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Guidelines for Setting Charges in the Public Sector -April 2017

5  Bringing it all together - Design of cost recovery regime

This section covers some of the key design considerations, and the way in which the analysis should be documented. Once the main policy parameters have been determined, consideration should be given to how the cost recovery might operate in reality, and ensuring that the implementation aligns with the policy intent.

An open book approach to designing cost recovery regimes is crucial. Consultation can provide useful insights into the needs of the users, which in turn can improve the design. Also, the design stage is an opportunity to set up the structures that will facilitate an open book approach in an ongoing way (for example, by defining performance metrics that can be reported against).

Example: Setting WorkSafe's major hazards fees and levies in an 'open book' way

WorkSafe New Zealand is a work health and safety regulator. In 2016 new regulations came into force, setting up a new major hazards facilities safety regime. In agreeing to the original policy decisions, Cabinet agreed that the costs of administering this regime should come from major hazard facility operators, rather than the safety levy that all businesses pay.

As the new regulations necessitated a new approach to work health and safety monitoring, the exact costs of the new regime were not known. The consultation demonstrated an open book approach by including:

  • Research on the costs of similar regimes in comparable jurisdictions.
  • A detailed set of fee proposals, including detailed breakdowns of the cost drivers of the proposed fees.

The consultation discussion document and materials can be found at:

See pages 19-23 and appendix 2 of the discussion document.

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