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Guide to Cabinet's Impact Analysis Requirements

9. Preparing a Regulatory Impact Assessment

The Regulatory Impact Assessment, whichever template is used, is a government agency document, as distinct from a Cabinet paper which is a Minister's document.

A Regulatory Impact Assessment presents the outcomes of your Impact Analysis process and provides a summary of your agency's best advice to your Minister and Cabinet on the problem definition, objectives, identification and analysis of the range of feasible options, and information on implementation arrangements. By contrast, the Cabinet paper presents the Minister's advice or recommendation to Cabinet.

The purpose of the Regulatory Impact Assessment is to:

  • provide the basis for consultation with stakeholders, and with other government agencies
  • provide the basis for engagement with Ministers and therefore help to inform the policy discussion and Ministers' decisions
  • inform Cabinet about the range of feasible options and the benefits, costs and risks of the preferred option(s)
  • enhance the transparency of, and accountability for, decision making, through public disclosure once decisions are taken.

The Regulatory Impact Assessment should provide an objective, balanced presentation of the analysis of impacts, with any conclusions reached by the agency explained and justified. It should be prepared before the Cabinet paper, so that it informs the development of the preferred option and hence the Ministerial recommendations in the Cabinet paper. It should provide a reference point from which the Cabinet paper is developed, thus avoiding the need for a lengthy Cabinet paper and repetition between the two documents.

In some cases it will be helpful to start work on drafting the Regulatory Impact Assessment early on in the Impact Analysis process, building up the drafting as you go along. In other cases it may be more suitable to put together the Regulatory Impact Assessment at a later stage when policy development is further advanced and proposals ready to be put to Ministers.

You may also find it useful to use the Regulatory Impact Assessment format as a vehicle for providing advice to the portfolio Minister during the course of policy development.

Efficient and effective consultation must also have taken place when carrying out Impact Analysis and the results of this set out in the Regulatory Impact Assessment. Further guidance on consultation can be found in the Guidance Note on Effective Consultation for Impact Analysis.

9.1.  Standard templates

Your Impact Analysis must be provided alongside the Cabinet paper, and in most cases the analysis will be presented using one of the standard templates. The Regulatory Impact Assessment templates are available on Treasury's Regulation webpage.

The standard templates are designed to tailor the form and content of the Impact Analysis to the significance and nature of the regulatory proposal. The key choice for agencies is whether to provide a limited summary of their Impact Analysis or a more comprehensive one. The four templates are the Impact Summary, the Full Impact Statement, and the stage 1 and 2 Cost Recovery Impact Statements.

The Impact Summary

The Impact Summary contains many of the elements of the previous Regulatory Impact Statement, but analyses the impacts of the preferred option only; that is, the option proposed in the Cabinet paper. This template encourages brevity and does not require extensive analysis of alternative options. It may be more appropriate where:

  • there was a good, sound, well consulted policy process
  • you have identified a clear preferred option, and
  • this option is recommended in the Cabinet paper.

The Full Impact Statement

The Full Impact Statement contains all the elements of the previous Regulatory Impact Statement. This includes analysis of all the feasible options. The template includes a coversheet which highlights the issues decision-makers need to readily access, and helps them to identify the aspects of the Full Impact Statement that they may wish to closely scrutinise. This template provides for a more comprehensive summary of your Impact Analysis. It should be used when there is no clear preferred option or the preferred option is different from the one recommended in the Cabinet paper.

The stage 1 Cost Recovery Impact Statement

The stage 1 Cost Recovery Impact Statement is designed specifically for proposals seeking policy agreement to recover costs, but not yet seeking policy agreement on cost recovery levels (ie, agreement on cost recovery levels will be sought at a later date).

The stage 2 Cost Recovery Impact Statement

The stage 2 Cost Recovery Impact Statement is designed specifically for proposals seeking agreement on cost recovery levels.

9.2.  Required content

The templates include guidance notes and advice on how to fill them out. This advisory text should be deleted in the final form of the Regulatory Impact Assessment.

Your Impact Analysis should be completed and summarised in a Regulatory Impact Assessment before the Cabinet paper is drafted. Further guidance on how to do Impact Analysis can be found in the Guidance Note on Best Practice Impact Analysis.

9.3.  Consultation and circulation

The Regulatory Impact Assessment summarises the Impact Analysis that you have already done, and therefore will reflect the results of your consultation to date. The completed templates themselves provide a vehicle for further consultation as appropriate with affected parties and with government agencies.

You will ideally circulate the draft Regulatory Impact Assessment for comment to relevant government agencies before the Cabinet paper is prepared.

You must circulate your Regulatory Impact Assessment to interested agencies with the draft Cabinet paper.

9.4.  Manager sign-off and agency disclosure

The Regulatory Impact Assessment must be signed off by a responsible manager. There is a space in the templates for their signature. You must also disclose information about any key gaps, assumptions, dependencies and significant constraints, caveats or uncertainties regarding the Impact Analysis. The templates also provide for you to disclose this information.

These requirements emphasise that the Regulatory Impact Assessment is an agency document, not a Ministerial one, and that its quality and the analysis in it is the responsibility of the policy team and the responsible manager.

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