enforceable instruments which impose mandatory requirements upon business and the community, as well as to those government voluntary codes and advisory instruments for which there is a reasonable expectation of widespread compliance.

The principles of good regulatory practice and regulatory assessment requirements outlined in the COAG best practice regulation guide apply to decisions of COAG, Ministerial Councils and intergovernmental standard-setting bodies, however they are constituted. This includes bodies established by statute, or administratively by government, to deal with national regulatory problems.

The principles and assessment requirements apply to agreements or decisions to be given effect, whether at the Commonwealth or State/Territory level, or both, through principal and delegated legislation, administrative directions or other measures which, when implemented, would encourage or force businesses or individuals to pursue their interests in ways they would not otherwise have done. This does not include purchasing policy or industry assistance schemes.

The principles and assessment requirements do not apply to agreements or decisions that result in regulation that is minor or machinery in nature and do not substantially alter existing arrangements. Nor do the principles apply to early “brainstorming” discussions of Ministerial Councils which are not supported by written submissions outlining regulatory options or recommendations regarding regulatory action.

Development of voluntary codes and other advisory instruments should take account of these principles and assessment requirements where there is a reasonable expectation that their promotion and dissemination by standard-setting bodies or by government could be interpreted as requiring compliance. For example, should non-compliance with provisions of a voluntary code be considered as evidence by a court or an administrative body when determining compliance with statutory obligations, such advisory documents are subject to the review process.

COAG Regulatory Impact Analysis Guidance Material

For more information, refer to COAG’s Best Practice Regulation A Guide for Ministerial Councils and National Standard Setting Bodies.

Summary of COAG Regulatory Impact Analysis Process

Policy officers might find a summary of COAG’s regulatory impact analysis process useful.

Consultation Requirements

Policy officers developing a regulatory proposal should also be familiar with COAG’s consultation requirements which involve consultation guidelines and mechanisms including a Consultation RIS.

Compliance Reporting

Each year ministerial councils and national standard setting bodies are required to provide compliance information to the OBPR on COAG’s best practice regulation requirements.

Each year the OBPR reports on compliance with COAG’s requirements in the Best Practice Regulation Report.

Contact for information on this page: OBPR contacts page

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