Completing the Risk Potential Assessment Tool

Identify the strategic priority placed on this proposal by government. If you are unsure about the answer to this question, consult your central entity contact.

Mitigation and Residual Risk for Question A1

Mitigation strategies are unlikely to affect the Government’s priority; this can only occur if the Government changes their strategic priorities for Budget. Therefore, the residual risk would normally remain the same as the pre-mitigation Level of Risk.

• Risk treatment is unlikely to reduce the Level of Risk.

Indicate the level of cost and financial exposure associated with the proposal. In determining direct costs give consideration to:

• using the gross cost estimate (do not adjust down for any offsets)
• including both administered and departmental costs over the forward estimates
• whether all costs have been considered
• any contingent liabilities that may accrue to government as a result of implementation; and
• whether the proposal is likely to require additional funding.

Mitigation and Residual Risk for Question A2

As these are estimates being put forward as part of the New Policy Proposal, it is not possible to change them through mitigation measures. Therefore, the residual risk will normally be the same as the pre-mitigation Level of Risk.

• Risk treatment is unlikely to reduce the Risk Rating.

Assess the level of impact on citizens, both in terms of number of citizens affected, or impact on groups of citizens. Citizens are defined as an Australian Citizen or Australian Resident. Consider the effect the proposal will have on the citizens if fully delivered, partially delivered or if delivery fails. The text explanation should include which segments of the public will be affected and the degree to which each segment will be affected.

Mitigation and Residual Risk for Question A3

• Risk treatment may reduce the Risk Rating.

Determine the effect on the private sector, or markets. Specify which sectors will be affected positively or negatively and the size of the effect on each sector. Consider the capacity of the private sector to take on any responsibilities associated with the proposal, the level of interest and opposition in the private sector as well as the size of the market in relation to government intervention.

Highlight and detail if there is an impact on the small to medium enterprise (SME) market.

Mitigation and Residual Risk for Question A4

• Risk treatment may reduce the Risk Rating.

Identify what issues exist in dealing with stakeholders for this proposal. Consider who the stakeholders are, identify what positions or expectations they may have in relation to the proposal and the complexity associated with stakeholder management. Include stakeholders represented through interest groups and/or the media.

When determining a Strategic Context rating, consider:

• complexity and number of different stakeholder groups;
• diverse range of views and their impact on the proposal; and
• the potential consequences of stakeholder opposition.

Mitigation and Residual Risk for Question A5

• Risk treatment may reduce the Risk Rating.

Identify the legal issues which may impact on the policy design, or implementation of the proposal. Explain the legal risks which arise from: Australian Government Solicitor (AGS) advice; contingent liabilities such as warranties, guarantees and indemnities; personal injury or property damage arising from implementation; or a highly litigious stakeholder group.

Mitigation and Residual Risk for Question A6

• Risk treatment may reduce the Risk Rating. Mitigation for the risks that arise in AGS advice can only reduce the residual risk rating in consultation with AGS.

Identify any other risk in the Strategic Context not covered in the above categories specific to a policy of this type. The intent of this section is to alert Cabinet to significant issues not already captured in previous questions. Examples of risks that could be covered here are significant Security, Environmental, International and Location constraints and/or issues. These categories of risk which can have consequences for government are the most common risks which do not have a specific question in the RPAT.

Mitigation and Residual Risk for Question A7

• Risk treatment may reduce the Risk Rating.

Assess the degree to which the proposal cuts across other jurisdictions, entities, and business areas. Specify what involvement jurisdictions/entities/business areas have to the proposal and how this involvement may add complexity or difficulty to the implementation of the proposal.

Multiple entity involvement in the delivery of a proposal would be likely to attract a MEDIUM or higher rating. In addition, where any involvement with States or Territories is included or the potential for Inter-Governmental Agreements, National Partnership Agreements and National Cabinet involvement, the proposal would likely attract a HIGH or VERY HIGH rating.

Mitigation and Residual Risk for Question B1

• Risk treatment may reduce the Risk Rating.

Indicate the size of the expected financial benefit to be derived from the proposal. Consider any additional revenue from the proposal, greater efficiencies, long term reductions in costs or other benefits that are clearly identified and quantified in the proposal.

Mitigation and Residual Risk for Question B2

• Risk treatment is unlikely to reduce the Level of Risk.

Determine what transformation or alterations to entity structure and practices/culture will occur in order to implement the proposal.

Proposals which require the establishment, merger or closure of an entity would likely attract a HIGH or VERY HIGH rating.

Mitigation and Residual Risk for Question B3

• Risk treatment may reduce the Risk Rating.

Determine how much innovation will be incorporated into the proposal. Assess the inherent risks in developing and delivering proposals that involve significant new or untried methods of practice/technology.

Consider what innovative tools or applications are to be used in the proposal, if this innovative approach has been previously used and, if so, whether the previous use was a success.

Mitigation and Residual Risk for Question B4

• Risk treatment may reduce the Risk Rating.

Determine the level of complexity and structure of the proposed ICT and how this is incorporated into the proposal.

The examples provided in the risk rating boxes above are not an exhaustive list. Consider all other potential complexities associated with the ICT component within the proposal, which may include the technical skills and availability required to implement the proposed ICT.

Proposals subject to the ICT Investment Approval Process would likely attract a HIGH or VERY HIGH rating for this question.

Mitigation and Residual Risk for Question B5

• Risk treatment may reduce the Risk Rating.

Determine the extent of formal procurement or tendering envisaged for the proposal. The text explanation should incorporate all related procurement and the complexity associated with each of the procurement processes proposed.

Particular attention should be given to:

• known instances where similar procurements have failed;
• budget overruns; or
• instances where market capability has been unable to meet the procurement needs as specified.

Mitigation and Residual Risk for Question B6

• Risk treatment may reduce the Risk Rating.

Determine the level and nature of construction in the proposal. Reflect all construction and the complexity associated for each construction proposed.

There are many aspects of construction which may add complexity, such as:

• heritage/architectural value;
• proximity to environmentally fragile areas, endangered species and the like;
• proximity to areas associated with indigenous culture/identity; and
• proposed usage for a highly sensitive activity.

Proposals subject to the Two Stage Capital Works Approval Process would likely attract a HIGH or VERY HIGH rating for this question.

Mitigation and Residual Risk for Question B7

• Risk treatment may reduce the Risk Rating.

Determine the nature and level of commercial or service delivery arrangements associated with this proposal. The text explanation should address how contracts or agreements for delivery are set up and the private sector or other delivery partner’s capacity to meet supply needs. Indicate the effect that contract and supply arrangements may have on the industry or service delivery segment.

Where multiple suppliers or another Commonwealth entity is providing service delivery arrangements for the proposal, this is likely to attract a MEDIUM, HIGH or VERY HIGH rating. It is expected that early consultation has occurred with the service delivery entity and they have informed this assessment.

Mitigation and Residual Risk for Question B8

• Risk treatment may reduce the Risk Rating.

Determine the complexity of the governance arrangements for the proposal. Consider whether the structures involve cross-entity or interdepartmental committees, inter-jurisdictional governance arrangements or external representation in the governance arrangements.

Mitigation and Residual Risk for Question B9

• Risk treatment may reduce the Risk Rating.

Determine the resources allocated to, or available to implement the proposal. Consider the level of team and management experience for the proposal and whether this needs to be imported, difficulties that may arise in relation to recruitment or training and any complexity associated with sourcing the skills externally or internally.

Mitigation and Residual Risk for Question B10

• Risk treatment may reduce the Risk Rating.

Determine whether there are timing constraints which add complexity to the proposal, for example, fixed dates for commencement of proposal and how these constraints will impact delivery of the proposal on time, on budget and to expectations.

Mitigation and Residual Risk for Question B11

• Risk treatment may reduce the Risk Rating.

Assess the level of dependence or interdependence of this proposal to other projects/programs for successful implementation. Consider the nature of the other projects/programs that this proposal is dependent on, the current status of these projects/programs and the level of dependence.

Mitigation and Residual Risk for Question B12

• Risk treatment may reduce the Risk Rating.

Determine how well-developed and understood the policy intent for the proposal is. Consider the level of policy development that is planned, the level of detail or direction given by Government for the proposal, and whether all parties are committed and have a common understanding of the proposal’s intent (for example, States and Territories, or if industry input is envisaged for final program design).

Mitigation and Residual Risk for Question B13

• Risk treatment may reduce the Level of Risk.

Determine how proficient/experienced the entity is in delivering this type of proposal. Consider the capability demonstrated in the delivery of similar outputs by the entity, if the entity has retained relevant capabilities and what lessons have been learned about prior initiatives.

Consideration should be given to:

• outcomes from recent entity capability reviews;
• capability improvement strategies;
• workforce planning and the impact on the entity implementing the proposal;
• whether the implementation of the policy initiative is managed by an entity as “business as usual” or using project management disciplines;
• the implications this initiative will have for the entity’s workforce (capacity, capability, location, functional alignment to business delivery);
• the new skills or capabilities that will become important to achieve business outcomes and how will they be acquired (developed internally or attracted from external sources);
• the current availability of these new skills and capabilities in the external labour market and, the level of impact if they are not available at critical time points in the implementation; and
• the skills and capabilities that will no longer be required and how this surplus will be managed.

Mitigation and Residual Risk for Question B14

• Risk treatment may reduce the Risk Rating.