The Government has issued a ‘statement of expectations’ to many of the regulatory bodies, including the ATO, ASIC and APRA. These statements outline “the Government’s expectations about the role and responsibilities” of the regulatory bodies.
While acknowledging that the regulatory bodies need to act “independently and objectively”, the Government expects that they will “take into account the Government’s broad policy framework, including its deregulation agenda”.
This includes the expectation the bodies will “look for opportunities to reduce compliance costs for business and the community” to contribute to the Government’s $1 billion “red and green tape reduction target”. They are also expected to make a “major contribution to the deregulation agenda and help to boost productivity”.
In the statements the Government says it has a preference for “principles-based regulation that identifies the desired outcomes, rather than prescribing how to achieve them”, and so regulatory bodies should use a “risk-based approach to compliance obligations, engagement and enforcement,”.
The Government also wants the regulatory bodies to “avoid the duplication of the supervisory activities of other regulators” and to consider if goals can be achieved using the powers of another regulator.
Where the ATO, ASIC or APRA “has powers to make orders or rules, modify the law or make exemptions, and the exercise of that power would have significant implications for the market or regulated population” the Government expects a consultation process which will include stakeholders and the government.
ATOs Statement of Intent
In response to the Government’s Statement of Expectations the ATO has published a Statement of Intent. The ATO says that its “strategic intent is aligned with the Government’s commitment to good corporate governance and reducing red tape for business and the community”.
The ATO is “committed to improving Australia’s productivity by reducing red tape and compliance costs for business and the community”, including through “simplified interactions, more automation and reduced compliance costs”. These measures include a “light touch or no touch income tax experience” for individuals and a “tailored reporting regime” for businesses. The ATO plans to use electronic records and software to make it easier to business to comply with their tax and super obligations.
The ATO will continue to provide advice “based on our practical experience as administrators of the tax and superannuation systems”, including where laws to do achieve the intent of policy.
In terms of transparency and accountability the ATO says that its intention is to “be more open – open to hearing different views, open to change, and open to working with others to devise solutions to problems and make the most of opportunities”.
ASICs Statement of Intent
ASICs Statement of Intent says they are “aware of the burden unnecessary red tape can impose on business and the potential impact of this on productivity” and are working to reduce this burden, including by streamlining process, use of “relief powers” and changes to legislation.
ASIC also “supports the Government’s preference for outcomes-focused regulation”. However ASIC would “welcome broad strategic direction from Government on regulatory outcomes”, and would work to meet these outcomes “using the resources available to us”. ASIC also “looks forward” to the development of performance indicators to measure the performance of its statutory role.
ASIC also says it supports the preference for “principles-based regulation”, though notes that this can:
“lead to demand from some industry bodies or participants for more certainty through guidance from the regulator on what is required to comply with the law.”
APRAs Statement of Intent
APRA points out, in its Statement of Intent, that it does not “pursue a zero failure objective”. Instead there is a balance between a “low incidence of failure” in regulated institutions while not “impeding continued improvement in efficiency or hindering competition”. Agreeing with the Government’s view from the Statement of Expectations that all risks cannot be eliminated, APRA said that:
“APRA cannot eliminate the risk that any institution might fail and it recognises that attempting to do so would impose an unnecessary burden on institutions and the financial system.”
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