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Productivity Commission to benchmark Australia's major project development assessment processes



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Senator Penny Wong Minister for Finance and Deregulation

David Bradbury MP Assistant Treasurer

Minister Assisting for Deregulation

Joint Media Release

Productivity Commission To Benchmark Australia’s Major Project Development Assessment Processes

The Productivity Commission will be asked to look at ways of cutting red tape to allow major resources and infrastructure projects to get off the ground more quickly.

“Major projects in Australia are subject to a wide range of government regulations and development controls applied at all levels of government,” said Mr Bradbury.

“We want to ensure there are no unnecessary delays or impediments to bringing projects on line that will create new jobs and boost Australia’s productivity.”

The study will be an opportunity to consider the impact of development assessment processes across all levels of government on the costs incurred by business.

“The outcomes from this study will help deliver good regulatory outcomes for the public with appropriate transparency, timeliness and certainty,” Senator Wong said.

The Productivity Commission study will build on the work that the State and Territories are progressing separately to improve major project processes, including implementing a range of reforms to development assessment processes for low risk, low impact developments.

The Productivity Commission will hold public hearings and release a draft report for public comment, before delivering a final report to the Government in 12 months.

The Terms of Reference for the study are attached. For more information, visit the Productivity Commission's website www.pc.gov.au.

7 December 2012

ATTACHMENT: Terms of Reference

I, David Bradbury, Assistant Treasurer and Minister Assisting for Deregulation, pursuant to Parts 2 and 4 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake a study to benchmark Australia’s major project development assessment processes against international best practice.

Background

Major projects in Australia are subject to a wide range of government regulations and development controls applied at the local, state and/or Commonwealth level. These controls are intended to serve the public interest by delivering desirable regulatory outcomes in a variety of ways including protecting the public from health and safety risks and managing environmental, social and other development-related impacts that may arise from a project. While the regulations and controls are intended to deliver specific benefits and avoid undesirable impacts, they add a layer of cost to doing business and may be particularly burdensome if they involve unnecessary duplication, or are poorly designed. To the extent that they lead to longer than expected construction times, such processes may impact on the commercial viability of some projects.

The mining boom in Australia has led to a large increase in the number of major projects seeking approval, which has highlighted the need for efficient and streamlined approvals processes. The Business Council of Australia has argued that ‘one of the key factors impacting on successful investment in Australia is the efficiency of government development approvals processes, and the related impact of red tape imposed by permits and regulation’. This was discussed at the Business Advisory Forum (BAF) and it was agreed to further test the premise about the efficiency of the development approvals processes across a broad range of development categories (for example, in industries such as construction and resources) and across a range of locations (including urban and regional areas).

In response to a request from the Council of Australian Governments, Heads of Treasuries have considered the scope of the BAF’s proposal to benchmark Australia’s major project development assessment processes finding that it would be beneficial to undertake further work to measure Australia’s performance relative to international best practice. In conducting further work, there is merit in assessing the effectiveness of approaches to streamline and coordinate development approvals processes which have been adopted by governments, such as a one-stop shop or

Lead Agency Framework, as a means for coordinating interaction with the proponent.

Given the broader concerns in the community around the delivery of planned projects, this provides an appropriate time to consider the extent to which development assessment processes across all levels of government affect the costs incurred by business, deliver good regulatory outcomes for the public and provide appropriate transparency and certainty to facilitate business investment.

Scope of the research study

In undertaking the study, the Commission should:

1. examine the regulatory objectives and key features of Australia’s major project development assessment processes at all levels of government, including the interactions between levels of government, the role of facilitation, the capacities and resources of the institutions involved and significant variations between jurisdictions;

2. examine the regulatory objectives and key features of comparable international systems with respect to major project development assessment processes;

3. identify critical elements of development assessment processes and compare these to assess the extent to which different decision-making approaches in Australian jurisdictions and alternative investment destinations overseas (including other federations) have a material impact on costs, timeliness, transparency, certainty and regulatory outcomes;

4. examine the strategic planning context for major project approvals in Australia and in comparable international systems (including for example, the pursuit of urban and regional development policies, or broader strategic resource development plans);

5. identify best practice and against this benchmark evaluate jurisdictional approaches, such as one-stop shops and statutory timeframes, to make recommendations to improve Australia’s processes, both within and between jurisdictions, by reducing duplication, removing unnecessary complexity and regulation, and eliminating unnecessary costs or unnecessarily lengthy timeframes for approvals processes;

6. assess mechanisms for ‘scaling’ regulatory requirements relative to project size and the expected benefits against the potential environmental, social, economic and other impacts; and

7. compare the efficiency and effectiveness with which Australian approvals processes achieve the protection of social, economic, heritage, cultural and environmental assets compared with comparable international systems.

In undertaking this study, the Commission should take into account the work being led by the Commonwealth Department of the Prime Minister and Cabinet to agree bilateral arrangements for accreditation of state/territory environment assessments and approvals processes. The Commission should not seek to duplicate this existing work, which COAG has agreed be finalised by March 2013.

In conducting the study, the Commission will also take into account evidence from benchmarking studies and other relevant studies, including the Infrastructure Australia ‘Principles for Assessment’, the COAG Reform Council’s review of capital city strategic planning systems and work on development assessment processes by individual jurisdictions, such as the NSW Planning System Review.

In conducting the study, the Commission should also examine relevant domestic case studies to inform its findings.

The Commission should consult with industry, non-government stakeholders and governments in conducting the study.

The Commission will publicly release a draft report and seek submissions prior to finalising the Report. The final Report should be provided within 12 months of the receipt of these Terms of Reference.

DAVID BRADBURY Assistant Treasurer