Reforms cost recovery summary

This consultation closed in June 2015 and relates to our Cost Recovery Discussion Paper

Comments

Issue

Option 1

Stakeholders comments

Five private industry submissions supported Option 1 to cover the costs of implementing the new reforms.

Specific comments supporting Option 1:

  • This   seemed the most equitable option.
  • Fairest   for all concerned. Larger operators introducing higher brackets and can   afford the additional cost.
  • A fair offset of cost against   the size of the business.

Specific comments not supporting Option 1:

  • Four   private businesses were concerned Option 1 charges more from high value users,   who may not use the system more or gain a proportionally increased   functionality from proposed changes to new chemicals and thus subsidising   industries that currently need to apply for a permit or certificate.
  • One   submission noted Option 1 would over-recover costs.
NICNAS response

Noted.

A higher registration charge is attributable to companies that introduce a higher value of industrial chemicals. The greater value of industrial chemicals introduced generally reflects a larger volume of industrial chemicals introduced. A larger volume means greater potential exposure and therefore greater potential risk to workers, the public and the environment from exposure to the chemicals, thus a greater need for regulation. This assumption will be monitored, and amendments to the charging structure may be made in the future where supported by evidence.

Option 1 potentially recovers $13,000 above the expected expenditure of $2.517 million in 2015-16. Due to the uncertainty in the number of companies that will register in any one year, all revenue is an estimate only. The estimated level of over recovery is less than 1% of the expected expenditure.

Issue

Option 2

Stakeholders comments

Two private businesses supported Option 2 to cover the costs of implementing the new reform.

Specific comments supporting Option 2:

  • Ensures full recovery of the implementation cost, without over recovery.
  • Spreads the cost of system improvements more evenly over users, with a price per user.
  • There is a base of people at NICNAS, irrespective they have to assess one or 100 new chemicals. Thus a flat rate should be charged.

Specific comments not supporting Option 2:

One submission noted Option 2 will burden Level B and C registrants (small business) with no time to accrue for the expenditure.

NICNAS response

Noted.

The cost of reform implementation is separate from the cost of chemical assessments undertaken by NICNAS.

Issue

Charge should be a percentage of introduction

Stakeholders comments

Two submissions suggested the registration charge should be a percentage (%) of introduction value. Specific comments:

  • Regressive nature of the tax NICNAS imposes on smaller businesses.Existing fee structure is not ethical.
NICNAS response

The structure of the registration levels is legislated in the ICNA Act. This structure cannot be changed before the 2015-16 registration year.

Issue

New tier/s >$5M

Stakeholders comments

One submission suggested additional tiers for companies introducing >$5 million. The submission noted that for companies in the range not far above $5M in value on introduced chemicals the registration fee is very regressive.

NICNAS response

The structure of the registration levels is legislated in the ICNA Act. This structure cannot be changed before the 2015-16 registration year.

Issue

Hybrid of option 1 and 2

Stakeholders comments

One submission suggested a hybrid of Option 1 and 2.

A+$62=$200, B +$195=$600, C+$1020=$3000, D+$2900=$22700

NICNAS response

Level A registrants cannot be asked to pay a registration charge (see below). The increase places a higher proportional burden on level B and C registrants, with a ~50% increase from 2014-15 registration charges, while the level D registration charge increases by only 15%.

Issue

Level A should contribute

Stakeholders comments

Three submissions from private businesses suggested Level A registrants should pay some contribution for the reform implementation.

NICNAS response

The ICNA Act specifies that Level B-D registrants are chargeable and are subject to pay the registration charge.

The ICNA Act specifies that Level A registrants pay a fee for being registered. Level A registrants pay a fee matching the administration cost for listing on the Australian Register of Introducers.

Issue

Concerns over fee increase

Stakeholders comments

A number of submissions from industry associations and private businesses noted concerns with the proposed registration increase and were opposed to any increase in cost recovery at this time.

Specific comments included:

  • More informed comment could be provided if there were more details on the implementation costs and how these were derived.
  • The increase is being progressed before the full the detail as to how the $22.7M reduction in industry’s regulatory cost will be achieved and measured. The increase should be deferred until efficiency savings have been delivered.
  • Implementation should be funded from within existing resources.
  • Cost of implementing the reforms seems high, especially compared to APVMA reform implementation.
  • May not be appropriate to cost recover all implementation costs.
  • Capital costs should not be cost recovered.
NICNAS response

The Australian Government decided that the cost of implementation of reforms will be recovered from industry.

A Regulation Impact Statement (RIS) entitled “Options for Reforming the National Industrial Chemicals Notification and Assessment Scheme” was prepared, describing the key steps taken during the review and includes an assessment of the costs and benefits of four reform options developed for consideration by government. The Australian Government has agreed to implement option 3 from the RIS, which is available on the website of the Office of Best Practice Regulation. Implementation details will be subject to ongoing consultation with interested parties and costs recovered in accordance with the Cost Recovery Guidelines (July 2014).

Issue

Timing of increased costs

Stakeholders comments

Three industry associations and one private businesses were disappointed increases were effective almost immediately, when expense budget are in place for 2015-2016 financial year.

NICNAS response

The related increases commence from the 2015-16 financial year.

Issue

Reduction in NICNAS expenditure post reforms

Stakeholders comments

A number of submissions from private businesses and industry associations noted concerns that there was no reduction in NICNAS expenditure apparent as a result of the reforms.

NICNAS response

Noted. As noted in the RIS for the NICNAS reforms, with a reduction in pre-market assessments and an increase in post-market monitoring or auditing, a revision of the existing cost recovery arrangements will be necessary to ensure that NICNAS can deliver the necessary post-market monitoring and auditing framework. This revision process would determine the resources required to administer NICNAS, and thus the nature of fees for the remaining streamlined assessment and the extent of any increase in the existing levy on industry to fund the increased post-market surveillance, noting any reduced activity for functions transferred to other agencies and efficiencies gained. Any changes to cost recovery arrangements will occur in consultation with interested parties.

Issue

Short period of time for comment on discussion paper

Stakeholders comments

Three industry associations and one private business expressed disappointment about the timing of the announcement of reforms, providing 2 weeks to make comments on discussion paper. Concerns were expressed regarding engagement with stakeholders or consideration of views put forward.

NICNAS response

Noted.

NICNAS looks forward to continuing meaningful engagement with stakeholders as implementation of the reforms proceeds.

Issue

General comments regarding the reform process

Stakeholders comments

A number of submissions made comments regarding the details of the reforms.

NICNAS response

Noted.

Implementation details will be subject to ongoing consultation with interested parties.

Last update 14 March 2019