11 December 2013
On 15 November 2013, the Standing Committee on Transport and Infrastructure endorsed the National Standard for Commercial Vessels (NSCV) to align domestic commercial vessel standards to national laws and international agreements.
The sections of the NSCV have progressively replaced the Uniform Shipping Laws Code, which has been the basis of standards for domestic vessels since the late 1970s. This Regulatory Impact Statement (RIS) considers one of the final pieces of the NSCV – the arrangements, accommodation and personal safety for domestic commercial vessels.
The regulation seeks to mitigate risks to people on a vessel by highlighting key aspects relevant to the arrangement of a vessel at the design stage and aligns with international standards and agreements, as well as domestic requirements for health and safety.
The RIS was prepared by the National Maritime Safety Committee and was assessed as adequate by the OBPR.
6 December 2013
On 26 November 2013, the Chairman of the Australian Communications and Media Authority (ACMA) announced a proposal mandating communication service providers to provide National Broadband Network (NBN) consumers with information about back up batteries.
Currently all NBN consumers are provided with a back up battery, so that in the event of a power failure they will still be able to use the phone services. The NBN phones, unlike phones using a copper wire, will not be able to work in the event of a power failure. However, some consumers do not want the back up battery because they consider it to be unsightly and they can use their mobile phones in the event of a power failure.
Some consumers who do not want the battery may not be aware of the risks they face in the event of a power failure. Under the proposal, communication service providers are required to provide consumers with information enabling them to make an informed decision and to record it.
The proposal has been assessed as likely to have a limited impact on the economy with no impact on competition.
An options-stage RIS has been prepared by ACMA and was certified by the General Manager of its Digital Economy Division, under the best practice regulation requirements. The closing date for submissions is 20 December 2013.
5 December 2013
On 23 November 2009 the Corporations Amendment (Improving Accountability on Termination Payments) Act 2009 (the Act) received Royal Assent. The Act resulted in lowering the threshold for shareholder approval from seven times the total annual remuneration package to one year’s average annual base pay. Other amendments included:
- expanding the scope from directors to include key management personnel; and
- broadening the definition of what constitutes a ‘benefit’, and the creation of a new regulation‑making power to specify whether certain types of payments are, or are not, a termination benefit.
Before the commencement of the Act, shareholders approved the payment of termination benefits to outgoing executives and directors of companies only if the termination payment exceeded seven times the recipient’s total annual remuneration.
A Regulation Impact Statement (RIS) was required for the decision to lower the threshold for shareholder approval, but an adequate RIS was not prepared before the decision was made. The Department of the Treasury was reported as non-compliant with the Australian Government’s best practice regulation requirements in the Best Practice Regulation Report 2008-09. Where a proposal proceeds without an adequate RIS the resulting regulation must be the subject of a Post-implementation Review.
The Post-implementation Review found that lowering the threshold for shareholder approval achieved its policy objectives to: better empower shareholders to disallow excessive termination benefits, particularly where they are a reward for poor performance; improve the accountability of company management in setting remuneration; and promoting responsible remuneration practices. The Post-implementation Review concluded that the policy resulted in an increased level of shareholder control over termination payments to key management personnel, and greater accountability of company management for decisions about termination payments.
The Post-implementation Review prepared by the Department of the Treasury was assessed as adequate by the Office of Best Practice Regulation.
5 December 2013
On 28 July 2010 the Australian Communications and Media Authority (ACMA) introduced the Broadcasting and Datacasting Services (Parental Lock) Technical Standard 2010 (Parental Lock Standard) to ensure that digital televisions and digital receivers sold in Australia have a parental lock capability.
A Regulation Impact Statement was required for the proposal but not prepared. As a result, a Post-implementation Review (PIR) has been undertaken in line with best practice regulation requirements.
The PIR found that the Parental Lock Standard has had a low to negligible cost on industry and consumers and that the benefits have also been minor. Given the relatively high level of compliance prior to the introduction of the Parental Lock Standard and the absence of any complaints of non-compliance since then, it was concluded that the measure has been successful in achieving the objective of universal availability of the parental lock in digital televisions and receivers in Australia.
The PIR has been prepared by the Department of Communications and assessed as adequate by the Office of Best Practice Regulation.
29 November 2013
On 13 November 2013, the Government introduced legislation that provides transitional arrangements for importers of synthetic greenhouse gases (SGGs), prior to the repeal of the carbon tax (proposed to take effect from 1 July 2014). The arrangements provide for an exemption from the equivalent carbon tax where SGGs are imported but not released onto the Australian market before repeal of the equivalent carbon tax.
Under current arrangements, the equivalent carbon tax is applied when SGGs enter the economy, either at the point of import or manufacture. The equivalent carbon tax is a significant percentage of the price of SGGs. For example, the equivalent carbon tax on HFC134a is $30.40 per kilogram in 2013-14. In comparison the cost to purchase and transport HFC134a from overseas without the equivalent carbon tax is less than $10 per kilogram.
The Regulation Impact Statement (RIS) prepared by the Department of the Environment states that there may be potential shortages of SGGs prior to the repeal of the equivalent carbon tax on 1 July 2014. Shortages may occur as participants in the supply chain seek to minimise their inventories prior to the repeal of the equivalent carbon tax. In particular, importers may reduce or stop imports prior to 1 July 2014. The RIS considers that this could have flow-on impacts to other sectors of the economy, such as through products that use SGGs as an input.
It is considered that removing the obligation to pay the equivalent carbon price where SGGs are imported but not released onto the Australian market before repeal of the equivalent carbon tax will address the problem. In practice the exemption applies where the importer meets three criteria: imports SGGs between 1 April 2014 and 30 June 2014; enters the gas into a Customs warehouse; and does not remove the gas from the warehouse until 1 July 2014.
The measure was generally supported by industry. The RIS considers that there are no compliance costs.
A single-stage RIS was prepared by the Department of the Environment and certified as adequate by a Deputy Secretary from that Department. The Office of Best Practice Regulation has assessed that the single-stage RIS contains an adequate level of analysis and meets the Government’s best practice regulation requirements.
29 November 2013
The Australian Government has tabled legislation changing the regulation of registered organisations. These changes are a specific election commitment of the Government.
Registered organisations are those employer and employee associations that are registered under the Fair Work (Registered Organisations) Act 2009 (RO Act) to allow them to represent the interests of their members in certain workplace matters.
Under the RO Act, registered organisations must comply with detailed regulations in relation to registration, rules, financial reporting, elections, conduct of officers and other matters. The Government has committed to increase the statutory and fiduciary obligations on registered organisations to more closely align them with those that corporations have to meet. The main changes are:
- increasing civil penalties and introducing criminal offences for serious breaches of officers’ duties;
- increasing the requirements surrounding officers’ disclosure of material personal interests, and changes to grounds for disqualification and ineligibility for office; and
- strengthening financial accounting and disclosure obligations under the RO.
The main benefit of the changes is likely to be increased confidence in the operation of registered organisations by their members. The costs are largely in the form of additional compliance costs for the registered organisations; these have been estimated at $331,346 a year across all organisations.
A details-stage Regulation Impact Statement (RIS) was prepared and certified by the Department of Employment, and has been assessed as adequate by the Office of Best Practice Regulation.
28 November 2013
On 13 November 2013 the Treasurer introduced the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 into Parliament.
The Minerals Resource Rent Tax (MRRT) is a profits tax which is levied at an effective rate of 22.5 per cent of the mining profit of coal and mining projects within Australia. The MRRT applied from 1 July 2012 to taxable resources (broadly iron ore and coal) after they were extracted from the ground but before they underwent any significant processing or value adding. Miners with an annual mining profit of less than $75 million are exempted from paying MRRT.
The Bill repeals the Minerals Resource Rent Tax Act 2012 from 1 July 2014. The Bill also repeals or revises a number of related measures, the costs of which were intended to be met by revenue from the MRRT, including the: company tax loss-carry back arrangements; geothermal expenditure deduction; low income superannuation contribution; low income support bonus; schoolkids bonus; capital allowances for small business entities; and the superannuation guarantee charge percentage increase.
The Regulation Impact Statement (RIS) found that the MRRT imposed a significant regulatory and compliance burden on the iron ore and coal mining industries, which was exacerbated by its complex design. The RIS concluded that the legislative package to repeal the MRRT will reduce the compliance cost on industry and promote activity in the mining sector by abolishing the MRRT. The RIS noted that while there will be some once off adjustment costs estimated at $800 per company (($243,000 in total for the industry (a ten year average of $24,300 per annum)) to adjust their systems for the repeal of the MRRT, the ongoing compliance savings are estimated as $35,000 per company per annum, or $10.5 million per annum for the industry.
A single-stage RIS was prepared by the Treasury, certified at the Deputy Secretary level, and has been assessed as adequate by the Office of Best Practice Regulation.
28 November 2013
On 13 November 2013, the Prime Minister introduced the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013. The repeal of the carbon tax is an election commitment of the Government. The Office of Best Practice Regulation (OBPR) assessed the significance of this proposal as A-level, meaning it is expected to have significant economy-wide impacts.
The carbon tax is directly applied to a limited range of inputs, and is paid by a relatively small number of businesses or ‘liable entities’. The carbon tax directly increases the cost of: electricity and gas; managing landfill and wastewater; liquid fuels for off-road use; and synthetic greenhouse gases. Some of these products, such as electricity and gas, are used as inputs to other production processes. Consequently, a change in the price of an input can also have indirect effects on prices other products. The incidence of these price changes may be borne by businesses or households.
The Regulation Impact Statement (RIS) states that there are two main problems with the carbon tax: the carbon tax increases the cost of living for the household sector; and it increases costs for business, both in terms of higher input costs, and the costs incurred by liable entities in complying with carbon tax obligations.
The RIS outlines the following impacts on the environment, households and businesses:
- The carbon tax was implemented to achieve a 5 per cent reduction in greenhouse gas emissions by 2020. The Government is committed to achieving this through other policy approaches. Therefore it is not expected that there will be a significantly different environmental outcome in terms of expected GHG emission reductions.
- It is expected that household cost of living will be lower.
- It is expected that the cost of inputs for business will be lower, and this may have subsequent economic impacts resulting from those cost reductions being passed through to end users of affected products and services, such as consumers. The Australian Competition and Consumer Commission will have a role in monitoring these expected price reductions.
It is estimated that the policy will result in an overall reduction in business compliance costs of $85.3m in the first year following repeal.
A details-stage RIS was prepared by the Department of the Environment and certified as adequate by a Deputy Secretary from that Department. Consistent with the Government’s best practice regulation requirements the RIS focussed on the impacts of the election commitment and did not consider alternative approaches.
The Office of Best Practice Regulation has assessed that the details-stage RIS contains an adequate level of analysis and meets the Government’s best practice regulation requirements.
26 November 2013
On 22 October 2013, the Assistant Minister for Infrastructure and Regional Development introduced a requirement through Australian Design Rules 31/03 and 35/05 under section 7 of the Motor Vehicle Standards Act 1989 for Electronic Stability Control (ESC) to be fitted to new light commercial vehicles (LCVs). ESC will be mandated from 2015 for new vehicle models and 2017 for all new vehicles. ESC is already mandatory for light passenger vehicles.
ESC is an advanced vehicle stability system that works by automatically braking individual wheels to help the driver steer in the intended direction during a skid. Research has shown that ESC in LCVs is likely to be around 30 per cent effective at averting single vehicle crashes.
Benefit cost analysis shows that, even in the presence of high predicted fitment rates, there is a case for mandating ESC for LCVs, which would provide a reduction in road trauma estimated at 29 lives saved over a 15 year regulation period, with around $79 million in net benefits. The cost for vehicle manufacturers is estimated at around $51 million.
A details-stage RIS was prepared and certified by the Department of Infrastructure and Regional Development. The RIS contains an adequate level of analysis and meets the best practice regulation requirements.
22 November 2013
On 22 October 2013, the Assistant Minister for Infrastructure and Regional Development introduced a requirement through Australian Design Rules 31/03 and 35/05 under section 7 of the Motor Vehicle Standards Act 1989 for Brake Assist Systems (BAS) to be fitted to new light passenger vehicles and light commercial vehicles. BAS will be mandated from 2015 for new vehicle models, 2016 for all new light passenger vehicles and 2017 for all new light commercial vehicles.
BAS are designed to help drivers stop more quickly in an emergency situation. By detecting when a vehicle is undergoing emergency braking and then applying the maximum braking force, BAS can minimise the stopping distance of a vehicle and help to either avoid a collision or reduce its severity. BAS has significant potential to reduce road trauma involving pedestrians and cyclists.
Compared to the business as usual case, the preferred option is estimated to provide net benefits of $30m, saving 10 lives and over 200 serious injuries over a 15-year regulation period. It is also estimated to achieve the highest ongoing fitment rate of BAS in new vehicles, thereby maximising the benefits that BAS has to offer. The option would add an additional cost of around $45 per vehicle.
A details-stage Regulation Impact Statement (RIS) was prepared by the Department of Infrastructure and Regional Development. The RIS contains an adequate level of analysis and meets best practice regulation requirements.