NO.086

PRODUCTIVITY COMMISSION TO PROMOTE REGULATORY REFORM BY DEVELOPING CROSS-JURISDICTIONAL BENCHMARKING INDICATORS.

The Treasurer today announced the Productivity Commission will undertake a study to develop performance indicators and reporting framework options for an ongoing assessment and comparison of regulatory regimes across all levels of government.

Periodic benchmarking of regulatory performance will increase transparency and incentives for governments to reduce unnecessary regulation. Decreasing the regulatory burden on business and ensuring regulation is efficient can contribute significantly to Australia’s productivity and economic competitiveness and the Australian population’s wellbeing.

Benchmarking across jurisdictions will provide useful information for businesses in making decisions about where in Australia to invest and do business. Business will be able to compare States and determine which State is the most competitive state in which to do business.

Regularly assessing cross-jurisdictional business regulation will help governments and businesses to identify best practice regulatory performance, encouraging reform effort.

This benchmarking study complements other recent Government regulation reform and reduction initiatives such as the Taskforce on Reducing Regulatory Burdens on Business (Banks Taskforce) and the Productivity Commission’s annual regulation review process.

The study will assist the Council of Australian Governments (COAG) to implement its February 2006 in-principle decision to adopt a common framework for benchmarking, measuring and reporting on the regulatory burden on business. The Banks Taskforce also recommended regulatory benchmarking across jurisdictions.

Benchmarking across jurisdictions would provide useful information for businesses in making decisions about where in Australia to invest and do business. Business will be able to compare States and determine which State is the most competitive State in which to do business.

The terms of reference for the study are attached.

Further information on the study can be obtained from the Productivity Commission’s website at

www.pc.gov.au or by contacting the Commission directly on 02 6240 3239.

MELBOURNE

11 August 2006

Contact: Renae Stoikos

03 9650 0244

Terms of reference

PERFORMANCE BENCHMARKING OF AUSTRALIAN BUSINESS REGULATION

Productivity Commission Act 1998

The Productivity Commission is requested to undertake a study on performance indicators and reporting frameworks across all levels of government to assist the Council of Australian Governments (COAG) to implement its in-principle decision to adopt a common framework for benchmarking, measuring and reporting on the regulatory burden on business.

Stage 1: Develop a range of feasible quantitative and qualitative performance indicators and reporting framework options

In undertaking this study, the Commission is to:

1. develop a range of feasible quantitative and qualitative performance indicators and reporting framework options for an ongoing assessment and comparison of regulatory regimes across all levels of government.

In developing options, the Commission is to:

• consider international approaches taken to measuring and comparing regulatory regimes across jurisdictions; and
• report on any caveats that should apply to the use and interpretation of performance indicators and reporting frameworks, including the indicative benefits of the jurisdictions’ regulatory regimes;

2. provide information on the availability of data and approximate costs of data collection, collation, indicator estimation and assessment;

3. present these options for the consideration of COAG. Stage 2 would commence, if considered feasible, following COAG considering a preferred set of indicators.

The Stage 1 report is to be completed within six months of commencing the study. The Commission is to provide a discussion paper for public scrutiny prior to the completion of its report and within four months of commencing the study. The Commission’s report will be published.

Stage 2: Application of the preferred indicators, review of their operation and assessment of the results

It is expected that if Stage 2 proceeds, the Commission will:

4. use the preferred set of indicators to compare jurisdictions’ performance;

5. comment on areas where indicators need to be refined and recommend methods for doing this.

The Commission would:

• provide a draft report on Stage 2 for public scrutiny; and
• provide a final report within 12 months of commencing the study and which incorporates the comments of the jurisdictions on their own performance. Prior to finalisation of the final report, the Commission is to provide a copy to all jurisdictions for comment on performance comparability and relevant issues. Responses to this request are to be included in the final report.

In undertaking both stages of the study, the Commission should:

• have appropriate regard to the objectives of Commonwealth, state and territory and local government regulatory systems to identify similarities and differences in outcomes sought;
• consult with business, the community and relevant government departments and regulatory agencies to determine the appropriate indicators.

A review of the merits of the comparative assessments and of the performance indicators and reporting framework, including, where appropriate, suggestions for refinement and improvement, may be proposed for consideration by COAG following three years of assessments.

The Commission’s reports would be published.

PETER COSTELLO