From: Subject: DPMC - Cabinet Office - Circulars, Business Compliance Cost Statement Date: Wed, 21 Jan 2009 14:04:41 +1300 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_0000_01C97BD1.34689420" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.5579 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01C97BD1.34689420 Content-Type: text/html; charset="utf-8" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.dpmc.govt.nz/cabinet/circulars/co01/2.html =EF=BB=BF DPMC - Cabinet Office - Circulars, = Business Compliance Cost Statement

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Cabinet Office

 

Cabinet=20 Office Circulars

CO (01) 2

12 March 2001

 

Business Compliance Cost Statement

Summary of Key Points=20

  • From 1 April 2001 all policy proposals submitted to Cabinet = which=20 require a Regulatory Impact Statement (RIS) and which have = compliance cost=20 implications for business should include a Business Compliance = Cost=20 Statement (BCCS) in the Regulatory Impact Statement.=20

  • For proposals considered after 1 April 2001 the RIS/BCCS will = also be=20 published and will also be included in the Explanatory Note to Bills = introduced into the House.=20

  • A Regulatory and Compliance Cost Unit will be established in the = Ministry of Economic Development to review RIS/BCCSs and provide = information=20 and advice to departments. Departments should consult the Unit in = preparing=20 RIS/BCCSs.=20

  • An Officials Committee will be formed to coordinate and monitor = the=20 effectiveness of the government's Business Compliance Cost = Programme,=20 including the RIS/BCCS regime, and report to Cabinet on ways to = enhance its=20 effectiveness.


Introduction

1

The government has agreed to a Business Compliance Cost Programme, = comprising a number of initiatives to minimise compliance costs for = business.=20 In particular, it has agreed to some procedures to ensure that = policies which=20 have compliance cost implications for business are subject to scrutiny = at an=20 early stage. The Business Compliance Cost Statement (BCCS) is a key = element in=20 that scrutiny. This circular outlines the objectives of the BCCS and = how=20 departments should go about meeting them.=20

2

Ministers' offices and Chief Executives should ensure that:=20

  • all staff involved in the preparation of submissions for Cabinet = and=20 Cabinet committees are familiar with the advice in this circular;=20

  • the material in this circular is conveyed to all Crown entities = or other=20 State agencies for which their Minister is responsible, which have = an=20 involvement in the preparation of regulatory proposals.


What are Compliance Costs

3

Compliance costs are the administrative and paper work costs to = business=20 in meeting government requirements. They include both the = administrative=20 burdens and all other compliance costs, such as equipment purchases,=20 retooling, and recurrent production cost. Compliance costs are = distinct from=20 the direct costs of any government requirement, such as the amount of = tax=20 payable.=20

4

Compliance costs include the costs associated with identifying and = understanding the regulatory requirement and may include costs = associated with=20 buying in specialist services (such as legal training, computer = systems,=20 research) to satisfy regulatory obligations (or employing new staff=20 generally). At a less tangible level, compliance costs can arise from=20 increased liability through the establishment of new legal obligations = (such=20 as health and safety requirements).=20

5

The need to comply with government requirements can also have = non-monetary=20 effects such as stress and anxiety. These effects often arise from = uncertainty=20 about obligations and disproportionately affect smaller businesses = with=20 limited management resources who are most susceptible to such costs.=20


Principles of Business Compliance Cost Statement

6

Compliance costs arise from most government interventions. = However,=20 businesses and the economy should not incur more compliance costs than = are=20 necessary. At the stage that new administrative processes and measures = are=20 being designed, compliance costs should be given due weight with other = costs=20 and benefits.=20

7

The following principles underpin the objective of reducing = compliance=20 costs:=20

  • Compliance cost assessment should be an integral part of the = policy=20 development process;=20

  • The reduction of compliance costs is a dynamic process which = includes=20 ongoing monitoring of existing legislation, regulation, and rules, = as well=20 as assessment of the impact of any substantive change to them;=20

  • Recognition that compliance costs are a charge against the = scarce=20 resources of the private sector;=20

  • Compliance requirements need to be critically assessed in terms = of their=20 absolute necessity to achieve the objectives of the policy;=20

  • Compliance cost assessment is recognised as a clear departmental = responsibility and as such should be an integral part of = departmental=20 management accountability.


Inclusion of the BCCS in RISs

8

At present, all papers on policy issues submitted to Cabinet = committees=20 that result in government bills or statutory regulations, must be = accompanied=20 by a Regulatory Impact Statement (see paragraphs=20 3.24-3.39 of the Step by Step Guide). Where new policy proposals = for bills=20 or statutory regulations have compliance costs for business, these = costs must=20 be assessed as part of the policy development.=20

9

At the point that the policy is submitted to Cabinet for = consideration, a=20 new section headed "Business Compliance Cost Statement" is to = be=20 included in the Regulatory Impact Statement. The statement should = contain a=20 description of the business compliance costs (see paragraph 10 below). = This=20 should be a brief statement of no more than a page. If the proposal = does not=20 involve compliance costs for business, a statement should be made in = the RIS=20 to this effect.=20


Content of Business Compliance Cost Statement

10

The business compliance cost statement should identify:=20

  • the source of any compliance costs;=20

  • the parties likely to be affected, by sector and size of firm;=20

  • quantitative (if possible) or qualitative estimates of = compliance costs=20 (both in aggregate and upon individual firms, persons);=20

  • the longer term implications of the compliance cost for business = - are=20 they one-off costs? Will they be reducing over time?=20

  • an assessment of the risks associated with any estimates and the = level=20 of confidence that can be placed on the compliance cost assessment;=20

  • the key issues relating to compliance costs identified in = consultation;=20

  • any overlapping compliance requirements with other agencies; and =

  • the steps that were taken to ensure that compliance costs were=20 minimised.


Requirement for Cabinet Submissions

11

The existing section in the Cabinet submission format headed = "Regulatory=20 Impact Statement" should be amended to read "Regulatory Impact and=20 Compliance Cost Statement." This section should include a one = paragraph=20 summary of the BCCS contained in the RIS, in addition to the = requirements=20 under the Regulatory Impact Statement heading.=20

12

Consultation with the Regulatory and Compliance Cost Unit of the = Ministry=20 of Economic Development (see para 20) should be noted on the CAB 100=20 consultation form, in addition to any other consultation that has = taken place=20 on the submission with the Ministry of Economic Development.=20


Publication of RIS/BCCS

13

The transparency and openness of the regulation-making process to = the=20 political, parliamentary, and public arenas is intended to improve the = quality=20 of regulatory interventions and ensure compliance costs are fully = considered=20 when regulatory proposals are developed.=20

14

Cabinet has agreed that for proposals considered after 1 April = 2001, the=20 RIS/BCCS will be published. The RIS/BCCS will be:=20

  • attached to the press statement announcing any new policy;=20

  • lodged on the responsible department's website, and a dedicated = Ministry=20 of Economic Development website. When the responsible Minister = and/or=20 Cabinet determines the RIS/BCCS is ready for publication, = departments must=20 send an electronic version of the RIS/BCCS, along with the = departmental=20 website reference, to the Ministry of Economic Development at ris-bccs@med.govt.nz;=20

  • included in the Explanatory Note to Bills that are introduced = into the=20 House.

15

Departments should ensure that a suitable electronic version of = the=20 RIS/BCCS (in ASCII or Microsoft Word 97 format) is supplied to the=20 Parliamentary Counsel Office (PCO) in sufficient time to enable it to = be=20 included in the copies of the draft Bill that are printed for = submission to=20 the Cabinet Legislation Committee (LEG).=20

16

RIS/BCCSs for incorporation in explanatory notes must, so far as = possible,=20 follow the standard format specified by the PCO, as the typesetting = process=20 for the printing of Bills imposes limitations on the format for = explanatory=20 notes to Bills. The PCO will issue those specifications shortly. = Departures=20 from this format, or requests for the inclusion of non-text material = such as=20 tables or graphs, may not be able to be accommodated, or may result in = delays=20 in the production of LEG copies of the Bill.=20

17

Enquiries about the PCO's requirements for RIS/BCCSs should be = directed to=20 the PCO team leader responsible for the department's legislation.=20

18

The decision on the precise timing of publication is left to the=20 responsible Minister and/or Cabinet. Ministers may wish to review and = amend=20 the RIS/BCCS to ensure that it fully reflects the government's = position and is=20 of a high standard. Some changes may therefore take place after = Cabinet=20 consideration of the Cabinet submission to which the RIS/BCCS is = attached.=20

19

There may be instances where it is undesirable to publish the = RIS/BCCS;=20 for example, if the RIS deals with matters which, if disclosed = publicly, would=20 prejudice the security, defence, international relations, or economy = of New=20 Zealand. The criteria set out in the Official Information Act 1982 = will guide=20 decisions to withhold public disclosure of a RIS.=20


Assistance from the Ministry of Economic Development =

20

A Regulatory and Compliance Cost Unit is being established in the = Ministry=20 of Economic Development to review RIS/BCCSs and provide advice to = departments=20 on RIS/BBCS principles and processes. Departments should consult with = the Unit=20 on RIS/BCCSs as part of the interdepartmental consultation process. = This is in=20 addition to consultation with the Ministry of Economic Development on = relevant=20 policy issues.=20

21

Although the Unit will primarily have an education role, on an = exceptions=20 basis, the Unit can bring to the Chair of the Officials Committee (see = below)=20 concerns that it has with specific RIS/BCCSs.=20


Officials Committee

22

Cabinet has agreed that an Officials Committee, chaired by the = Department=20 of the Prime Minister and Cabinet, and comprising Treasury, State = Services=20 Commission, Ministry of Economic Development, Ministry for the = Environment,=20 Department of Internal Affairs and other coopted departments, be = formed to:=20

  • coordinate and monitor the effectiveness of the Business = Compliance Cost=20 Programme, including the RIS/BCCS regime;=20

  • ensure that departments are equipped to undertake effective = compliance=20 cost reduction; and=20

  • identify and report to Cabinet on changes to the Programme that = would=20 enhance its effectiveness.


Further Information

23

The Regulatory and Compliance Cost Unit is preparing more detailed = guidelines on the preparation of BCCSs. These guidelines will be = issued to=20 departments shortly.=20

24

Enquiries about the requirements in this circular should be = directed to:=20

Regulatory and Compliance Cost Unit
Ministry of Economic = Development=20
PO Box 1473
WELLINGTON


Marie Shroff
Secretary of the Cabinet

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