RIS is both a document and, most importantly, the documented result of a mandated process and approach to policy analysis intended to improve the quality of policy-making in the Australian Federal Government in relation to the regulation of business. At the heart of the process, as described by the Commonwealth’s then Office of Regulatory Review (the ORR), were seven key elements that, when successfully completed, it was hoped would provide the decision-maker with the information needed to make an informed decision and better quality regulation. The seven key elements constituted a simple, rational, process-based model of policy-making familiar to all policy analysts, laying out the major tasks that were to be undertaken at each stage of the process, as follows:
a description of the problem or issues which give rise to the need for action and broad goal of the proposed regulation;
a specification of the desired objective(s);
a description of the options (regulatory and/or non-regulatory), expressed as a regulatory form or type, that may constitute a viable means for achieving the desired objective(s);
an assessment of the impact of each option on consumers, business, government and the community — including costs and benefits — noting particularly the impacts on competition, small business and trade;
a consultation statement detailing who was consulted — with a summary of views from the main affected parties — or specific reasons why consultation was inappropriate;
a recommended option, with an explanation of why it was selected and others were not; and
a detailed strategy for the implementation and review of the preferred option (Office of Regulation Review 1998: A2).
The introduction of the RIS system predated the NCP reviews. In 1996-97 RIS was modified and became mandatory for all reviews of existing regulation, proposed new or amended regulation as well as proposed treaties involving regulation that would: directly affect business; have a significant indirect effect on business; or, restrict competition (Head and McCoy 1991; Office of Regulation Review 1998). The RIS system complemented the NCP reviews of existing regulation by focusing on future regulation. Its remit applied to all primary legislation, subordinate legislation and quasi-regulation — the latter referring to the wide range of rules or arrangements where governments influence businesses to comply but which do not form part of explicit government regulation (for example, industry codes of practice, guidance notes, industry-government agreements and accreditation schemes) (Office of Regulation Review 1998: A2-3).
The RIS did not apply to state, territory or local government in the Australian federal system, except insofar as any one or more of them were a party to a regulation developed on an intergovernmental basis within the Council of Australian Governments (COAG), although all bar one of the state and territory jurisdictions have RIS-type systems of their own. An RIS system is also applied by COAG, being largely identical with the federal RIS. In addition, RIS does not apply to tax regulation (although a modified type of RIS is used in this regard) and it is not applied in a number of relatively minor areas (Office of Regulation Review 1998: A4).
With regard to the relevant, mandated stages of RIS:
departments, agencies and statutory authorities considering regulation that might impact on business were required to consult the ORR (now renamed the Office of Best Practice Regulation) at an early stage in the policy development process — the ORR had the authority to decide, in normal circumstances, whether or not an RIS was required;
departments and agencies were required to consult with the ORR when developing terms of reference for reviews of existing legislation or regulations that impact on business;
all RISs were to be developed in consultation with the ORR;
draft RISs were to be sent to the ORR for comment and advice;
the ORR was to advise departments and agencies whether or not a draft RIS complied with the government’s requirements and, importantly, whether or not they contained an adequate level of analysis;
the ORR was to receive all cabinet submissions proposing regulation or treaties and report to cabinet on both compliance with the RIS process and on whether or not the level of analysis was adequate;
the Productivity Commission was to report annually on departmental and agency performance with regard to the completed RIS, both as to process and as to the quality of analysis provided in support of the proposed regulation;
the Office of Small Business (the OSB), from 1999, also was required to publish a set of regulation performance indicators (RPIs) for departments and agencies — assisted by the ORR — and comment on regulation impacting on small business (Office of Regulation Review 1998:A10-14).
While the RIS process was and remains mandatory, the ORR’s judgement as to the adequacy of an RIS process or analysis did not invalidate — or necessarily lead to the rejection of — a proposed regulation. That responsibility remained with the decision-maker involved, notably the Prime Minister and the Cabinet (Office of Regulation Review 1998: A12).