Glossary of Terms

Administrative costs

Costs incurred in complying with a regulation that relate to record keeping, reporting or other administrative processes or systems.

Business

Any organisation engaged in commercial, industrial or professional activities operating under Australian law for the purpose of making a profit.

Burden

The cumulative effect of government regulation on business, community organisations or individuals.

Business-as-usual costs

Costs incurred as part of normal business practices that would be undertaken regardless of regulatory change.

Carve-out

A standing agreement removing the need for assessment of minor or machinery changes that occur on a regular basis.

Community organisation

Any organisation engaged in charitable or other community-based activity operating under Australian law and not established for the purpose of making a profit.

Compliance costs

The direct costs incurred by a regulated entity to comply with regulation. Compliance costs can be further categorised into administrative, substantive, or financial compliance costs.

Consultation

The practice of advising stakeholders of an intention to regulate which involves information sharing, dialogue and genuine consideration of feedback received.

Decision maker

The authorised person or entity responsible for a decision in relation to a regulatory proposal. This can include deputy secretaries, secretaries, other delegated officials, chief executives, boards, ministers, the Prime Minister or cabinet.

Delay costs

The expenses and loss of income incurred through a lost opportunity caused by an application or approval delay.

Disallowable instruments

Any regulation which, having been tabled in Parliament, is open to disallowance for a set period, usually fifteen sitting days from the date of tabling. All new legislative instruments are subject to disallowance unless they have been granted an exemption.

Financial costs

The fees and charges attached to a regulation that are payable to government.

Grandfathering

The practice of exempting a pre-existing entity or activity from a new regulation.

Impact

A positive or negative effect caused by regulation.

Individual

Any person subject to Australian law who interacts with government or is impacted by regulation, and whose activities have an impact in Australia.

Indirect costs

Costs arising as a downstream consequence of regulatory changes. This includes changes to market structure and competition impacts.

Light touch regulation

Regulation that provides greater discretion to regulated parties in how they can act.

Machinery change

Consequential changes in regulation required as a result of a substantive regulatory decision.

Minor change

Changes that do not substantially alter the existing regulatory arrangements.

Non-compliant

Failure to produce an adequate RIS as assessed by the OBPR.

Non-compliance costs

Costs associated with a failure by a business, community organisation or individual to comply with regulation. Examples include fines and court fees.

No regulation option

A policy option which aims to achieve its policy objective without using any form of regulation, as distinct from the Status quo option. A RIS must analyse the net benefit of either or both the No regulation and Status quo options as a benchmark against which other options can be assessed.

Normally efficient business

A regulated entity that handles its regulatory tasks no better nor worse than another.

Office of Best Practice Regulation (OBPR)

The Division within the Department of the Prime Minister and Cabinet responsible for providing advice to Portfolios on whether a RIS is required, assessing estimates of regulatory costs and offsets, and vetting the adequacy of RIS drafts.

Office of Deregulation

The Division within the Department of the Prime Minister and Cabinet responsible for providing advice to the Prime Minister on deregulation policy.

Offset

A reduction in existing regulatory burden to ensure the regulatory cost of new regulation is negated.

Opportunity cost

A benefit foregone by having to comply with a regulation.

Post-implementation review (PIR)

A review conducted after a regulatory policy decision is implemented, normally to test whether the regulation is performing as intended, is still relevant and needed.

Quasi regulation

Any rule or requirement that is not established by a parliamentary process, but which can influence the behaviour of businesses, community organisations or individuals. Examples include industry codes of practice, guidance notes, industry–government agreements (co-regulation) and accreditation schemes.

Red Tape/Green Tape

The term in general usage for a process or other requirement of government perceived to impose an unwelcome burden on business, community organisations or individuals. Green Tape refers specifically to processes or requirements associated with environmental or heritage protection.

Regulator behaviour

Any aspect of the way regulation is applied or administered which has the effect of altering its impact, positively or negatively.

Regulation

Any rule endorsed by government where there is an expectation of compliance. This includes legislation, regulations, quasi-regulations and any other aspect of regulator behaviour which can influence or compel specific behaviour by business, community organisations or individuals. This includes red tape burden imposed by the Commonwealth’s procurement, grants and cost recovery frameworks.

Regulation Impact Statement (RIS)

A statement Commonwealth agencies must produce as part of the policy making process when a decision is likely to have a regulatory impact on business, community organisations or individuals.

Regulatory impact analysis (RIA)

The process of examining the likely impacts of regulatory proposals and the range of alternative options.

Self-regulation

Rules and codes of conduct set up to regulate the behaviour of business or community organisations that are put in place and enforced by the industry or sector itself.

Status quo option

A policy option in which all current policy settings remain as they are as the alternative to regulating; as distinct from the No regulation option. A RIS must analyse the net benefit of either or both the No regulation and Status quo options as a benchmark against which other options can be assessed.

Substantive costs

Any costs (not including financial or administrative) arising as a consequence of new regulation. They may take many forms, including the need for new plant or equipment, building modifications or training courses.

Sunsetting

The practice of specifying a date at which a given regulation will cease to have effect.