Published Impact Analyses

On 1 July 2013, the Australian Building Codes Board released a consultation Regulation Impact Statement (RIS) assessing the need for fire hose reels in new residential buildings. Currently fire hose reels are required by the National Construction Code as a first fire attack system provided for use by residents. Although effective when used correctly, the value of fire hose reels in buildings has been questioned. This is due to behavioural issues associated with the use of fire hose reels in terms of resident’s awareness and lack of confidence in operating the equipment.  Apart from the status quo, the RIS considers the option of requiring additional fire extinguishers in buildings and removing the fire hose reels requirements.

Derivative contracts are financial instruments that grant rights to a future payment. These payments are usually defined with reference to the value or amount of an underlying asset, rate or index. Derivative contracts can have a number of features or forms. One common example is a call option that gives one investor the right (as opposed to the obligation) to buy an asset from another at a future date for a price agreed today. Derivative contracts essentially allow investors to transfer risk, profit and price exposures between themselves without transferring legal ownership of the underlying asset. Derivatives can be traded on exchanges, such as the Australian Stock Exchange, or between counterparties directly (referred to as ‘over-the-counter’ (OTC) derivatives). A key feature of OTC contracts is that they are not reported on a public exchange, or cleared through a central counterparty.

 On 3 July 2013, the Australian Communications and Media Authority (ACMA) announced a new International Mobile Roaming (IMR) Standard, which requires telecommunications providers of IMR services to implement certain measures over the next three years. These measures aim to reduce the incidence and impact of ‘Bill Shock’, that is, the occurrence of unexpectedly high bills for mobile devices arising from the use of IMR services. The Regulation Impact Statement (RIS) notes that Bill Shock can arise because of the significant differences that can exist between both the types of charges and the rate of charges when a mobile customer is overseas, compared to domestic use. In particular, the charges relating to data usage are identified as the major source of IMR Bill Shock.

On 28 June 2013, the Australian Securities and Investments Commission (ASIC) released updated guidance on financial resource, corporate governance, and disclosure and dispute resolution requirements for investment platform operators. Platforms are typically used to facilitate the acquisition and holding of assets by enabling investors to bundle product features such as custody of assets, execution and consolidated reporting. Investor directed portfolio services (IDPSs) and IDPS-like schemes are types of platforms. ASIC has assessed that changes to the platforms sector since the introduction of the original guidance in 2000 has rendered aspects of this guidance no longer fit-for-purpose. Some of these industry changes have been in response to the Government’s Future of Financial Advice reforms.

On 5 June 2013, the Australian Securities and Investments Commission (ASIC) released an update to its Regulatory Guide 134, Managed Investments: Constitutions. ASIC is required to register managed investment schemes that meet relevant requirements under the Corporations Act. This includes the requirement for the scheme to have a constitution that sets out some (or all) of the rights, duties and liabilities of the responsible entity in its operation of the scheme. Regulatory Guide 134 provides guidance on how ASIC assesses whether a scheme’s constitution meets these legislative requirements. Regulatory Guide 134 was last updated in 2000, and since then the managed investment industry has changed significantly.

On 19 June 2013, the Minister for Resources and Energy announced that the Government had finalised the details on how to extend the Energy Efficiency Opportunities (EEO) program to major new developments and expansion projects. The EEO program requires large energy users to undertake energy savings audits. While it is not mandatory for the large energy users to accept the recommendations from an energy savings audit it is publicly reported. The changes will require large construction projects to undertake an energy savings audit at the design stage of the project. Single projects with an annual energy use of over 0.5 petajoules will be captured. This equates to projects with approximately $10-$20 million per annum in energy expenses.

On 19 June 2013, the Minister for Resources and Energy announced that the Government would not proceed with extending the Energy Efficiency Opportunities (EEO) program to energy networks. The EEO program requires large energy users to undertake energy savings audits. While it is not mandatory for the large energy users to accept the recommendations from an energy savings audit it is publicly reported. Trials undertaken indicated that the costs of extending the EEO Program to energy networks significantly exceeded the benefits. The decision not to proceed with extending the EEO program to energy networks was informed by a Regulation Impact Statement that was prepared by the Department of Resources, Energy and Tourism and assessed as adequate by the Office of Best Practice Regulation.

On 26 June 2013, the Australian Prudential Regulation Authority (APRA) released the new Prudential Standard APS 330 Public Disclosure. The prudential standard, which is legally binding, requires locally incorporated authorised deposit-taking institutions to publicly disclose information on their risk profile, risk management, capital adequacy, capital instruments and remuneration practices. Following the global financial crisis, concerns were raised regarding the transparency of regulatory capital (ie the capital an authorised deposit-taking institution is required to hold) and market discipline. Specifically, the following factors were identified as contributing to market uncertainty during the crisis and exacerbating a loss of market confidence in authorised deposit-taking institutions operating overseas:

On 14 June 2013, the Legislative and Governance Forum on Food Regulation (‘the Forum’) announced the implementation of a front-of-pack labelling system for Australia. The decision involved a number of proposals in relation to front-of-pack labelling, including the introduction of a ‘Health Star Rating’ system to be applied to foods as well as requiring nutrient information icons on foods. The implementation option chosen was a voluntary system. If, following evaluation after two years, a voluntary implementation is found to be unsuccessful a mandatory approach will be introduced. The Council of Australian Governments’ (COAG) best practice regulation requirements apply to decisions by ministerial councils or other bodies where there is a reasonable expectation of widespread compliance.

On 17 June 2013, the Department of Health and Ageing made regulations to adopt the Sunscreen Standard 2604:2012 for cosmetic sunscreen products. The change will be introduced with a five-year transition period, during which cosmetic sunscreen products can conform to either the previous 1998 Sunscreen Standard or the revised 2012 Sunscreen Standard, and after which products must conform to 2012 Sunscreen Standard. The new Sunscreen Standard allows cosmetic sunscreen products to be labelled with a Sun Protection Factor (SPF) rating of up to SPF 50+ compared with the previous limit of SPF 30+. The new Sunscreen Standard also sets more stringent requirements for broad spectrum performance and makes these mandatory for skin care products.