Regulatory advice and costing services
Trusted advice to government and industry
Regulatory advice and costing is a core part of our service offering and includes regulatory impact statements, regulatory cost-benefit analysis, fee setting analysis and red tape costing.
Deloitte Access Economics provides regulatory advice and costing services across a broad range of areas including regulatory review, regulatory impact statements, regulatory cost-benefit analysis, fee setting analysis, cost recovery review, and red tape and regulatory burden costing. Our services are geared towards providing evidence-based regulatory advice that resonates with decision makers and informs the development of legislative and regulatory change.
Our extensive experience in this area demonstrates our ability to deliver these services to a wide range of clients including state/territory government departments, federal government departments, regulatory agencies, other government agencies and corporate clients. We have an unparalleled in-house analytical capability, both quantitative and qualitative, based on our team’s broad range of expertise. This experience and capability allows us to deliver real value to our clients.
Regulatory review is an important part of the regulatory cycle and involves the evaluation of existing regulations to ensure they remain effective at addressing the underlying problem and do so at least cost to regulated parties. Regulatory review is an important precursor in cases where governments are considering re-making regulations, including in situations where regulations are sunsetting. In many cases, regulatory review is incorporated into the regulatory impact statement process. It is also important in the context of government efforts to reduce regulatory burdens on business and other parties. Regulatory review can help identify key areas for regulatory reform to improve the effectiveness of regulations and reduce costs to business and society.
Deloitte Access Economics’ experience spans a wide range of regulatory areas and industries, including building and construction, hospitality, food manufacturing, advanced manufacturing and occupational health and safety. Recent work includes a project for a state government client to review key areas of regulation and develop proposals for reform.
The preparation of regulatory impact statements (RISs) forms a key part of the regulatory development and review process in many jurisdictions. RISs include an outline of the issues to be addressed through regulation, the objectives of government intervention, options to achieve the objectives, an assessment of costs and benefits and an outline of the preferred option. Requirements relating to the preparation of RISs vary depending on the jurisdiction and RIS approval agencies in each jurisdiction (such as the Office of Best Practice Regulation) place an emphasis on different areas. The approach taken and the level of analysis required depends on whether the RIS relates to amending or sun-setting regulations.
Deloitte Access Economics’ experience spans a wide range of regulatory areas and industries, including energy, resources, education, building, occupational health and safety, national parks, land titles, biosecurity and therapeutic goods. Recent work includes a project for a state government client to prepare a RIS in relation to energy consumer protection regulations.
Regulatory cost-benefit analysis forms a key input to regulatory reviews and regulatory impact statements (RISs). Such analysis is also undertaken where regulatory proposals are at the early stages of development, well before a RIS is required. In general, regulation can be justified in cases where there is clear role for Government (existence of a ‘market failure’) and where the benefits to society outweigh the costs. In relation to this latter point, this is where regulatory cost-benefit analysis becomes crucial. There are a broad range of techniques available in this area, the choice of which depends on the regulatory proposal in question and the availability of data.
Deloitte Access Economics has significant experience in the application of different techniques such as full cost-benefit analysis, cost effectiveness analysis, multi-criteria analysis and break-even analysis. Recent work includes a project for a Commonwealth government client to undertake a cost benefit analysis of proposals for the regulation of food labelling.
Fee setting analysis can be applied across a broad range of agencies and organisations including regulators, government departments and non-government member organisations. In many cases, fees are set on the basis of cost recovery principles. However, fees for non-government organisations may be set according to other factors such as members’ willingness/ability to pay or the extent to which lower fees may help to retain and attract members. Fee setting analysis includes consideration of different options to structure fees such as a flat fee per application, periodic fees, variable fees for different levels of service and variable fees by size/revenue etc. The choice of the most appropriate structure is typically based on equity, efficiency, simplicity and demand considerations.
Deloitte Access Economics has experiencing in undertaking these projects for both government departments and non-government member organisations. Recent work includes a project for a national member organisation to review its membership structure and pricing approach with a view to increasing its member base.
Cost recovery review forms a key part of the process of setting regulated fees and charges. The process ensures that fees and charges reflect the efficient costs of providing government services and that those who benefit from a government service or give rise to the need for regulation pay the full cost. Cost recovery review typically involves analysis to determine which government activities are cost recoverable, costing of those activities, allocation of overhead and other indirect costs and calculation of fee amounts. The degree of analysis depends on the nature of the government service or regulatory activity and the availability of data.
Deloitte Access Economics’ experience includes projects for governments across numerous jurisdictions. This includes high level short-term reviews and more detailed longer term reviews involving detailed activity based costing surveys. Recent work includes an activity-based costing analysis we undertook for a national regulator that has since been used as the basis for setting its cost recovery fees.
Red tape and regulatory burden costing involves estimating the dollar impact of government regulation on businesses, individuals and non-for-profit organisations. This impact can be measured at the aggregate level through a regulatory burden baseline costing or the micro level through the costing of individual regulatory requirements. Such costings can be undertaken for existing regulations or proposed new regulations and are typically required to measure against government regulatory burden reduction targets. Requirements and guidelines vary depending on the jurisdiction in question, with each placing a different emphasis on the types and extent of costs measured.
Deloitte Access Economics’ experience includes undertaking costings across a wide range of regulatory areas, developing and reviewing methodologies for measuring regulatory burden and identifying areas for regulatory reform to reduce regulatory burden. Recent work includes a project for a national regulator to develop tailored guidelines and an Excel tool for measuring regulatory burdens, and the application of that tool to reforms proposed at the time.