Productivity Commission: Regulatory Impact Analysis – Benchmarking

    14 May 2012

    CropLife supports the use of regulatory impact analysis as an important tool to identify the most effective and efficient means to achieve a desired policy objective. CropLife also considers that the current arrangements in most jurisdictions are broadly capable of achieving this. However, regulators and other agencies often fail to apply impact analysis guidelines in a manner that will deliver an accurate measure of the impact on governments, industry and the community.

    CropLife has concerns that some regulatory impact analyses tend to be used by regulators to justify decisions that have already been taken by regulators and to support preferred regulatory options. This approach undermines the true purpose of regulatory impact analysis, which is to objectively identify the most efficient and effective option for achieving a regulatory or policy outcome. On this basis, CropLife welcomes the Productivity Commission’s study.

    Clear, consistent and transparent benchmarks for assessing the quality of regulatory impact assessment should result in higher quality analysis across all levels of government and support measurable improvements in regulatory decision making.

    This concern is highlighted by the fact that many impact analyses severely underestimate implementation and other regulatory costs, and over‑estimate benefits expected to accrue.

    Some impact statements that have identified regulatory impacts as being small and net positive for governments, community and industry have, on closer examination, been reliant on overly optimistic and inaccurate assumptions that undermine the validity of the conclusion.

    Finally, ‘quality checks’ by independent agencies such as The Office of Best Practice Regulation are often insufficient to identify key failings in impact analyses. Indeed, while they can provide assurance that government guidelines have been strictly followed, they are not able to identify or challenge many of the key assumptions contained within the analysis.