A Regulation Impact Statement (RIS) is required for agreements or decisions of the Council of Australian Governments (COAG), Commonwealth-State Ministerial Councils and national standard setting bodies which, when implemented, would encourage or force businesses or individuals to pursue their interests in ways they would not otherwise have done. More information on the COAG best practice regulation requirements is available on the COAG requirements for developing a regulatory proposal page.
The RIS requirement does not, however, apply in the following cases:
- Purchasing policy or industry assistance schemes.
- Agreements or decisions that result in regulation that is minor or machinery in nature and do not substantially alter existing arrangements.
- The early “brainstorming” discussions of Ministerial Councils which are not supported by written submissions outlining regulatory options or recommendations regarding regulatory action.
If you consider that any of the above cases apply to your proposal contact the OBPR.
The primary role of the RIS is to improve government decision-making processes by ensuring that all relevant information is presented to the decision makers when a decision is being made or agreement is otherwise being sought.
A RIS, under the COAG requirements, is a two stage process involving a RIS for consultation and a RIS for the decision makers.
The RIS for consultation is a document prepared by officials (whether in a secretariat, advisory committee, or similar) developing a policy proposal for consideration by COAG itself, a Ministerial Council, or by a national standard-setting body, which canvasses the regulatory options being considered, in order to determine the relative costs and benefits of those options. The consultation RIS aims to elicit views from affected parties prior to the development of final recommendations for decision makers.
The purpose of a RIS for decision makers is to draw conclusions on whether regulation is necessary, and if so, on what the most efficient and effective regulatory approach might be, taking into account the outcomes of the consultation process.
A RIS has seven key elements, setting out:
- the problem or issues which give rise to the need for action;
- the desired objective(s);
- the options (regulatory and/or non-regulatory) that may constitute viable means for achieving the desired objective(s);
- an assessment of the impact (costs, benefits and, where relevant, levels of risk) on consumers, business, government and the community of each option;
- a consultation statement;
- a recommended option; and
- a strategy to implement and review the preferred option.
All seven elements apply to both the consultation RIS and final, decision-making RIS, but it is expected that the level of analysis in a consultation RIS would be lower than the level of analysis in the final RIS. This is because the impacts of options are sometimes unclear. The community consultation process is designed to allow interested parties and stakeholders to help identify such impacts. In such cases, the draft RIS should primarily focus on the first three elements: the problem, objectives and options sections.
The decision-making stage RIS should contain evidence in support of the problem and impact assessment, and this should be quantified as far as possible.
As a general rule, all seven elements of a decision-making stage RIS should contain a degree of detail and depth of analysis that is commensurate with the magnitude of the problem and the size of the potential impacts of the proposal.
A number of quantitative approaches exist to assist in evaluating options as part of the RIS, including:
- risk analysis [ - 364 KB]
- cost-benefit analysis
- measuring business compliance costs (COAG has recommended that the Business Cost Calculator be used to assist with this)
- assessing effects on competition
Further information is contained in Best Practice Regulation: A Guide for Ministerial Councils and National Standard Setting Bodies (COAG, October 2007). While developed for Australian Government requirements, the Best Practice Regulation Handbook also contains more detailed information, particularly on the seven key elements of a RIS.
Contact for information on this page: OBPR contacts page