Prime Minister’s exemptions
Only the Prime Minister can exempt a government entity from the need to complete a RIS, and only then in very limited circumstances, namely:
- When there are truly urgent and unforeseen events requiring a decision before an adequate regulatory impact assessment can be undertaken.
- Where there is a matter of Budget or other sensitivity and the development of a RIS could compromise confidentiality and cause unintended market effects or lead to speculative behaviour which would not be in the national interest.
If the Prime Minister grants an exemption, the agency will not be deemed as non- compliant with the RIS requirements. When the decision is publicly announced, it should be recorded that the RIS was subject to a Prime Minister’s exemption and the reason noted on the OBPR website.
If a decision to regulate results in legislation, the fact that an exemption was granted by the Prime Minister should also be noted in the explanatory material.
Where a Prime Minister’s exemption is granted, agencies are still required to quantify the cost of the regulation and identify offsets and provide those costings to OBPR within three months of the decision. Once costings are agreed they should be sent to the relevant portfolio Minister and the Prime Minister. The OBPR will also publish the costing information on the OBPR’s website together with the fact that a Prime Minister’s exemption was granted.
A Post Implementation Review should be completed within two years of the decision for all matters covered by a Prime Minister’s exemption.
Where a policy proposal is not expected to go to Cabinet, the Prime Minister may grant in writing an extension of time for completing the quantification of regulatory costs and identified offsets for the applicable RIS. An extension may be granted if the RIS is complete apart from the costings and the agency requires additional time to complete the costings. A minister wishing to obtain an extension should write a letter to the Prime Minister explaining why an extension is required for completing the quantification of regulatory costs.
When the policy decision is announced, the RIS will be published on the OBPR website noting that the RIS is not yet compliant as the costs will need to be agreed at a later date. When the costs are agreed, the OBPR will publish the costs on the OBPR website noting that the RIS is compliant.
A costing extension may also be granted via the same process if a matter is going to Cabinet, even if it is purely deregulatory.
A RIS is not required for a regulatory proposal where an independent review or other similar mechanism has undertaken a process and analysis equivalent to a RIS. Your deputy secretary, secretary or chief executive must certify the review has followed a similar process to that required for a RIS and has adequately addressed all seven RIS questions.
All regulatory costs and offsets must still be agreed by OBPR in the normal way even though OBPR does not assess the independent review itself.
Agencies are encouraged to consult OBPR when preparing review terms of reference to ensure that each of the seven RIS elements, including quantification of regulatory costs and identified offsets will be addressed.
A RIS covering matters which were the subject of an election commitment will not be required to consider a range of policy options. Only the specific election commitment need be the subject of regulatory impact assessment and in this situation, the focus should be on the commitment and the manner in which the commitment should be implemented.
A carve-out is a standing agreement between the OBPR and a department, removing the need for a preliminary assessment to be sent to the OBPR for certain types of regulatory change. A carve-out can be used when anticipated regulatory changes are minor or likely to occur on a regular basis.
Matters subject to a carve-out must be minor or machinery in nature. Carve-outs cannot be applied to proposals where Cabinet is the decision maker.
Cabinet Secretary’s exemptions
The Cabinet Secretary can, in some circumstances, agree to allow a matter to go before Cabinet where the RIS outlines regulatory costs but not offsets. Where this happens, the relevant agency will have one month to identify offsets and provide details to OBPR for assessment. OBPR will follow up your agency to ensure finalisation of offsets within the one month time limit.
Revenue raising and protection measures
A RIS dealing with revenue raising or revenue protection measures need only address the best means of implementing the proposed measure. This is because a full cost benefit analysis for revenue measures is not possible without also considering how the revenue will be spent. Therefore, any RIS in this category does not need to address the first two RIS Questions unless any revenue impacts are supplementary to a non-revenue policy objective. Further, the third and fourth RIS Questions can be confined to options for implementing the decision, since it is not relevant to consider a ‘do nothing’ option or the option of raising revenue through an alternative means.
A RIS dealing with a measure to protect the integrity of an expenditure programme does not need to consider how it is funded or how any savings might be used.