Regulation commencement dates

 

“The regulation takes effect on 1 January.”

 

“So, who will be at work to implement this? Or to enforce it?”

and

“What work is needed during December to gear up for implementation?”

 

 

1 January can be a very impractical date for legal requirements to take effect. In Australia, we’re all sleeping-in after New Year’s Eve parties, or at the beach on holiday.

It may sound like nice neat timing, but a 1 January start date means preparatory work has to be done in the December quarter, including what should be people’s Christmas/New Year break.

I’m aware of staff having to put their break on hold while they prepare for a 1 January commencement.

It might seem trivial on face value, but government policy writers working on legislation or regulations need to avoid impractical dates of effect.

How do policy makers decide when new laws and regulations start?

The Office of Best Practice Review (OBPR) does not appear to provide guidelines on this, despite having emphasis on minimising regulatory burden.

A while ago I asked the Office of Parliamentary Counsel. First Parliamentary Counsel, Peter Quiggin PSM, provided some advice:

There are many considerations that would be taken into account and the relative importance of different considerations would vary depending on the particular legislation.

Often the Government will have announced a start date. For matters that relate to financial years, this will often be 1 July. There is also a tendency to start things on 1 January.

For many other policies it will be based on the date by which the Government thinks that it can get the legislation through Parliament and then get necessary systems in place.

One issue is whether it is best for all changes to happen at the same time or whether it is better for them to be staggered. Having them aligned draws comments that this means that there is too much change at once. Having them staggered brings comments that there is constant change and it would be easier if it was all of the changes happened in one go.

An example that is related to this is the date selected for the FBT [Fringe Benefits Tax] year. When the system was brought in, I believe that the 1 April year was selected to try to spread some of the workload for businesses, accountants and other advisers across the year. Therefore, rather than go with 1 July (the usual financial year), a different date was selected.

There have been many calls over the years for the FBT year to be aligned with the financial year. However, when this has been looked at there has been equally strong opposition to a change.

There is often no perfect solution and policy makers must try to select the best option.

Product safety policy

Many consumer product suppliers experience their highest turnover in the December quarter. At that time of year product safety staff and small business managers are at their busiest.

For product safety regulations, the ACCC consults the regulated community on length of lead times. It should also consider consulting on dates of effect. While of course busy times vary across the market, the December quarter is invariably busy.  So too is the time in January/February in the lead up to the Chinese new year when Asian factories and businesses have their own holiday disruptions.

Implementing new policy over the Christmas/New Year break imposes undue additional burdens on businesses, and on product safety practitioners in particular.

Regulatory agencies themselves are often busy managing product safety compliance at this time and may not easily be able to address implementation issues.

This issue is one I included in my recently published white paper: Consumer product safety in Australia: Challenges for practitioners and business managers.

Guidance for agencies

Many legislative instruments are signed off by ministers, so are not constrained by Parliament’s timeframes.

Peter Quiggan said individual departments may have materials that provide guidance to their staff who are involved in developing policy. It would be interesting to find out about any such materials.

It would be helpful for OBPR to include commencement date criteria in its policy guidance materials. This could encourage or even require government agencies to consult with stakeholders on the most suitable commencement dates.

Business and industry associations could also help their members by advocating suitable commencement dates in their consultation submissions.

For mandatory product safety standards, 1 April or 1 September may be a good option.