Policy impact analysis
The Office of Best Practice Regulation (OBPR), located in the Department of the Prime Minister and Cabinet, administers the Government’s policy impact analysis framework, which ensures decision-makers are provided with the best possible analysis and evidence to inform their decisions.
In addition to assessing impact analysis developed by agencies and departments, we support policy teams to map out policy problems, provide training on evidence-based policy-making and review impact analysis as it is being shaped. Our role sits across not only the APS, but also all Commonwealth-State decision-making processes, such as Ministers’ Meetings and National Standard Setting Bodies.
Only those proposals with significant social and economic impacts trigger the need for detailed policy impact analysis (around 5 per cent of all new policy proposals coming forward).
Seven key questions are asked that explore:
- the problem that the proposal is seeking to solve
- the justification for government intervention
- a range of viable options (at least 3, including the status quo and a non-regulatory option)
- the costs and benefits of those options (and how those costs and benefits are distributed)
- the consultation that has occurred and the feedback received
- the best option from those that were considered
- how the proposal will be implemented and evaluated.
The 7 questions capture the core aspects of public policy which are needed to inform robust government decision-making and more broadly reflect good policy development.
Regulators play a key role in the policy development cycle
Many of the proposals considered by the OBPR involve a regulatory or deregulatory change. This is because regulation can often be an effective means of dealing with problems such as market failure, unacceptable hazard or risk, or information asymmetry. It is also because regulation is broadly defined under the impact analysis framework as 'any rule endorsed by government where there is an expectation of compliance'. Such rules can take many forms, not all of them the ‘black-letter’ kind.
While regulators may not be the key drivers of the policy design process, they play an important role. This may include providing information to better inform the policy problem, helping to identify policy changes that will be more effective on the ground, comparing the potential impacts of those alternatives and identifying data metrics that will help evaluate the measures once up and running.
There is a crucial link between policy design and policy implementation. Regulators ideally would have at least a basic understanding of how their role fits in the policy development cycle as the way that a policy is implemented is critical to whether or not policy objectives are achieved. The same can be said for policy drafters having a better understanding of how programs work on the ground.
Should you have any questions at all about the policy impact analysis framework, please feel free to contact us. The best point of initial contact is by email to helpdesk-OBPR@pmc.gov.au or by phone on 02 6271 6270.
We also have an extensive range of online resources. Please see below for some helpful links.