Many government roles involve, either partially or fully, regulatory functions. There are several documents that can help applicants for regulatory roles refine their applications to reflect the complexities of the regulatory cycle.
This material is also relevant to people in policy roles, as every policy proposal designed to introduce or abolish regulation must now be accompanied by an Australian Government Regulation Impact Statement, or RIS.
Job Family Model: Compliance and Regulation
One of the families in the APSC’s Job Family Model is Compliance and Regulation. These are roles that “examine, assess, inspect and investigate compliance with applicable legislation and organisational frameworks.”
There are five functions in this family:
Each of these functions is defined with examples of Job Roles. For example, the Inspection function refers to: INSPECTORS AND REGULATORY OFFICERS administer and enforce government and corporate regulations and standards. Job Roles include:
- Border enforcement operations
- Cargo examination
- Debt recovery enforcement
Resources that can help with applying for regulatory roles are:
The Institute of Public Administration Australia’s (IPAA) Regulatory Professional Capability Guidance
The Australian Government Guide to Regulation on the Cutting Red Tape website
The Regulatory Performance Framework also on the Cutting Red Tape website
You can also find relevant resources amongst the publications of the Productivity Commission and ANAO.
What is regulation?
The above-mentioned documents provide definitions of regulation. The IPAA’s document provides this definition:
‘Regulation is a key tool for achieving the social, economic, and environmental policy objectives of government. Public sector regulation applies a set of instruments, tools and approaches to influence or compel individuals and organisations to behave in a specific way in order to deliver public value, reduce harm or make society more productive. Regulation often addresses circumstances where markets fail to produce efficient or equitable outcomes for the community.’
‘Regulatory instruments include legislation, regulation, quasi-regulation, and co-regulation such as industry standards and codes of practice, industry/government agreements, accreditation schemes and international treaties to which Australia is a signatory.’
The CuttingRedTape website says regulation may be defined as: “Any rule endorsed by government where there is an expectation of compliance”.
‘Rules can take many forms, not all of them the ‘black-letter’ kind. Governments and public servants make rules every day and as a consequence impose sometimes unwelcome burdens on businesses, community organisations and individuals.’
Activities of a Regulator are:
- licensing and/or approvals processes, including
- registration/accreditation, that control entry to or participation in a market;
- monitoring and compliance activities, including imposing and collecting fees;
- enforcement actions for non-compliance and complaints resolution; and
- providing advice and guidance regarding compliance with regulation, including education around compliance.
Benefits and burdens of regulation
Applicants need to understand their role in imposing costs when using regulation to change behaviour. As the IPAA’s Guidance points out:
‘Regulation always has impacts and costs beyond the behavioural change required by the specific instruments selected. Regulation should be imposed only when it can be shown to offer a net benefit. The compliance burden on individuals and organisations needs to be weighed against the benefits of the regulation and the compliance burden must be the minimum necessary to deliver the objective of the regulation.’
Risk management and communication are key skills for regulatory roles.
‘Regulation should be underpinned by risk management including risk analysis and communication of risk assessments and mitigations, which influences the processes used at all stages. A key challenge in regulation is in ensuring that all parts of the regulatory process are adding value to achievement of the policy goals, while not creating unintended impacts or imposing excessive costs on the community or markets.
Regulation is often a cooperative effort between the regulator, the regulated, beneficiaries of regulation and the broader community. Increasingly, regulation is being considered as a resource that, like funds, needs to be carefully managed to achieve its objectives.’ [IPAA Guidance]
The Regulatory cycle
The IPAA document offers an outline of the regulatory cycle. This information can help applicants identify how their role contributes to an organisation and to government policy. The three stages in the cycle are Make, Operate, and Review.
- ‘Make: Translating government policy into legislation or other regulatory instruments.
- Operate: Day-to-day administration of legislation or other regulatory instruments to achieve the regulator’s public policy objectives.
- Review : Assessing whether regulatory instruments or processes are continuing to meet their specified objectives.’
Applicants can use this model to inform examples used in applications and interviews.
This Professional Capability Guidance sets out the capability (knowledge and skill) requirements for the regulatory professional role (or cluster of roles) which primarily have a strategic focus on regulatory planning and design, implementation planning and management oversight, and review and reform.
Of considerable value to applicants is the detail provided on the context of contemporary regulatory practice. The Capability Guidance document lists an extensive number of contextual issues that a regulatory professional needs to monitor and consider, including:
- ‘the potential overlap of local, state, territory and commonwealth governments in regulating the same activity, individual or organisations.
- compatibility with competition, trade, and investment facilitation principles and policies at a domestic, supranational and international level .
- government and the regulated community expect the cost of regulation, including the cumulative burden on regulated entities, to be taken into account in its design and its delivery, and are increasingly intolerant of regulatory burdens which are unnecessary or disproportionate to the policy problem or risks which the regulation seeks to address.
- the complementary role that stakeholders and other relevant parties (such as representative bodies of regulated entities and of beneficiaries of regulation) can play in helping to achieve the desired regulatory objectives, and how the regulator is best placed to influence positive action by them.
- the degree of sophistication of the individuals or organisations that are regulated and their capacity to understand and comply with the regulatory regime.
- changing conditions in the relevant market, and trends within broader society such as demographic and environment changes – which may impact on whether the original policy intent is relevant and/ or the regulatory regime.
- the degree of sophistication of the individuals or organisations that are regulated and their capacity to understand and comply with the regulatory regime-changing conditions in the relevant market, and trends within broader society such as demographic and environment changes – which may impact on whether the original policy intent is relevant and/ or the regulatory regime.’
When giving examples applicants can consider which contextual issues are relevant.
Five domains in the capability standards
The capability outcome standards for regulatory professional roles have been allocated to five domains – reflecting the regulatory context, the three phases of the regulatory process, together with professional development. Applicants can use this material to self-assess as well as to inform applications.
1. Regulatory Context : Understanding the role of regulation in the implementation of policy within society. A broad understanding of how regulation achieves its goals, the basis for a regulator’s authority, the tools that can be used within regulation, and the intended and unintended impacts of regulation.
- Regulatory approaches and impact analyses
- Achieving behavioural change by regulation
- Risk assessment and management
2. Regulatory Planning and Design: Apply a risk based and consultative approach to the design of a regulatory regime and the deployment of resources to achieve the strategic intent of government.
- Identify the problem and options for an appropriate response
- Regulatory design – application of regulatory theory to achieve a particular policy outcome
- Stakeholder engagement and relationship management
- Design strategies to support compliance and address non-compliance
3. Regulatory Implementation : Implement regulatory programs to deliver the intended outcome to the appropriate standard and enable sustainable ongoing delivery.
- Process and operational policy design
- Managing Probity
- Making evidence based regulatory decisions
- Regulatory Information, intelligence and data management,
- Resource planning.
- Stakeholder management and education
- Complaints management
- Monitor compliance
- Responding to non- compliance
- Significant breaches and adverse event
4. Regulatory review and reform Monitor and review regulation to ensure it is efficient, effective, continues to meet its objectives, is responsive to the changing market and environment and does not impose unnecessary costs on regulated entities.
- Monitor and assess regulatory performance
- Adjust and improve ongoing regulatory performance
- Regulatory reform and review
5. Professional Development and Contribution to the Professional Body of Knowledge
Regulatory performance framework
The Productivity Commission (PC) published a report in March 2014, describing a possible framework by which the performance of regulators could be audited. The Regulator Performance Framework (the Framework) is largely based on the PC’s report; however, a more streamlined approach to indicators has been used in the Framework. The Framework is meant to help regulators play their part in managing risks, undertaking their functions with the minimum impact necessary and protecting the interests of the community.
To achieve the Government’s objectives, the Framework comprises KPIs, measures of performance and a process of self-assessment and external review. The outcomes-based key performance indicators (KPIs) are:
- regulators do not unnecessarily impede the efficient operation of regulated entities;
- communication with regulated entities is clear, targeted and effective;
- actions undertaken by regulators are proportionate to the risk being managed;
- compliance and monitoring approaches are streamlined and coordinated;
- regulators are open and transparent in their dealings with regulated entities; and
- regulators actively contribute to the continuous improvement of regulatory frameworks.
To support the objectives of the Framework, Commonwealth regulators should ensure the risk management framework used to guide their operations is based on the nine elements of the Commonwealth Risk Management Policy and the better practice principles of the ANAO Better Practice Guide: Administering Regulation.
Guide to regulation
This Guide has been written to ‘help policy makers see regulation in a new light’.
The Guide provides ten principles for Australian government policy makers. These are:
- Regulation should not be the default option for policy makers: the policy option offering the greatest net benefit should always be the recommended option.
- Regulation should be imposed only when it can be shown to offer an overall net benefit.
- The cost burden of new regulation must be fully offset by reductions in existing regulatory burden.
- Every substantive regulatory policy change must be the subject of a Regulation Impact Statement.
- Policy makers should consult in a genuine and timely way with affected businesses, community organisations and individuals.
- Policy makers must consult with each other to avoid creating cumulative or overlapping regulatory burdens.
- The information upon which policy makers base their decisions must be published at the earliest opportunity.
- Regulators must implement regulation with common sense, empathy and respect.
- All regulation must be periodically reviewed to test its continuing relevance.
- Policy makers must work closely with their portfolio
- Deregulation Units throughout the policy making process.
Every policy proposal designed to introduce or abolish regulation must now be accompanied by an Australian Government Regulation Impact Statement, or RIS.
A RIS asks seven questions that help policy makers focus on the regulatory impact of major decisions:
- What is the problem you are trying to solve?
- Why is government action needed?
- What policy options are you considering?
- What is the likely net benefit of each option?
- Who will you consult about these options and how will you consult them?
- What is the best option from those you have considered?
- How will you implement and evaluate your chosen option?
Answers need to be carefully considered as, in most cases, the RIS is a public document.
A RIS process is mandatory for all Cabinet submissions and is needed in most cases if you are removing regulation. Every portfolio has a Deregulation Unit whose job is to help with preparing a RIS.
When applying for regulatory roles you may need to show your awareness or understanding of the regulatory cycle, managing risk, the principles for policy makers, and how to prepare a RIS.