Part 3: Effective Consultation

This section provides guidance on how to conduct effective consultation and tips for producing meaningful, clear discussion documents, for regulatory proposals.

1  The purpose and implications of consultation

The purpose of consultation is two-fold: to gain information to assist with policy development; and to inform stakeholders about what's happening. This section contains explains the key features of effective and efficient consultation, and provides general guidance for preparing discussion documents that meet the Regulatory Impact Analysis (RIA) requirements.

1.1  The value of consultation to good RIA

Undertaking consultation during the policy development process can result in better quality regulatory proposals that are more likely to achieve their objectives. Having a consultation process acknowledges that those who are going to be affected by regulation may have access to more and better information about the real world impacts of proposals than the government officials who are developing them. This information can be critical to developing regulatory proposals that maximise the benefits, minimise the costs and avoid unintended consequences. Consultation therefore provides an important safeguard against regulatory failure.

The practical benefits of consultation include:

• better information, contributing to better quality regulatory proposals
• increased scrutiny of officials' analysis and advice, allowing potential problems with a proposal to be identified early
• durability as better designed policies are less likely to need amendments once introduced
• increased public buy-in/acceptance as stakeholders are more likely to accept a proposal they have been involved in developing, and
• improved understanding and increased compliance (therefore improved regulatory effectiveness).

1.2  Costs and risks

While there are a number of benefits from consultation, there is also a risk that the consultation process will not achieve the desired outcomes. Policy makers need to consider who they are consulting and what they are consulting on to ensure that the process is effective and efficient.

Poorly designed consultation can be time consuming (both for stakeholders and officials) and fail to improve the policy design. Over-consulting stakeholders creates a risk of consultation fatigue where stakeholders are disinclined to be involved in future consultation processes. If the consultation process is poorly targeted or vague, the feedback received from stakeholders is unlikely to significantly improve policy.

1.3  Timing

The benefits from consultation arise throughout the policy process: from correctly identifying the nature and source of the problem and identifying feasible alternative options and the associated costs, benefits and risks; through to practical design and implementation issues.

When designing policy, it is important to ensure that the policy addresses the source of the problem rather than the symptoms and is correctly targeted, to avoid “over-regulation”. Stakeholders often have better access to empirical information on the size of problem as well as day-to-day experience with the nature of the real issues. In addition, stakeholders' practical experience can help identify potential unintended effects that policy makers have not considered. Stakeholders may also suggest more practical solutions to achieve the policy objectives.

As consultation can add value at all the various stages of analysis, it is important that for it to be considered and planned for at the very outset of the policy development process. Undertaking consultation late in the process limits the benefits that can be gained, as it can be too late to substantially alter the policy design.