The NSW Government is strengthening the economy and making it easier to do business by reducing the regulatory burden on compliant individuals and businesses.
Regulators protect the community by reducing and removing harms, and mitigating the risk of harms occurring. An outcomes and risk-based approach to regulation is minimising regulatory costs and maximising outcomes for government, business and the community. It allows compliant businesses to continue to operate and expand their operations.
The responsibilities for the Quality Regulatory Services (QRS) initiative have been transferred to the Better Regulation Division within the NSW Department of Finance, Services and Innovation. The Guidance for Regulators to Implement Outcomes and Risk-Based Regulation (Guidance for Regulators) was updated in October 2016 to reflect this change in responsibilities. The Guidance for Regulators ensures consistent and transparent implementation of an outcomes and risk-based approach to regulation. In line with the approach set out in the Guidance for Regulators, regulators are:
- aligning their regulatory activity with regulatory outcomes to promote flexible and innovative responses to non-compliance, and
- prioritising resources towards those that present the highest risk to regulatory compliance, and reducing regulatory burden on those that are compliant.
The outcomes and risk-based approach to regulation was endorsed by the NSW Government in late 2012, and is articulated in the Government's response to Industry Action Plans.
All 37 NSW regulators with compliance and enforcement responsibilities are on track to progressing implementation towards an outcomes and risk-based approach to regulation. This approach allows regulators to apply more flexible and innovative techniques to compliance and enforcement, and spend more time and resources proactively identifying and mitigating emerging risks. The regulatory burden on business is minimised, supporting and encouraging growth and productivity.
The reforms are consistent with the NSW Government’s priorities for a stronger economy, creating jobs, and improving government services.
Progress towards an outcomes and risk-based approach by NSW regulators 2014-2016
Requirements for Regulators
Under the Quality Regulatory Services (QRS) initiative, NSW regulators are required to implement an outcomes and risk-based approach to regulation. The Guidance for Regulators will assist regulators to reduce the regulatory burden on compliant businesses and individuals, while achieving the most efficient use of limited resources.
The diagnostic tool that complements the Guidance for Regulators allows regulators to assess their current approach against the framework, and identify the areas on which to focus to fully implement the approaches.
The Guidance for Regulators aims to strengthen the NSW economy by introducing five key reforms to make interactions with NSW regulators easier and less burdensome for business and the community:
- Enable electronic transactions
Regulators need to allow for electronic transactions with business including enabling business to lodge or renew applications and update their details electronically, accept electronic payments and access reporting templates and lodge reports electronically.
- Provide clarity in processing timeframes
Regulators will need to set, communicate and report on maximum timeframes for the processing of all license, authorisation and permit applications.
- Provide transparent appeal mechanisms
Regulators need to ensure they provide transparent appeal mechanisms and provide information about them when communicating with business about licensing, compliance and enforcement decisions.
- Promote a risk based approach to compliance and enforcement
Regulators need to promote a risk-based approach to compliance and enforcement so that businesses are not inconvenienced by unnecessary compliance requirements.
- Require a greater focus on regulatory outcomes
Regulators need to have clearly defined outcomes, commence reviewing their outcome monitoring mechanisms as part of regular legislative reviews and commence reporting regularly on their outcomes.
Where possible and pragmatic to do so, NSW regulators implemented reforms one, two and three by the end of 2013, and implemented milestones for reforms four and five by the end of 2014. Full implementation of an outcomes and risk-based approach will take some time, and the graph above demonstrates NSW regulators’ progress from 2014 to 2016.
State Owned Corporations and government agencies which primarily regulate State Owned Corporations, such as the Independent Pricing and Regulatory Tribunal, are excluded from these reforms.