David Alexander | More decisions going to ministers than Office of Impact Analysis

Regrettably, a recent decision taken by national cabinet will directly impair the ability of the public service to provide independent advice, and this will consequently reduce the ability of ministers to make policy with the best quality information.

The decision taken relates to what are called regulation impact statements, or RISs as they are called (pronounced Rizzes).

RISs are formal assessments of the expected impacts of policy proposals, developed by public officials in the policy proposal phase. The federal Office of Impact Analysis (OIA), based in the Department of Prime Minister and Cabinet, oversees the RIS process.

Let's look at a simple example of how the RIS process works.

Last year when the government was looking at introducing multi-employer bargaining legislation, the OIA oversaw a RIS process to assess what the impacts would be.

In that case, one finding of the RIS was that the legislation would impose very large costs on small business - a cost of $14,638, and 4.6 hours day for up to six months to deal with the new arrangements. The RIS assessment was informative and undoubtedly a factor in senators' thinking when they secured a small business exemption in the legislation.

The change to the RIS process came about in April this year, when national cabinet agreed to change the rules on when a RIS would be required to assess policy proposals. Unusually, there has been no press release announcing or even mentioning the significant change.

The key change decided by national cabinet relates to proposals in relation to federal-state matters.

This covers a very broad range of important bodies including federal-state ministerial councils, national cabinet reform committees, the council of federal financial relations, and national standards setting bodies. It includes bodies as diverse as Safe Work Australia, the Energy Market Commission, the Australian Building Codes Board, and Food Standards Australia New Zealand.

For policy proposals in these areas, the new development is to shift the responsibility for initiating a RIS from public officials in the Office of Impact Analysis to government ministers.

Up until this decision in April, the OIA would initiate a RIS if it considered that the impacts were likely to be significant. After this decision, it is up to ministers to decide whether a RIS is initiated.

The consequences of such a decision will be immediately apparent: less sunlight on potentially awkward policies.

Up until this decision, the public would have been notified of the costs of policies that impact heavily on sections of the community. After this decision, that cost assessment may not even be undertaken if ministers suspect that they may not like the answer.

READ MORE:

For those that are interested in good policymaking, the choice to shift the responsibility of initiating RISs from public servants to politicians is deeply disappointing.

The RIS process has been an enormously valuable tool in keeping the public and policymakers informed about the consequences of possible policy changes. Ministers have often squirmed at the results, but that embarrassment is beside the point when looking at the benefits of frank advice to governments.

The scope of impact of this decision is potentially very wide. Virtually every industry in Australia works under some rules and regulations that are determined by these federal-state bodies.

The Australian Chamber of Commerce and Industry believes that the RIS process has been a valuable part of good policymaking in Australia, and we would urge the government to transfer the responsibility for initiating RISs back to public officials in the OIA.