CRIS 2018-19 — Introduction
Cost recovery involves government entities charging individuals or non-government organisations some or all of the efficient costs of a specific government activity. This may include goods, services or regulation, or a combination of them. The Australian Government Charging Framework, which incorporates the Australian Government Cost Recovery Guidelines1, sets out the framework under which government entities design, implement and review regulatory charging activities.
1The Australian Government Charging Framework and the Cost Recovery Guidelines are available on the Department of Finance website.
Purpose of the Cost Recovery Implementation Statement (CRIS)
This CRIS provides information on how the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) implements cost recovery for its regulatory activities. The purpose of this document is to transparently demonstrate compliance with the Cost Recovery Guidelines and to outline changes to existing regulatory fees and charges in 2018-19. The CRIS also reports financial and non-financial performance information for these charging activities and contains financial forecasts for 2018-19 and 2 forward years.
In the financial year 2018-19, regulatory activities remain unchanged from 2017-18 and as such this CRIS applies the current charging model to derive NICNAS fees and charges. It is anticipated that, subject to the passage of the new legislation through Parliament, a new regulatory charging model (and CRIS) will be developed for a new scheme, known as the Australian Industrial Chemicals Introduction Scheme (AICIS) for 2019-20 and forward years (refer to the cost recovery section NICNAS reforms 2019-20 and forward years for details). Therefore, this CRIS only applies to 2018-19.
Description of regulatory charging activity
NICNAS is a statutory scheme administered by the Office of Chemical Safety, within the Australian Government Department of Health. NICNAS was established under the Industrial Chemicals (Notification and Assessment) Act 1989 (the ICNA Act). NICNAS aids the protection of the Australian people and the environment by assessing the risks to occupational health and safety, to public health and to the environment that could be associated with the introduction and use of industrial chemicals. The information from NICNAS assessments is made available to state and territory agencies and other Commonwealth agencies to assist in regulating the use, release and disposal of industrial chemicals and to support the wide range of chemicals management legislation for the protection of human health and the environment.
The key regulatory activities that NICNAS undertakes are listed below and described in more detail in the cost recovery section Business processes of the regulatory charging activity.
- Scientific assessment of new and existing industrial chemicals
- Monitoring and enforcement of statutory obligations under the ICNA Act
- Maintenance of the Australian Inventory of Chemical Substances (the Inventory)
- Corporate and organisational support activities
- Implementing Australia’s obligations under international agreements (relevant to industrial chemicals).
NICNAS contributes to Outcome 5 (Regulation, Safety and Protection) of the Health Portfolio Budget Statements 2018-19. Outcome 5 relates to the protection of the health and safety of the Australian community and preparedness to respond to national health emergencies and risks, including through immunisation, initiatives, and regulation of therapeutic goods, chemicals, gene technology and blood and organ products.
Most of NICNAS’s operational income is collected from the annual registration of importers and manufacturers (introducers) of relevant industrial chemicals. Registrants pay an annual application fee to be listed (or re-listed) on the Register of Introducers of Industrial Chemicals. Where an introducer imports and/or manufactures relevant industrial chemicals above a certain value, an annual registration charge, which is a levy that varies depending on the introduction value of relevant industrial chemicals in that year, is also payable. The registration charge relates to the regulation of the market as a whole and funds regulatory activities that are not attributable to a service provided to a specific introducer. The annual registration charge is administratively simple to collect and pays for activities that regulate the industry as a whole, such as existing chemicals assessments, post-market monitoring, information provision, international engagement and statistics collection.
NICNAS also collects fees for services provided to notifiers of new industrial chemicals, holders of confidence and other parties, based on ‘fee for service’ schedules in accordance with the ICNA Regulations.
Appropriateness of cost recovery and who pays
Government policy is that the full cost of administering NICNAS is recovered from the regulated industry through fees for services and charges paid by industrial chemical importers and manufacturers (introducers). Cost recovery is appropriate because:
- introducers create the need for the regulatory activity by placing industrial chemicals on the market and
- charges for goods and services can give an important message to users or their customers about the cost of resources involved. It may also promote equity by ensuring that those who use, or create the need for Australian Government regulatory services, bear the costs.
Last update 9 August 2018