Regulation Review - IPART - NSW Government

Independent Pricing and Regulatory Tribunal 

Regulation Review 

Local government compliance and enforcement 

Regulation Review — Issues Paper 

September 2012

Regulation Review 

Local government compliance and enforcement 

Regulation Review — Issues Paper 

September 2012

© Independent Pricing and Regulatory Tribunal of New South Wales 2012 

This work is copyright. The Copyright Act 1968 permits fair dealing for study, 

research, news reporting, criticism and review. Selected passages, tables or 

diagrams may be reproduced for such purposes provided acknowledgement of the 

source is included. 

ISBN 978-1-922127-26-6 

The Tribunal members for this review are: 

Dr Peter J Boxall AO, Chairman 

Mr James Cox PSM, Chief Executive Officer and Full Time Member 

Mr Simon Draper, Part Time Member 

Inquiries regarding this document should be directed to a staff member: 

Lil Cullen (02) 9290 8410 

Alexandra Lobb (02) 9113 7757 

Independent Pricing and Regulatory Tribunal of New South Wales 

PO Box Q290, QVB Post Office NSW 1230 

Level 8, 1 Market Street, Sydney NSW 2000 

T (02) 9290 8400 F (02) 9290 2061 

www.ipart.nsw.gov.au 

ii 

IPART Regulation Review

Invitation for submissions 

IPART invites written comment on this document and encourages all interested 

parties to provide submissions addressing the matters discussed. 

Submissions are due by 29 October 2012. 

We would prefer to receive them electronically via our online submission form 

 

You can also send comments by fax to (02) 9290 2061, or by mail to: 

Regulation Review – Local Government Compliance and Enforcement 

Independent Pricing and Regulatory Tribunal 

PO Box Q290 

QVB Post Office NSW 1230 

Our normal practice is to make submissions publicly available on our website 

. If you wish to view copies of submissions but do not 

have access to the website, you can make alternative arrangements by 

telephoning one of the staff members listed on the previous page. 

We may choose not to publish a submission—for example, if it contains 

confidential or commercially sensitive information. If your submission contains 

information that you do not wish to be publicly disclosed, please indicate this 

clearly at the time of making the submission. IPART will then make every effort to 

protect that information, but it could be disclosed under the Government Information 

(Public Access) Act 2009 (NSW) or the Independent Pricing and Regulatory Tribunal Act 

1992 (NSW), or where otherwise required by law. 

If you would like further information on making a submission, IPART’s 

submission policy is available on our website. 

Regulation Review IPART 

iii

Error! No text of specified style in 

document. 

Contents 

Invitation for submissions 

iii 

1 Introduction 1 

1.1 What has IPART been asked to do? 1 

1.2 How IPART will approach the task 3 

1.3 Other related reviews 4 

1.4 How and when you can provide input to this review? 7 

1.5 What does the rest of this paper cover? 9 

1.6 List of issues on which we seek comment 9 

2 Local government compliance and enforcement functions 13 

2.1 The number and diversity of councils in NSW 13 

2.2 What are local government compliance and enforcement functions? 14 

2.3 The relationship between State and local government 20 

2.4 The regulatory capacity and capability of local government 24 

2.5 The relationships between councils 27 

3 Identifying reform opportunities 31 

3.1 The impacts of local government regulatory activities 31 

3.2 Sources of unnecessary regulatory burden 32 

3.3 Best practice regulatory enforcement 34 

3.4 Possible reforms to regulatory practices – leading practices 35 

4 Estimating the impacts of recommended reforms 49 

4.1 Ensuring our recommendations produce net benefits to NSW 49 

4.2 Estimating reduced regulatory costs from our recommended reforms 50 

4.3 Estimating the budget implications for government 58 

Appendices 

A Terms of Reference 59 

v 

IPART Regulation Review

1 Introduction 


Regulation is one of the key tools government uses to achieve its economic, social 

and environmental objectives. However, it must be well designed, targeted and 

efficiently administered, so that it achieves its objectives at least cost to society. If 

regulation is inefficiently or ineffectively designed or administered, it imposes 

unnecessary costs on business and the community. 

In recognition of the benefits of reduced regulatory burden, the NSW 

Government has a target of $750 million in reduced ‘red tape’ costs for business 

and the community by June 2015. 1 

To help achieve this target, the NSW Government has engaged IPART to 

undertake a series of red tape reviews. In undertaking these reviews, IPART is to 

examine key areas of regulation, or sectors subject to regulation, and make 

recommendations for reforms that could provide savings to business and the 

community. 

This review is focused on local government compliance and enforcement 

activity in NSW. 

1.1 What has IPART been asked to do? 

The full Terms of Reference (ToR) for this review is provided at Appendix A. 

Under this ToR, IPART is to examine local government compliance and 

enforcement activity (including regulatory powers conferred or delegated under 

NSW legislation) and provide recommendations that will reduce regulatory 

burdens for business and the community. 

We are to consider: 

 

 

ways to improve governance of local government compliance and 

enforcement activities – including local government roles relative to, and 

interactions or coordination with, the NSW Government 

ways to improve the capacity and capability of local government to undertake 

their regulatory responsibilities 

1 Premier’s Memorandum, M2012-02 Red tape reduction - new requirements, February 2012. 

Regulation Review IPART 1


 

 

 

 

 

 

ways of improving the quality of regulatory administration by local 

government – including consistency of approach, economies of scale and 

mutual recognition across local government areas 

the ‘culture’ of regulatory services – including the extent to which local 

government considers and understands best practice regulatory principles 

and approaches (including consideration of the economic impacts of their 

regulatory actions) 

issues relevant to priority regulatory areas such as building and construction, 

parking and road transport, public health and safety, environmental 

regulation, planning and companion animal management 

best practice approaches to local government compliance and enforcement 

activity in NSW and other jurisdictions 

the merits of NSW adopting leading practices identified by the Productivity 

Commission (the PC) in its 2012 report Performance Benchmarking of Australian 

Business Regulation: The Role of Local Government as Regulator 

ways to ensure regular assessment of regulatory performance 

changes to local government regulatory services to maximise the 

opportunities arising from the current review of the NSW planning system. 

We are also required to: 

 

 

 

 

 

 

 

identify the nature and extent of key regulatory functions undertaken by local 

government 

identify differences in approach across local government areas 

identify areas of local government compliance and enforcement with the 

greatest regulatory impact on business and the community 

ensure that our work complements the review of the Local Government Act 

1993 

provide recommendations that would produce net benefits for NSW 

provide estimates of the reduction in regulatory burden for NSW business 

(especially small business) and the community from our recommended 

reforms 

provide estimates of the budget implications for the NSW Government from 

our recommended reforms. 

2 IPART Regulation Review


1.2 How IPART will approach the task 

Regulation can impose unnecessary costs on business, the community and/or 

regulators if it is not efficiently implemented and enforced. In NSW, a significant 

amount of regulation is implemented and enforced by councils. Therefore, there 

is merit in finding ways to reduce unnecessary costs on business and the 

community that arise from how councils go about this task. 

The focus of this review is on how local government in NSW implements and 

enforces regulations. We will, however, consider the design or provisions of 

regulations to the extent that they impede efficient and effective implementation 

and enforcement practices. 

In undertaking this review, we will seek to: 

 

 

identify those local government compliance and enforcement practices that 

are imposing unnecessary regulatory burdens on business and the 

community, and make recommendations to improve these practices to reduce 

or eliminate burdens 

identify best practice principles and practices in relation to implementation 

and enforcement of regulation, and make recommendations to enable local 

councils to apply these principles and practices 

identify impediments to efficient and effective local government 

implementation and enforcement of regulation, and make recommendations 

to remove these impediments. 

We will also consider: 

 

 

 

 

 

 

the role of local government relative to the State Government in implementing 

and enforcing key areas of regulation – including the extent to which there is 

effective coordination, cooperation and clear lines of accountability between 

both levels of government 

the extent to which councils have discretion in implementing and enforcing 

State Government regulation 

differences in implementation and enforcement practices between councils in 

NSW (ie, different approaches, discretionary requirements, cultures) and the 

extent to which these differences impose unnecessary costs or are justified 

the extent of cooperation and coordination between councils, and whether this 

lessens or removes unnecessary costs of regulation for councils, business and 

the community 

how the regulatory performance of councils and the achievement of 

regulatory outcomes is currently assessed and how this can be improved 

the impacts on business, the community, councils and State Government of 

potential reform options and, most importantly, the overall benefits and costs 

to the community as a whole of potential reform options. 



In undertaking the review, we will be seeking to find specific, practical solutions 

to address identified problems. In doing so, we will be heavily reliant on input 

from individuals, businesses, councils and the community in general. 

1.3 Other related reviews 

There are a number of other related reviews currently taking place or expected to 

commence in the near future. These include reviews of: 

 

 

 

 

 

 

the Independent Local Government Review Panel 

the Local Government Acts Taskforce 

the NSW Planning System Review 

infrastructure contributions 

building regulation 

the Companion Animals Taskforce. 

These reviews are briefly discussed below. The focus of our review is on how 

local government in NSW administers and enforces regulations, rather than on 

the regulations themselves (ie, the policy rationale for the regulation). In general, 

this is a key point of distinction between our review and the legislative based 

reviews of the planning system and Local Government Acts. We also highlight 

other points of difference below. 

We will conduct our review in close consultation with these other reviews to 

ensure our efforts are coordinated and not duplicative. 

The Independent Local Government Review Panel 

The Independent Local Government Review Panel (the Panel) has been 

appointed to drive a number of key strategic directions identified in the 

Destination 2036 – Action Plan. 2 Destination 2036 is a joint initiative of NSW 

Government and councils to develop a blueprint for changes that need to occur 

in local government to deliver better outcomes for communities. 

2 Destination 2036 – Action Plan, June 2012 – available from 

http://www.dlg.nsw.gov.au/dlg/dlghome/documents/information/Destination%202036%20 

-%20Action%20Plan.pdf. 



The Panel will investigate and identify options for governance models, structural 

arrangements and boundary changes for local government in NSW. 3 It is due to 

report in July 2013. As part of its review, the Panel will examine best practice in 

local government in NSW and other jurisdictions, and other aspects that intersect 

with this review. The recommendations of the Panel may also address some of 

the current capacity and capability issues identified as part of this review in 

relation to how local government undertakes its regulatory responsibilities. 

The Local Government Acts Taskforce 

The Local Government Act 1993 (the LG Act) and the City of Sydney Act 1988 

establish the statutory basis for local government in NSW, including how it is 

constituted, administered, financially managed, financed, operated and made 

accountable. These Acts also set out core local government service and 

regulatory functions, and general enforcement powers. However, these Acts do 

not capture the full scope of regulatory functions and enforcement powers 

conferred or delegated on local government, as these are conferred or delegated 

under numerous other pieces of State legislation (as discussed in section 2.2 of 

this paper). 

The NSW Government has recently announced a review of the provisions of the 

LG Act and the City of Sydney Act and their practical operation. This review 

will be conducted by the Local Government Acts Taskforce. The Taskforce will: 

 

 

adopt the decisions of the Government in relation to the recommendations of 

the Independent Local Government Review Panel, and 

make recommendations for legislative changes necessary for a new LG Act. 

It is due to report by September 2013. 4 

Our review is distinct from the reviews of the Independent Local Government 

Review Panel and Local Government Acts Taskforce because our focus is on the 

compliance and enforcement functions of local government. 

3 The Terms of Reference for the Panel’s review can be found at 

http://www.localgovernmentreview.nsw.gov.au/ 

4 The Terms of Reference for the Taskforce’s review can be found at 

http://www.dlg.nsw.gov.au/dlg/dlghome/documents/Circulars/12-32.pdf 



NSW Planning System Review 

The NSW planning system review is a comprehensive review of the State’s 

planning system, with the aim of creating a new planning system to meet today’s 

needs and priorities. The NSW Government has recently released a Green Paper 

for comment, outlining its proposed reforms in this area. 5 This paper followed a 

review of the Environmental Planning and Assessment Act 1979 by Tim Moore and 

Ron Dyer. 6 A White Paper or draft legislation will be released later this year. 

The Green Paper contains many proposed reforms that would alter the role of 

local government in the planning system in relation to: 

 

 

 

how it interacts with State Government, participates in plan making and 

undertakes planning decisions 

what developments it is the consent authority for 

how it undertakes regulatory functions, such as imposing development 

consent conditions. 

As directed by our ToR, our recommended reforms will seek to enable local 

government to maximise the opportunities from the planning system review. 

The Green Paper also indicated that further work was being undertaken in 

2 related areas. These are discussed further below. 

Review of development contributions 

As part of the planning review, the NSW Government is considering a number of 

options for reform to make development contributions fairer, simpler, more 

transparent and more efficient. This is to address current problems with the 

development contributions framework, which are impacting housing supply and 

affordability. 7 

The NSW Government is also proposing to establish a taskforce with local 

government to review the administration of development contributions. 8 The 

White paper will detail the Government’s proposed reforms in this area. As a 

result of the work in this area, our review will not consider current local 

government capacity issues related to the cap on section 94 contributions. 

5 NSW Government, A New Planning System for NSW - Green Paper, July 2012, available from 

www.planningreview.nsw.gov.au 

6 NSW Government, The Way Ahead for Planning in NSW – Recommendations of the NSW Planning 

System Review, Vol 1 & 2, May 2012, available from www.planningreview.nsw.gov.au 

7 Ibid, pp 74-77. 

8 Ibid, p 78. 



Review of building regulation 

NSW stakeholders identified a number of issues in the building industry in their 

submissions to the planning system review, including: 

 

 

 

accountability of builders and other building practitioners 

quality of building outcomes 

cost and effectiveness of consumer protection measures 

consistency of regulation. 9 

The NSW Government announced its intention to undertake a review to identify 

improvements to building regulation, policy, systems and responsibilities in 

response to these stakeholder concerns. This review is to be independently 

overseen, with the Building Professionals Board providing input. 10 

Our focus in this area will be on local government compliance and enforcement 

of building and construction regulation. 

The Companion Animals Taskforce 

A Companion Animals Taskforce has been established to provide advice on key 

companion animal issues and, in particular, strategies to reduce the current rate 

of companion animal euthanasia. The Taskforce is also proposing measures to 

refine the current regulatory framework around the breeding, sale and 

management of cats and dogs to improve welfare outcomes. The Taskforce is 

due to report later this year. 11 Our focus in this area will be on reducing 

unnecessary regulatory burdens on business or the community in relation to 

local government compliance and enforcement functions. 

1.4 How and when you can provide input to this review? 

We are heavily reliant on the input of stakeholders to this review. We therefore 

invite all interested parties, including businesses, business groups, community 

groups, individuals, councils and NSW Government departments or agencies to 

make written submissions in response to this issues paper by 29 October, 2012. 

9 Ibid, p 64. 

10 Ibid. 

11 Information on the Taskforce can be found at 

http://www.dlg.nsw.gov.au/dlg/dlghome/dlg_generalindex.asp?sectionid=1&areaindex=CA 

TASK&documenttype=8&mi=9&ml=10 



In general terms, we seek information on: 

 

 

 

the specific local government compliance and enforcement activities that are 

imposing unnecessary costs on business and the community 

any impediments to local government applying efficient and effective 

compliance and enforcement practices 

ideas for reforms to reduce unnecessary costs on business and the community 

from local government compliance and enforcement activity. 

Specific questions on which we seek responses are listed at the end of this 

chapter, and repeated at relevant sections throughout this paper. Submissions 

may also comment on any other issues stakeholders consider relevant to the 

review. Information on how to make a submission can be found on page iii, at 

the front of this paper. 

In addition to submissions to this paper, we will meet and consult with key 

stakeholders. We will also hold a public roundtable discussion later this year, to 

provide a further opportunity for stakeholders to present their views. 

After we have considered all the information and views expressed in 

submissions and at the roundtable, we will release a draft report. Then we will 

invite stakeholders to make further submissions on that report. After we have 

considered those submissions, we will submit our final report to the NSW 

Government. 

As part of our review, we are developing a comprehensive register of local 

government regulatory functions to help inform our work. Subject to further 

consideration and an assessment of its costs and benefits, this register could also 

be used as an ongoing resource for State and local government. The register is 

discussed further in Chapter 2. It is expected to be available on our website by 

early October. 

Table 1.1 sets out our indicative timetable for this review. 

Table 1.1 

Indicative review timetable 

Task 

Timeframe 

Release Issues Paper 17 September 2012 

Release register of local government regulatory functions Early October 2012 

Stakeholder submissions due 29 October 2012 

Hold public roundtable discussion 4 December 2012 

Release Draft Report Late March 2013 

Receive submissions in response to Draft Report Mid May 2013 

Deliver Final Report to Government Late June 2013 

Note: These dates are indicative and may be subject to change. 



1.5 What does the rest of this paper cover? 

The rest of this paper provides some context and background for the review to 

help you address the questions we are asking. The paper is structured as follows: 

 

 

 

Chapter 2 discusses local government compliance and enforcement functions, 

as well as the number and diversity of councils in NSW, the relationship 

between State and local government in relation to the administration of 

regulation, the compliance and enforcement capacity and capability of local 

government and relationships between councils. 

Chapter 3 considers sources of unnecessary regulatory burden, best practice 

regulatory administration and enforcement principles and potential reforms to 

reduce red tape for business and the community. 

Chapter 4 explains how we intend to estimate the impact of our recommended 

reforms, including impacts on business, the community and government. 

1.6 List of issues on which we seek comment 

To assist us in identifying and understanding the key issues for this review, this 

paper seeks comment on a wide range of issues. In providing responses, please 

provide specific examples, case studies or other supporting information, where 

available. We provide background to these questions in relevant sections of this 

paper (on the page numbers listed below): 

Exemptions provided by local government 

1 Local Approvals Policies (LAPs) can be used to provide exemptions from 

requiring approvals under the Local Government Act 1993. Should LAPs be 

used to provide more exemptions to reduce red tape? 20 

Register of local government regulatory functions 

2 We are developing a register of local government regulatory functions 

(available from IPART’s website by early October). How useful is this 

register? Would there be any benefit in maintaining the register as an 

ongoing resource? 20 

Local government and State Government interactions 

3 Are there areas where compliance or enforcement roles of local government 

and State Government agencies overlap or are unclear? What are the 

impacts of this on business, the community, councils or the State 

Government? 24 



4 Can you provide examples of poor consultation or coordination between local 

government and State Government agencies in relation to compliance and 

enforcement activities? What impact does this have on business, the 

community, councils or the State Government? 24 

5 Can you provide examples of good consultation or coordination between local 


enforcement activities? 24 

6 Can you suggest ways that local government and State Government 

agencies can work together to reduce red tape? 24 

7 Does the Division of Local Government’s ‘Promoting Better Practice Program’ 

assist local government in undertaking its regulatory activities more 

efficiently? 24 

8 Are there other ways to enhance assistance to councils? 24 

Local government capacity and capability 

9 Do councils have the resources and skills to undertake regulatory activities 

effectively? 27 

10 Can you provide examples of how a lack of council resources or skills 

impacts on business or the community? 27 

11 How can councils improve their resources and skills? 27 

12 If you are operating a business across more than 1 council area, how do 

differences in council approaches impact on your business? 30 

13 How, and in what areas, could coordination between councils be improved to 

reduce unnecessary regulatory burdens on business and the community? 30 

14 In what areas could mutual recognition (eg, recognition of registration in 

multiple local government areas) be used to reduce regulatory burdens on 

business or the community? 30 

15 What other approaches could be used to improve the way councils apply 

regulations? 30 

Identifying unnecessary regulatory costs or burdens 

16 What specific local government compliance or enforcement activities are 

imposing unnecessary costs on business or the community? 33 



17 What are these costs (eg, form filling, reporting, compliance, delay, fees and 

charges)? 33 

Best practice regulatory enforcement 

18 Are the principles of best practice regulatory enforcement (as set out in this 

paper) a sound basis for assessing good compliance and enforcement 

practices and testing reform options? 35 

19 How do State Government and councils review or assess councils’ regulatory 

performance? How could this be improved? 35 

20 To what extent do councils follow best practice enforcement principles? 35 

21 What are examples of best practice enforcement approaches being used by 

NSW councils? Could these be applied more widely? 48 

22 What compliance and enforcement approaches used in other jurisdictions 

should be applied in NSW? 48 

Identifying reform opportunities 

23 Should any of the leading practices identified by the Productivity Commission 

in its 2012 Performance Benchmarking of Australian Business Regulation: 

The Role of Local Government as Regulator be implemented in NSW? 48 

24 What specific reforms to local government compliance and enforcement 

activities would reduce unnecessary regulatory burdens to business and the 

community? 48 

25 What impediments prevent councils from undertaking their compliance and 

enforcement activities more efficiently? How can these impediments be 

removed? 48 

Estimating impacts of recommended reforms 

26 Do you have information that will assist us in estimating costs of specific 

regulatory burdens arising from local government compliance and 

enforcement activities? 58 

27 Do you have information that will assist us in estimating cost savings from 

potential reforms to local government compliance and enforcement activities? 58 



Other issues 

28 Do you wish to comment on any other issues relevant to this review? 58 


2 Local government compliance and enforcement 

functions 


functions 

To review local government compliance and enforcement activity, we need to 

understand what this comprises. Consequently, this chapter discusses the 

compliance and enforcement functions of local government. It also considers: 

 

 

 

 

the number and diversity of councils in NSW 

the relationship between State and local government in relation to the 

administration of regulation 

the compliance and enforcement capacity and capability of local government 

relationships between councils, including the extent of coordination, 

cooperation and consistency in relation to regulatory activities and 

requirements. 

These factors can impact on local governments’ performance as a regulator, and 

the regulatory burden faced by business and the community. 

2.1 The number and diversity of councils in NSW 

There are currently 152 general purpose and 14 special purpose councils in NSW. 

A challenge for our review is that these councils differ significantly in the size 

and characteristics of the area they serve. As discussed later in this chapter, this 

can have implications for councils’ capacity to undertake their regulatory 

responsibilities. It can also impact on the nature and extent of their regulatory 

activities. 

Councils like Blacktown, Parramatta or Newcastle serve areas that are considered 

to be major cities in their own right. In contrast, some rural councils, like 

Balranald or Bourke Shire, serve areas that are largely agricultural. The socioeconomics 

of councils in NSW also varies greatly. Mosman has the highest 

median income ($106,000) and Guyra the lowest ($31,000). 12 Blacktown has 

nearly 300,000 residents, whereas Urana has just under 1,300 residents. Hunters 

Hill occupies the smallest area at 5.7km 2 , compared with the Central Darling 

12 The PC reports this to be the largest range in Australia. (Productivity Commission, Performance 

Benchmarking of Australian Business Regulation: The Role of Local Government as Regulator, July 

2012, Vol 2, p 536.) 



functions 

which occupies over 50,000km 2 . 13 Population density also varies greatly, with 

the Central Darling having just 0.04 people per km 2 and Waverley having nearly 

7,500 people per km 2 . 14 

Table 2.1 indicates the extent to which councils vary in relation to population, 

land area, population density and average income of residents. 

Table 2.1 Demographics across NSW councils (2010/11) 

Population 

(‘000) 

Land area 

(km 2 ) 

Population 

density 

(no/km 2 ) 

Average income 

of residents 

($’000) 

Lowest 1,269 5.7 0.04 30.91 

Highest 299,797 53,508.6 7,425.65 105.95 

Source: NSW Division of Local Government, Department of Premier and Cabinet, Snapshot of NSW Local 

Government – Comparative Information on NSW Local Government Councils 2009/10, September 2011, Table 

A2, pp 14-16. 

2.2 What are local government compliance and enforcement 

functions? 

Local government has a wide range of responsibilities and functions. These 

include non-regulatory roles such as delivering services (eg, waste services, 

childcare facilities), providing infrastructure (eg, roads, parks, sporting facilities, 

libraries), undertaking procurement (eg, of services and infrastructure) and 

engaging in advocacy (eg, promoting proposals of local interest). Local 

government also administers and enforces a wide range of regulatory 

requirements, which affect business and the community. These compliance and 

enforcement functions, or ‘regulatory functions’, are the focus of our review. 

13 NSW Division of Local Government, Department of Premier and Cabinet, Snapshot of NSW Local 

Government – Comparative Information on NSW Local Government Councils 2009/10, September 

2011, Table A2, pp 14-16. 

14 Ibid. 



functions 

We consider a local government regulatory function to be any function under an 

Act, regulation or other statutory instrument which empowers local government 

to create, impose, enforce or administer rules that control the actions of others. 15 

Local government regulatory functions include: 

 

 

 

 

 

 

rule-making functions – making regulatory instruments, such as plans or 

policies that guide regulatory decision-making 

approval functions – issuing of permits, approvals or registrations to enable 

an activity to lawfully take place, often subject to conditions 

notification functions – receiving notification of activities 

compliance functions – undertaking inspections, searches or investigations, 

requiring monitoring or reporting 

enforcement functions – comprising: 

– issuing of orders, directions or notices to control activities 

– impounding, seizures or evictions 

– penalty notices and other enforcement action for breaches (eg, court 

proceedings,) 

referral functions – providing recommendations or advice to State agencies for 

regulatory action. 

Table 2.2 below lists examples of each of these functions by ‘priority’ regulatory 

area. 

Our review will consider local government regulatory functions – ie, local 

government as a regulator. It will not consider regulatory requirements imposed 

on local government (eg, a requirement for local government to be audited by a 

State Government agency or comply with a particular standard). 

2.2.1 The range of local government regulatory functions 

Local government undertakes a wide range of regulatory activities that affect 

business and the community. This includes activities in relation to regulatory 

functions established under the Local Government Act 1993 (the LG Act), other 

State legislation and even quasi-regulations, such as policies and guidelines. 

15 The Better Regulation Office (BRO) defines regulation as “any compulsion, obligation, demand 

or prohibition placed on a business (including sole traders), not for profit organisation or 

individual, or their activities, by an Act, Regulation or other statutory rule. This includes 

ministerial orders, guidelines and planning instruments” (Better Regulation Office, Guidelines 

for estimating savings under the red tape reduction target, February 2012, p 4). The Productivity 

Commission defines a regulatory role as “creating, imposing, enforcing or administering rules 

that prescribe the actions of others” (Productivity Commission, Performance Benchmarking of 

Australian Business Regulation: The Role of Local Government as Regulator, July 2012, Vol 1, p 80). 



functions 

Regulatory functions under the Local Government Act 1993 

The LG Act establishes councils, provides their governance framework and sets 

out their core service, regulatory and other functions. 

There are 2 main kinds of local government regulatory functions exercised by 

councils within their area under the LG Act: 

1. Various activities can only be carried out if the council gives its approval – eg, 

the operation of a caravan park or a public car park; use of community land 

for business or entertainment; management of waste; water supply, sewerage 

and stormwater drainage work. 16 Some of these approvals may also be 

granted as part of the development consent process under planning 

legislation. 

2. A council can order a person to do, or to stop doing, something – eg, order a 

person to keep fewer animals on their premises; or orders in relation to 

standards for hairdressers, beauty salons and mortuaries. Failure to obtain or 

to comply with an approval and failure to comply with an order are offences 

under the LG Act. 17 

Regulatory functions under other State legislation 

In addition to the LG Act, numerous other regulatory functions are conferred on 

local government under other State legislation and associated regulations. 

The Productivity Commission (the PC) identified approximately 50 laws in NSW 

which impose a regulatory responsibility on local government. 18 Our 

preliminary investigations, however, indicate this number may be greater. 

Key areas where the State government has delegated regulatory roles and 

responsibilities to local government are in the priority regulatory areas for this 

review: 

 

 

 

Planning – eg, development controls, development consents, certification of 

complying developments, and change of use approvals. 

Building and construction – eg, certification and compliance with building 

standards, and fire safety requirements. 

Environmental protection – eg, native vegetation, noxious weeds, waste 

management, noise control, coastal protection, underground petroleum 

storage systems, stormwater drainage, sewage and grey water systems, 

contaminated land, and solid fuel heaters. 

16 Local Government Act 1993, section 68. 

17 Local Government Act 1993, Chapter 7 Introduction, sections 124 and 626-628. 

18 Productivity Commission, Performance Benchmarking of Australian Business Regulation: The Role of 

Local Government as Regulator, July 2012, Vol 2, Table F.1, p 573. 



functions 

 

 

 

Public health and safety – eg, food safety, mobile food vendors, skin 

penetration businesses, cooling towers, warm water systems, and swimming 

pools. 

Parking and transport – eg, road openings and closures, structures in or over 

roadways or footways, traffic management plans and controls, public car 

parks, and road rules. 

Companion animal management – eg, registration of dogs and cats, 

dangerous dogs, and surrendered animals. 

Examples of regulatory functions in these areas are detailed in Table 2.2 below. 

Other areas in which local government has a regulatory role or responsibilities 

include: 

 

 

 

Liquor & restaurants – eg, controls on licensed premises, and restaurants on 

footpaths. 

Public areas & issues – eg, graffiti, hoardings, signs, waste bins, protection of 

public places, busking, street theatre, parks and playgrounds, public events, 

trees, and filming. 

Other activities – eg, hairdressers, beauty salons, mortuaries, backpacker 

accommodation, camping grounds, and caravan parks. 

Table 2.2 

Function 

Rule-making 

Approval 

Examples of local government regulatory functions 

Councils’ functions in priority regulatory areas 

Planning – prepare development control plans (DCPs) and local 

environmental plans (LEPs) 

Environment – make decisions on regulating the use of reserves and 

crown land 

Health & safety - may change the priority classification of an individual 

food business if the classification is inappropriate for any reason, including 

as a result of changes made to the conduct of the food business 

Parking - powers to build and install traffic control devices (eg, signs) and 

set parking fees 

Companion animals - can set rules on number and type of pets residents 

can keep as domestic animals, to encourage socially responsible pet 

ownership 

Planning – provide consent to development applications; impose consent 

conditions, including on licensed premises; approve changes of use 

Building – issue compliance, construction, occupation or subdivision 

certificates in relation to approved developments 

Environment – can issue approvals to install a solid fuel heater; approve 

wastewater systems 

Health & safety – require registration of retail food businesses and skin 

penetration premises 

Parking – issue parking permits or grant approval for use of footpaths by 

businesses (eg, restaurants or storage of items for sale) 

Companion animals - compulsory microchipping and registration of cats 

and dogs 



functions 

Notification 

Compliance 

Enforcement 

Referral 

Planning – receive notification from exempt developments (eg, notification 

of date of erection of temporary builders’ sheds, portaloos, marquees, etc)a 

Environment – receive notifications of emergency coastal protection works 

from land owners; receive notification of contaminated land 

Health & safety – receive notification where cooling towers or warm water 

systems are installed on premises 

Planning – inspection and investigation powers to enforce compliance with 

development consent conditions 

Building – enforce technical standards in buildings through mandatory local 

council certifiers. Such certifiers are enabled to inspect properties 

throughout the building process, to ensure the development is consistent 

with its approval conditions 

Environment – investigate activities relating to illegal waste dumping and 

noise complaints; regulation of underground petroleum storage systems 

Health & safety – powers of entry and inspection of public swimming 

pools, residential swimming pool fencing, skin penetration premises and 

food businesses 

Parking - undertake road safety activities 

Companion animals - investigate and enforce noise/nuisance issues or 

dangerous dogs and dog attacks; impound or seize animals 

Planning - order to demolish or repair a building, remove advertising 

structures, comply with development consent conditions, ensure fire safety 

Building – use inspection and certification processes to ensure the 

technical engineering standards of the Building Code of Australia are met 

(which sets parameters on sustainability, safety, health and amenity) 

Environment – may issue noise abatement directions and penalty notices 

for noise pollution, waste dumping and other environmental breaches 

Health & safety – may issue improvement notices to premises, equipment 

or a food transport vehicle to be put into a clean and sanitary condition 

Parking – powers to issue penalty notices or parking fines 

Companion animals - notify owners who fail to mandatorily register or 

microchip their cats and dogs; power to issue penalty notices 

Building - prepare fire safety inspection reports of third party premises, to 

provide to the Commissioner of NSW Fire and Rescue. 

a Ashfield Local Environmental Plan 1985. 

Local regulatory instruments 

Unlike other jurisdictions in Australia, councils in NSW cannot make their own 

laws (ie, by-laws or ordinances). However, they are empowered to issue consent 

instruments attaching conditions of approval and make statutory instruments 

under various legislation with legal effect, such as: 

 

 

local approvals policies and local orders policies under the LG Act 

development control plans and local environmental plans under planning 

legislation. 



functions 

While the content of these instruments is limited to what is set out in the primary 

legislation, they can impose regulatory requirements or burdens on businesses 

and the community. Indeed, these burdens are potentially significant as these 

instruments can prescribe actions to a greater level of detail than the primary 

legislation. 

Local orders policies (LOPs) and local approvals policies (LAPs) are peculiar to 

NSW and worth further examination. 19 LOPs set out criteria for assessing 

whether a council will issue orders to individuals or businesses that are creating 

hazards, pollution or failing to comply with standards under the LG Act. Our 

preliminary research indicates that not many councils appear to utilise these 

policies. 

LAPs provide exemptions from the need for approval normally required under 

section 68 of the LG Act and outline criteria for those activities where approval is 

required. 20 These exemptions can relate to activities such as caravan use, erecting 

awnings, bin use, public footpath use, busking, street theatre, loudspeaker use, 

transportable food vans and community organising days. Notably, this 

potentially provides a means of reducing regulatory burdens on small business 

and the community by providing such exemptions. LAPs appear to 

automatically lapse 12 months after the poll for a general election is declared, 

unless adopted by the newly elected council. 21 Our preliminary research also 

indicates there are few LAPs currently in operation and that LAPs are not being 

used extensively to provide exemptions. 

Quasi-regulation 

Local government can also develop guidelines, policies or codes that are not 

generally legally binding. Usually these instruments are developed to assist 

councils to implement, and the community to understand, requirements under 

law (eg, guidelines for applying for a particular permit). Depending on how it is 

designed, this ‘quasi-regulation’ can potentially reduce or increase the regulatory 

burden faced by business and the community. 

A register of local government regulatory functions 

In recognition of the significant role that local government plays as a regulator, 

the PC has identified as a leading practice the establishment of a comprehensive 

list of local government regulatory functions. 22 

19 Local Government Act 1993, sections 158 & 159. 

20 Activities such as use of community land, managing waste, water supply works, sewerage or 

stormwater drainage works, public car parks, caravan parks, manufactured home estates, solid 

fuel heaters, etc. 

21 Local Government Act 1993, section 165(4). 


Local Government as Regulator, July 2012, Vol 1, p 82. 



functions 

According to the PC, a complete, current and accessible list of local government 

regulatory functions would enhance understanding of local government 

regulatory responsibilities and compliance burdens placed on the community. 

This would assist state and local government in setting priorities and allocating 

resources. 23 

As part of our review, we have engaged consultants Stenning & Associates to 

prepare a comprehensive register of NSW local government regulatory functions. 

This register is expected to be available on IPART’s website by early October. 

We encourage stakeholders to consult this register when preparing their 

submissions to this paper. 

IPART seeks comment 

1 Local Approvals Policies (LAPs) can be used to provide exemptions from 

requiring approvals under the Local Government Act 1993. Should LAPs be 

used to provide more exemptions to reduce red tape? 

2 We are developing a register of local government regulatory functions (available 

from IPART’s website by early October). How useful is this register? Would 

there be any benefit in maintaining the register as an ongoing resource? 

2.3 The relationship between State and local government 

In NSW, the majority of local government’s regulatory functions are conferred 

under State Government legislation. Furthermore, there are numerous 

coordinating State agencies that local government has to deal with (see Box 2.1). 

Many of these agencies now fall within several super departments, but it appears 

they have their own status for regulatory purposes. Therefore, coordination 

between the 2 levels of government is important. This is recognised in the ToR 

for this review, which requires us to consider: 

…ways to improve governance of local government compliance and enforcement, 

including: 

• roles and responsibilities relative to NSW Government 

• interaction, consultation, and co-ordination with NSW Government. 

The sections below consider ways in which coordination and interaction between 

State and local governments can be enhanced. This includes ensuring there is a 

clear understanding of regulatory responsibilities, and the provision of assistance 

from State Government, where possible. 

23 Ibid, pp 81-82. 



functions 

Box 2.1 

NSW Government coordinating agenciesa 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department of Planning and Infrastructure 

NSW Ministry of Health 

Roads and Maritime Services 

Division of Local Government, Department of Premier and Cabinet 

Department of Primary Industries 

NSW Food Authority 

Sydney Catchment Authority 

Forests NSW 

Office of Liquor, Gaming and Racing 

Division of Resources and Energy 

Biosecurity NSW 

Screen NSW 

NSW Fair Trading 

Office of Environment & Heritage 

Environment Protection Authority 

Land and Property Information 

Department of Attorney General and Justice 

a This list is preliminary and based on the 50 laws that the PC identified as being related to local government. 

It is likely that more agencies (or different agencies) will be identified in the register (due early October) that we 

are commissioning as part of this review. 

Source: Productivity Commission, Performance Benchmarking of Australian Business Regulation: The Role of 

Local Government as Regulator, July 2012, Volume 2, Appendix F as updated by IPART. 

2.3.1 Clear definition of regulatory responsibilities and priorities 

The Victorian Competition and Efficiency Commission (VCEC) and the PC have 

both recognised the importance of clear articulation and guidance by state 

governments of regulatory priorities and responsibilities. This can help ensure 

that local government devotes sufficient resources to regulatory areas. It can also 

help ensure that regulatory activities are sufficiently coordinated and consistent 

between state and local governments and across councils. 24 


Local Government as Regulator, July 2012, Vol 1, p 74. Victorian Competition & Efficiency 

Commission, Local Government for a Better Victoria: An Inquiry into Streamlining Local Government 

Regulation – Summary Report, August 2010, pp 32-34. 



functions 

Conversely, there is potential for unnecessary regulatory burden if the role of 

each level of government in a regulatory area is uncertain or unclear to regulators 

and/or business and the community. For example, this could lead to: 

 

 

 

less than optimal regulatory resourcing: where one or both levels of 

government are not optimally allocating resources to key regulatory areas – 

which could add to business cost if there are delays in receiving responses or 

approvals to regulatory applications 

duplication: where both levels of government are undertaking the same, or 

similar, regulatory activities – which could add to business cost if, for instance, 

business is required to provide similar information to 2 levels of government 

for the same regulatory area or issue 

uncertainty: where there is uncertainty as to which level of government is the 

responsible regulator – which could add to regulatory costs if regulated 

businesses or individuals have to spend time trying to locate assistance or 

information on regulatory requirements and how to comply. 

2.3.2 Other forms of assistance from State Government 

As well as providing clear guidance on regulatory roles, State Government can 

play a role in enhancing the regulatory capacity and capability of local 

government through providing training, resources and other forms of assistance 

to local government. 

In particular, adequate resourcing is vital for ensuring local government is 

capable of fulfilling its regulatory role efficiently and effectively. Allocating or 

hypothecating revenue, allowing councils to cost recover through fees and 

charges and other measures can help to ensure adequate funding to achieve 

regulatory outcomes. 

The PC identified as a leading practice that State governments consider the 

resource implications for local government when developing and/or reviewing 

regulation. It noted that State governments can reduce the potential for 

regulations to be administered inefficiently or inconsistently by ensuring councils 

have adequate finances, skills and guidance to undertake new regulatory roles. 

It stated this could be achieved by including an assessment of local government 

capacities as part of the regulatory impact analysis for any regulation that 

envisages a role for local government. 25 It also identified the importance of 

adequate training and accreditation of local government officers to assist in 

delivering good regulatory outcomes. 26 



26 Ibid, pp 172 & 174. 



functions 

The NSW Government provides assistance and guidance to local government 

through the Division of Local Government (DLG), part of the Department of 

Premier and Cabinet (DPC). For example, DLG reviews individual councils 

under its ‘Promoting Better Practice Review’ program, in order to identify better 

practice and improvements in a range of council functions, including regulatory 

practices. Completed reviews are publically available after the relevant council is 

given an opportunity to comment. 27 The PC has identified this program as a 

leading practice, as it: 

 

 

 

 

can identify areas of deficiency and ways these can be addressed 

may encourage collaboration between state and local government to the 

benefit of both 

may identify leading practices in one council that can be transferred to other 

councils 

indicates whether councils are complying with state requirements 

provides a ‘health check’ of a council’s overall viability. 28 

As at the end of August 2012, 111 councils had undergone a Promoting Better 

Practice review, and it is anticipated that all councils will be reviewed by 30 June, 

2015. 29 

The Local Government and Shires Associations of NSW (LGSA) also plays a role 

in enhancing interaction and coordination between State Government and local 

government. The LGSA represents all 152 general purpose councils and 

14 special purpose councils. Since October 2010, there has been an 

Intergovernmental Agreement between the NSW Government and the LGSA, 

which aims to enhance communication and consultation and the existing 

collaborative working relationships between State and Local Government. 30 

The capacity of local government to effectively undertake compliance and 

enforcement activities is considered further below. 

27 See for more details: 

http://www.dlg.nsw.gov.au/dlg/dlghome/dlg_generalindex.asp?mi=6&ml=4&areaindex=LG 

RPBP, accessed 10 August 2012. 



29 Division of Local Government, pers comm, 6 September 2012. 

30 An Intergovernmental Agreement between The NSW State Government and the Local Government and 

Shires Association of NSW on behalf of NSW Councils, October 2010, available at: 

http://www.dlg.nsw.gov.au/dlg/dlghome/documents/information/Intergovernmental%20A 

greement%20between%20the%20NSW%20Government%20and%20the%20Local%20Governme 

nt%20and%20Shires%20Associations%20of%20NSW.pdf, accessed on 10 August 2012, p 2. 



functions 

IPART seeks comment. 

3 Are there areas where compliance or enforcement roles of local government and 

State Government agencies overlap or are unclear? What are the impacts of 

this on business, the community, councils or the State Government? 

4 Can you provide examples of poor consultation or coordination between local 


enforcement activities? What impact does this have on business, the 

community, councils or the State Government? 

5 Can you provide examples of good consultation or coordination between local 


enforcement activities? 

6 Can you suggest ways that local government and State Government agencies 

can work together to reduce red tape? 

7 Does the Division of Local Government’s ‘Promoting Better Practice Program’ 

assist local government in undertaking its regulatory activities more efficiently? 

8 Are there other ways to enhance assistance to councils? 

2.4 The regulatory capacity and capability of local government 

The ToR for this review require us to consider, amongst other factors, the current 

capacity and capability (ie, resources and skills) of local government to undertake 

their regulatory responsibilities, including whether and how these can be 

improved. 

As discussed at the beginning of this chapter, councils vary significantly in terms 

of their areas and socio-economic characteristics. As outlined below, they can 

also vary in relation to their fiscal capacity and regulatory expenditure and 

capability. 

These factors can impact on the regulatory burden faced by business and the 

community. For example, a remote area council with a small population may 

have difficulty attracting skilled planners. As a result, businesses may 

experience greater delays in obtaining planning consents or have to comply with 

sub-optimal consent conditions. These factors can also affect the viability of 

potential reform options. For instance, reforms to instigate more risk-based 

enforcement activities are unlikely to be implemented if a council is lacking 

relevant expertise in its workforce. 



functions 

2.4.1 Fiscal capacity 

Fiscal capacity of councils relates to their ability to raise revenue to pay for public 

services, which include regulatory functions. In 2008, the PC assessed local 

government revenue raising capacity and concluded that: 

 

 

 

capital city councils had the highest fiscal capacity, principally attributed to 

high business incomes and comparatively small resident populations 

while some remote councils also had high levels of fiscal capacity due to 

substantial business income from mining and petroleum activity in their area, 

there were others which had particularly low fiscal capacity, including some 

Indigenous councils 

on average, urban councils had intermediate levels of fiscal capacity, with 

urban fringe councils having the lowest levels. 31 

Local government receives revenue from a variety of sources, as seen in 

Figure 2.1. In 2010/11, NSW local government’s revenue was around $10 billion 

dollars. 32 

Figure 2.1 

NSW Local Government Revenue Sources 

Taxation revenue (33%) 

Sales of goods and 

services (32%) 

Current grants and 

subsidies (11%) 

Interest income (4%) 

Other (20%) 

Data source: ABS, Government Finance Statistics, Australia, 2010-11, cat. 5512.0, Table 331, Table 1. 

31 Productivity Commission, Assessing Local Government Revenue Raising Capacity, April 2008, 

p XXV. 

32 ABS, Government Finance Statistics, Australia, 2010-11, cat. 5512.0. 



functions 

Fiscal capacity affects a council’s ability to resource its regulatory activities. A 

council with high levels of fiscal capacity is better placed to purchase expertise, if 

lacking, or attract skilled staff. It is also better placed to implement inspections, 

audits or other costly enforcement activities. Lack of fiscal capacity may 

adversely affect businesses and the community if the result is ill-targeted 

enforcement activity undertaken by ill-equipped staff, or delays in responses to 

regulatory applications or queries from businesses and the community. Delay 

costs are discussed in Chapters 3 and 4. 

2.4.2 Regulatory expenditure and capability 

The diversity of councils in NSW means there is a wide range of staff numbers 

per council, as well as a range of different skills and skill shortages across the 

State. 33 Specifically, there is also a wide range of expenditure on regulatory 

functions and regulatory capability. 

According to the PC, in NSW the median expenditure dedicated by local 

government to undertaking regulatory functions relating to business is around 

3%. 34 However, for one council in NSW, expenditure on their regulatory 

activities was reported to be as high as 50% of their total expenditure. 35 

Regulatory activities take approximately 11% of total local government staff 

time. 36 The range of time spent on regulatory activities varies markedly between 

individual councils. In NSW, local government respondents indicated as little as 

1% and as much as 80% of their time was spent on undertaking their regulatory 

roles. 37 The regulatory workforce is largest in metropolitan areas where there is a 

higher concentration of businesses to people. 

This wide variation in regulatory activity may have implications for regulatory 

burden on businesses and the community if, for example, low activity means 

regulatory objectives are not being achieved or very high activity represents 

over-zealous or inefficient enforcement. The variation in regulatory activity 

across NSW may suggest a higher likelihood of inconsistent regulatory 

approaches applied across different local government areas. This may also 

translate to higher regulatory burden, especially for businesses operating across 

local government boundaries. 

33 The PC reports vacancy rates in councils to be as high as 15% generally, and much higher for 

specific skills, eg, 21% of councils in NSW have at least 1 vacancy for Environmental Health 

Officers. Productivity Commission, Performance Benchmarking of Australian Business Regulation: 

The Role of Local Government as Regulator, July 2012, Vol 1, Table 4.8, p 149 and Table 4.14, p 161. 

34 Ibid, p 142 and Appendix M. 

35 Ibid, Table 4.5, p 142. 

36 Ibid, p 150. 

37 Ibid. 



functions 


9 Do councils have the resources and skills to undertake regulatory activities 

effectively? 

10 Can you provide examples of how a lack of council resources or skills impacts 

on business or the community? 

11 How can councils improve their resources and skills? 

2.5 The relationships between councils 

The ToR for this review require us to consider ways of improving the quality of 

regulatory administration by local government, including consistency of 

approach, economies of scale and recognition of registration in multiple local 

government areas. In other words, we are to consider ways to improve 

regulatory administration through enhanced coordination and cooperation 

between local councils. 

2.5.1 The benefits of coordination and cooperation between councils 

There are distinct benefits that can be achieved from effective coordination and 

cooperation between councils, such as: 

economies of scope and scale through sharing resources and knowledge – 

which can achieve better regulatory outcomes at lower cost (eg, shared 

rangers, joint building inspections) 

 

 

consistency in approach across local government areas – which can provide 

greater certainty and lower compliance costs for businesses operating across 

these areas 

mutual recognition - where compliance by a business or individual with the 

requirements of one council is deemed to satisfy the regulatory requirements 

of another council (eg, currently there is no mutual recognition of mobile food 

vendors in NSW, which are required to be registered in every local 

government area, but there is in Victoria, South Australia and Queensland). 38 

Conversely, a lack of coordination or cooperation between councils can impose 

regulatory burdens on business and the community by leading to an inconsistent 

application of rules (eg, building code) or a less strategic approach to 

enforcement, particularly of cross-boundary issues (eg, waste dumping). 


Local Government as Regulator, July 2012, Vol 1 & 2, pp 333 & 646. 



functions 

2.5.2 Types of coordination and cooperation between councils 

There are over 600 collaborative arrangements between councils in NSW, across a 

variety of areas. 39 These include: 

 

 

 

County Councils – there are 14 County Councils formally established under 

the Local Government Act to provide joint services for member councils (7 for 

water supply, 6 for weeds eradication, and 1 for floodplain management) .40 

Regional Organisations of Councils (ROCs) – most councils in NSW are 

members of one or more of the 18 ROCs that cover most of the state. 41 ROCs 

can be forums for regional advocacy, research, planning, and sharing 

resources and knowledge between constituent councils. 

Other collaborative arrangements aimed at sharing information, expertise and 

resources and/or achieving a common goal – such as: 

– Sister City agreements – eg, the Liverpool Plains Shire Council/Blacktown 

City Council Sister City Agreement involves staff exchanges covering areas 

such as noxious weed control, planning and ranger services. 42 

– Advisory committees, alliances and regional schemes – eg, the Illawarra 

Urban Development Committee, the Mid Lachlan Alliance of Councils, the 

South Western Regional Waste Management Group. 

– ROC-based collaborations – eg, Riverina Eastern ROC’s initiative ‘Start 

your Business here’. This is an on-line, self-guided computer program. It 

allows start-up businesses to determine what regulations and planning 

controls they must comply with in each of the Local Government Areas 

that comprise the Riverina Eastern ROC region. 43 

– Creation of joint entities of councils dedicated to providing functions on 

behalf of the councils – eg, Hunter Councils Inc, which represents 

12 councils in the Hunter Valley and is a shared services and regional 

procurement entity. It has a dedicated local government training institute, 

a regional data centre, an environmental division, and legal services. 44 

– Agreements for sharing specific resources, services or approaches – eg, 

Coffs-Bellingen Trade Waste Inspection Services, Griffith Region Food 

Safety Inspection Agreement. 

– Agreements relating to specific projects and other collaborations – eg, 

Waverley, Woollahra and Randwick Councils’ Ecological Footprint 

Project. 45 

39 NSW Independent Local Government Review Panel, Strengthening your Community – 

Consultation Paper, July 2012, p 11. 

40 Ibid. 

41 Ibid. 

42 NSW Department of Local Government, Collaborative Arrangements between Councils – Survey 

Report, June 2011, p 41. 

43 See: http://startyourbusinesshere.com.au/, accessed 11 September 2012. 

44 See: http://www.huntercouncils.com.au/, accessed 17 August 2012. 

45 NSW Department of Local Government, Collaborative Arrangements between Councils – Survey 

Report, June 2011, pp 75-214. 



functions 

Table 2.3 below provides examples of collaborative arrangements between 

councils, by operational or regulatory area. 

Table 2.3 

Examples of collaborative arrangements between councils, by 

area 

Area 

Regional planning 

Waste management 

Environmental health 

Water and sewerage 

Example 

Regional General Managers groups/meetings 

Shared facilities, approaches to illegal 

dumping, recycling projects 

Shared lab services, pest control 

Regional water schemes, floodplain 

management 

Development assessment and town planning Shared staff, joint building inspections, 

development control 

Roads and engineering 

Joint employment of road safety officers, 

shared maintenance 

Weed management 

Noxious weeds groups and shared noxious 

weeds officers 

Companion animal management 

Shared ranger and impounding services 

Training 

Shared training services 

Note: This is not a complete list and we have focused on areas that fall within the priority regulatory areas. 

Source: Department of Local Government, Collaborative Arrangements between Councils – Survey Report, 

June 2011, pp 215-222. 

Related to cooperation and coordination, is the issue of consolidation of local 

government. This is not within the scope of our review. 

2.5.3 Leading practice in local government coordination and cooperation 

In its recent review of local governments as regulators, the PC recognised the 

value of cooperation and coordination between councils to achieve economies of 

scope and scale in resources and skills. 46 

It identified the following examples: 

 

 

 

In Victoria, there is a Rural Planning Flying Squad, which sends out planning 

experts to councils that are experiencing shortages in planning resources and 

skills 47 

In NSW, Conargo, Deniliquin and Murray have agreed to have common 

development applications forms and procedures 

In Western Australia, several councils in the South West have agreed to 

develop online building and health permits using the same software. 48 


Local Government as Regulator, July 2012, Vol 1, pp 181-182. 

47 Ibid, pp 175-176. 

48 Ibid, p 198. 



functions 


12 If you are operating a business across more than 1 council area, how do 

differences in council approaches impact on your business? 

13 How, and in what areas, could coordination between councils be improved to 

reduce unnecessary regulatory burdens on business and the community? 

14 In what areas could mutual recognition (eg, recognition of registration in multiple 

local government areas) be used to reduce regulatory burdens on business or 

the community? 

15 What other approaches could be used to improve the way councils apply 

regulations? 


3 Identifying reform opportunities 


More efficient regulation can boost productivity and promote economic growth 

in many ways. For example, it minimises the time businesses spend complying 

with regulatory requirements, which can increase their ability to innovate, be 

entrepreneurial and respond creatively and quickly to market opportunities or 

threats. 49 For regulation to be efficient, it must be efficient in both design and 

implementation. 

This chapter discusses the impacts that local government compliance and 

enforcement activities can have on business and the community, and identifies 

some potential sources of unnecessary regulatory burdens – which can relate to 

both the design and implementation of regulation. It then seeks to articulate 

some best practice regulatory enforcement principles to guide this review. 

Lastly, we consider some of the leading practices highlighted by the PC’s review 

of local government as a regulator, 50 as a possible source of reform opportunities 

for NSW. 

3.1 The impacts of local government regulatory activities 

Regulation requires businesses and individuals to undertake certain tasks to 

comply with the rules. These may include, for example, form filling, making a 

property available for inspection or purchasing equipment to ensure standards 

are meet. Complying with regulatory requirements is likely to incur some costs. 

Some of these costs may be small, but some may have a significant impact on the 

business, individual or the community. 

The Better Regulation Office (BRO) outlines 4 cost categories that we will assess 

under the red tape reduction target. These include: 

 

Administrative costs – which are often incurred in demonstrating compliance 

with a regulation through information-related activities such as completing 

and lodging forms and applications (eg, form filling to obtain an approval, 

inspections, certification, audits and reporting). 

49 Better Regulation Office, Guide to Better Regulation, November 2009, p 7. 


Local Government as Regulator, July 2012. 



 

 

 

Substantive compliance costs – which largely relate to capital and production 

costs that are required to comply with regulation (eg, equipment, training and 

waste management). 

Fees and charges – which must be paid directly to local government (eg, 

licence and permit fees, fines and levies, but not rates). 

Delay costs – which are costs incurred due to a delay in an approval process 

or other regulatory transaction with local government (eg, capital holding 

costs incurred by a developer due to delays in obtaining a development 

approval). 51 Our preliminary consultation indicates that delay costs can be of 

significant concern to business and the community. 52 

Regulations can have varying impacts depending on the size of a business. For 

example, small businesses’ administrative and compliance costs as a proportion 

of their business turnover will generally be much higher than for larger 

businesses. However, larger businesses are more likely to be affected by a 

greater range of regulatory requirements. 

3.2 Sources of unnecessary regulatory burden 

Regulation necessarily involves some costs or burdens on businesses, individuals 

or the community in order to achieve its objectives. As long as there are net 

benefits to a particular regulation, these costs are considered justified. 

However, when regulation is poorly designed or implemented, for example by 

imposing duplicative reporting requirements or being inconsistently applied, it 

may impose unnecessary costs or burdens. These are costs or burdens greater 

than are necessary to achieve the regulatory objectives. 

Box 3.1 below identifies some possible sources of unnecessary regulatory 

burdens that can arise in the implementation or enforcement of regulations. 

Some of these may also arise as a result of the underlying regulatory design – eg, 

unclear or complex regulatory requirements, unclear delineation between State 

and local government responsibilities, or duplicative/overlapping requirements. 

51 These costs are quite narrow and do not include indirect costs which are excluded from the 

calculation of savings towards the red tape reduction target. BRO, Guidelines for estimating 

savings under the red tape reduction target, February 2012, p 6-7. 

52 Victorian Competition and Efficiency Commission, pers comm, 17 August 2012. 



Box 3.1 

Examples of possible sources of unnecessary regulatory burdens 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

delays in obtaining approvals from councils 

excessive requirements imposed by councils through approvals, permits or other 

regulatory instruments 

inconsistent interpretation or application of regulations by councils 

multiple registration requirements on businesses operating in different local 

government areas (ie, required to be registered for same activity by different councils) 

duplicative or overlapping state and local government regulatory requirements (eg, 

requirements to report to both state and local government on the same regulatory 

issue) 

unclear or complex requirements hindering council’s enforcement undertakings and 

business/community compliance 

a lack of timeliness in regulatory decisions of councils 

unwieldy licence application and approval processes 

variations in, or lack of, enforcement of regulatory requirements 

confusion or lack of clarity as to council’s and State agencies’ regulatory role in a 

particular regulatory area 

invasive regulatory behaviour, such as overly frequent audits or inspections 

lack of, or poor quality, advice or guidance provided by councils in relation to obtaining 

approvals or other regulatory compliance matters 

excessive information requests 

excessive fines, fees or charges 

Source: Some examples taken from Productivity Commission, Performance Benchmarking of Australian 

Business Regulation: The Role of Local Government as Regulator, July 2012, Vol 1, Box 6.1, p 214 and Table 

6.9, p 242. 

Some sources of unnecessary regulatory burdens may be more or less pertinent 

depending on the size of a business. For example, larger firms operating across 

local government areas may have concerns with councils inconsistently applying 

regulations, which small businesses operating in only one council area don’t 

share. 


16 What specific local government compliance or enforcement activities are 

imposing unnecessary costs on business or the community? 

17 What are these costs (eg, form filling, reporting, compliance, delay, fees and 

charges)? 



3.3 Best practice regulatory enforcement 

The principles of best practice regulation are now enshrined in NSW 

Government regulation making processes through BRO’s 2009 Guide to Better 

Regulation. However, the principles of best practice regulatory enforcement have 

not been explored to the same extent in NSW. 

In considering whether unnecessary burdens are being imposed through existing 

regulatory enforcement practices and identifying possible reform options, it is 

useful to consider what best practice regulatory enforcement would look like. 

International jurisdictions such as the UK, and international bodies such as the 

OECD, have done considerable work in this area. In NSW, the BRO is also 

undertaking work in this area. The following OECD principles capture the key 

elements of best practice regulatory enforcement: 

 

 

 

 

 

Proportionate: regulators should only intervene when necessary. Remedies 

should be appropriate to the risk posed, and costs identified and minimised 

Accountable: regulators must be able to justify decisions, and be subject to 

public scrutiny 

Consistent: government rules and standards must be seamless and 

implemented fairly 

Transparent: regulators should be open, and keep regulations simple and user 

friendly 

Targeted: regulators should be focused on the problem, and minimise the side 

effects. 53 

As an example, the UK’s Hampton Review set out a number of principles for 

good regulatory enforcement. 54 These are outlined in Box 3.2 below. 

53 OECD, Guiding Principles for Regulatory Quality and Performance, Paris, 2005. 

54 Philip Hampton, Reducing Administrative Burden: Effective Inspection and Enforcement, March 

2005. 



Box 3.2 

Principles of good inspection and enforcement 

 

 

 

 

 

 

 

 

 

 

Regulators, and the regulatory system as a whole, should use comprehensive risk 

assessment to concentrate resources on the areas that need them most. 

Regulators should be accountable for the efficiency and effectiveness of their 

activities, while remaining independent in the decisions they take. 

All regulations should be written so that they are easily understood, easily 

implemented, and easily enforced, and all interested parties should be consulted when 

they are being drafted. 

No inspection should take place without a reason. 

Businesses should not have to give unnecessary information, nor give the same piece 

of information twice. 

The few businesses that persistently break regulations should be identified quickly, 

and face proportionate and meaningful sanctions. 

Regulators should provide authoritative, accessible advice easily and cheaply. 

When new policies are being developed, explicit consideration should be given to how 

they can be enforced using existing systems and data to minimise the administrative 

burden imposed. 

Regulators should be of the right size and scope, and no new regulator should be 

created where an existing one can do the work. 

Regulators should recognise that a key element of their activity will be to allow, or 

even encourage, economic progress and only to intervene when there is a clear case 

for protection. 

Source: Philip Hampton, Reducing Administrative Burden: Effective Inspection and Enforcement, March 2005, 

p 7. 


18 Are the principles of best practice regulatory enforcement (as set out in this 

paper) a sound basis for assessing good compliance and enforcement practices 

and testing reform options? 

19 How do State Government and councils review or assess councils’ regulatory 

performance? How could this be improved? 

20 To what extent do councils follow best practice enforcement principles? 

3.4 Possible reforms to regulatory practices – leading practices 

The ToR for this review requires us to consider the appropriateness and 

feasibility of NSW adopting the leading practices identified in the PC’s report 

Performance Benchmarking of Australian Business Regulation: The Role of Local 

Government as Regulator. 



In reviewing the role of local government as regulator across Australia, the PC 

identified a number of leading practices. Some of these relate generally to how 

local government undertakes its enforcement functions, and others to specific 

areas of regulation. These areas include most of the priority regulatory areas we 

have been asked to consider – ie, planning, building and construction, parking 

and road transport, public health and safety and environmental regulation. 

These general and specific leading practices are discussed in the sections below. 

3.4.1 General leading practices 

There are a number of general leading practices from the UK that the PC 

recommends be considered by state and local governments. These include the 

establishment of a Local Better Regulation Office (LBRO), a statutory compliance 

code for regulators, and a Primary Authority Scheme (PAS). These are discussed 

briefly below. 

A Local Better Regulation Office (LBRO) 

An agency such as the UK’s Local Better Regulation Office (LBRO) would focus 

on the regulatory activities of local government and have responsibilities and 

powers to implement, monitor, coordinate and prioritise regulatory activities 

between and within levels of government. We note there could be various 

options for hosting these responsibilities in NSW. These may include an existing 

state agency such as the Division of Local Government or under contract to the 

LGSA. 55 

A statutory compliance code for regulators 

A statutory compliance code for regulators, based on the UK’s Hampton 

principles, would be aimed at improving the quality and consistency of local 

government regulatory enforcement and inspection activities to minimise the 

burden of these activities on businesses (see Box 3.3 below). 56 


Local Government as Regulator, July 2012, Vol 1, p 72. At the end of 2011 the functions of the 

LBRO were incorporated into a dedicated unit called the Better Regulation Delivery Office in 

the Department for Business, Innovation and Skills. See: 

http://www.legislation.gov.uk/ukdsi/2012/9780111517772/pdfs/ukdsi_9780111517772_en.pd 

f. 





Box 3.3 

UK Regulators’ Compliance Code - obligations of the Code: 

 

 

 

 

 

 

 

Economic progress – Regulators should consider the impacts of their regulatory 

interventions on economic progress, including considering the costs, effectiveness 

and perceptions of fairness of regulation. In particular, regulators should try to ensure 

the burdens of their interventions fall fairly and proportionately on small businesses, 

given the size and nature of their activities. 

Risk assessment – Risk assessment should proceed all regulatory activities, 

including data collection, information requirements, inspection programs, 

advice/support programs and enforcement/sanctions. Risk assessment involves the 

identification and measurement of capacity of harm and an evaluation of the likelihood 

of the occurrence of harm. By basing regulatory work on an assessment of the risks 

to regulatory outcomes, regulators are able to target resources where they will be 

most effective and risk is highest. 

Advice and guidance – Regulators should provide general information, advice and 

guidance to make it easier to understand and comply with regulation. Advice should 

be clear, concise and accessible. 

Inspections – Regulators should focus their greatest inspection effort where risk 

assessment shows a breach would pose a serious risk to a regulatory outcome and 

there is a high likelihood of non-compliance. Burdens of inspections from the same or 

different regulators should be minimised through joint or coordinated inspections. 

Information requirements – Regulators should undertake an analysis of costs and 

benefits of data requests when determining what data they require, and should 

consider varying data requests according to risk, reducing frequency of data 

collection, obtaining data from other sources and allowing electronic submission. 

Duplication of data collection by regulators should be avoided by sharing data. 

Compliance and enforcement actions – Regulators should publish an enforcement 

policy. In accordance with the Macrory Review, regulators should also: 

– measure outcomes not just outputs 

– justify their choice of enforcement actions year on year to interested parties 

– follow-up enforcement actions where appropriate 

– enforce in a transparent manner 

– be transparent in the way in which they apply and determine penalties 

– avoid perverse incentives that might influence the choice of sanctioning response. 

Accountability – Regulators should increase transparency by reporting on outcomes, 

costs and perceptions of their enforcement approach. 

Sources: Department for Business Enterprise & Regulatory Reform, Regulators’ Compliance Code: Statutory 

Code of Practice for Regulators, 17 December 2007; and Macrory, R, Regulatory Justice: Making Sanctions 

Effective, November 2006, p 10. 

The BRO has also developed draft elements of good regulatory practice, based on 

these principles. These could also be considered as a basis for a compliance code 

for NSW regulators (see Box 3.4 below). 



Box 3.4 

NSW Better Regulation Office – draft elements of good regulatory 

practice: 

 

 

 

 

Risk based regulation 

– risk assessments inform all regulatory activities 

– a range of interventions including regulatory and non-regulatory options 

– concentrate resources in areas that threaten the achievement of outcomes 

– intelligence-led operational risk targeting and inspections 

– proportionate and meaningful sanctions promote behaviour change. 

Accountability 

– common standards and expectations about the way the regulator works 

– clear governance of outsourced regulatory functions 

– monitor performance and the extent to which the regulator meets its objectives. 

Service efficiency 

– cost efficient delivery of regulation that is business-friendly and achieves outcomes 

– streamline transactions with business and community and improve e-capability; 

require information to be provided to government only once 

– implement appropriate planning and resource management practices. 

Outcomes focus 

– clearly defined and published regulatory outcomes to enhance transparency 

– compliance action that is directed towards the achievement of results, rather than 

imposing enforcement outputs. 

 

 

 

Improvement framework 

– experiment with what works, evaluate closely 

– adapt interventions to their effectiveness in achieving intended outcomes 

– benchmark regulator performance and identify good practice 

– collaborate with other regulators. 

Understand business and community 

– building and monitoring effective stakeholder relationships 

– understanding the reasons and context for non-compliance 

– engage stakeholders in identifying risk, risk analysis and evaluation of regulator 

performance 

– provide authoritative and accessible advice and information. 

Culture 

– support economic progress by being less bureaucratic and less administratively 

burdensome for business 

– a program of continuous training and capacity building within regulatory agencies. 

Source: Better Regulation Office, unpublished, August 2012. 



A Primary Authority Scheme (PAS) 

A Primary Authority Scheme (PAS), based on the UK’s PAS, would be aimed at 

providing more regulatory consistency and certainty for businesses that operate 

across a number of local government areas. Under this scheme, the business can 

form a partnership with a single council who becomes the primary authority 

with which other councils must defer to in relation to regulatory compliance 

issues (see Box 3.5 below). 57 

The VCEC, as part of its Inquiry on Streamlining Local Government Regulation, has 

examined the advantages and disadvantages of the PAS. On balance, the VCEC 

concluded: 

The primary authority scheme is a promising innovation, which could reduce 

inconsistencies that impose significant costs on businesses … However … more 

information is needed before the proposal is considered in Victoria. 58 

We note that the benefits of PAS would depend on the extent to which 

differences or inconsistencies in regulatory approaches across councils impose 

unnecessary regulatory burdens on businesses and the community. These 

benefits would then have to be weighed against the costs of establishing and 

running the PAS. 



58 Victorian Competition and Efficiency Commission, Local Government for a Better Victoria: An 

Inquiry into Streamlining Local Government Regulation – Final Report, August 2010, p 311. 



Box 3.5 

The UK’s Primary Authority Scheme 

Key features of the PAS are: 

 

 

 

 

 

 

 

Any company operating across council boundaries can form a partnership with a 

single council in relation to regulatory compliance. These agreements can cover all 

environmental health legislation, or a specific function such as food safety. 

A central register of the partnerships, held on a secure database, provides an 

authoritative reference source for businesses and councils. 

If a company cannot find an appropriate partner, it can ask the Local Better Regulation 

Office to find a suitable local authority for it to work with. 

A primary authority provides robust and reliable advice on compliance that other 

councils must take into account, and may produce a national (or state-wide) inspection 

plan at the request of the business, to coordinate activity. 

Before other councils impose sanctions on a company, including formal notices and 

prosecutions, they must contact the primary authority to see whether the actions are 

contrary to appropriate advice it has previously issued. (This requirement to consult is 

waived if consumers or workers are at immediate risk.) If the proposed action is 

inconsistent with advice previously issued by the primary authority, it can prevent that 

action being taken. 

Where the authorities cannot agree, the issue can be referred to the Local Better 

Regulation Office for a ruling, which is made within 28 days. 

The question of resourcing the partnership is up to the councils and businesses 

concerned. Where necessary, a primary authority can recover its costs. 



3.4.2 Specific leading practices – priority regulatory areas 

The sections below outline leading regulatory practices of councils within 

Australia, as identified by the PC, in the areas of planning, building and 

construction, environment, public health and safety, and parking and road 

transport. 

Planning 

The PC suggests there is a range of leading practices being used across councils 

in relation to planning and development assessment that could reduce delays 

and inconsistencies, streamline administrative processes and assist local 

government to resolve land use and coordination issues. These are outlined in 

Box 3.6. 



Box 3.6 

Leading practices used across Australian councils in relation to 

planning and development assessment 

The PC identified the following lead practices: 

 

 

 

 

 

 

 

 

 

 

 

pre-lodgement meetings with advice provided in writing, clear and accessible planning 

scheme information and application guidelines 

the use of a standard approval format and implementing standardised definitions and 

processes to drive consistency in planning processes between councils 

timely assessment of applications and completion of referrals 

facilities that enable electronic submission of applications and making information on 

planning decisions publicly available to increase transparency and public confidence 

the wider adoption of track-based assessment (ie, development applications streamed 

into appropriate assessment ‘tracks’ that correspond with the level of risk and impact 

and therefore the level of assessment attention required to make an appropriate 

decision) 

developing strategic plans and eliminating as many uncertainties as possible at this 

stage, and making consistent decisions about transport, other infrastructure and land 

use 

ensuring local planning schemes are regularly updated or amended to improve 

consistency with state and regional planning schemes and strategies 

adopting broad land-use zones to provide potential for increased competition 

increasing transparency and community consultation when undertaking ‘spot 

rezonings’ 

providing state support to councils who require assistance with strategic planning or 

aligning local plans with regional or state plans 

wider adoption of code-based assessments, where appropriate, to make decisionmaking 

processes more objective, less discretionary and cheaper for businesses.a 

a Productivity Commission, Performance Benchmarking of Australian Business Regulation: The Role of Local 

Government as Regulator, July 2012, Vol 1, pp 35-36. Note these recommendations are consistent with the 

findings in the Productivity Commission’s earlier report, Performance Benchmarking of Australian Business 

Regulation: Planning, Zoning and Development Assessments, May 2011. 


Local Government as Regulator, July 2012, Vol 1, pp 35-36, 425 and 433. 

The NSW planning system review Green Paper indicates that a number of these 

leading practices will be part of the reform package being proposed for adoption 

in NSW. In particular, NSW is considering: 

 

 

 

adopting track-based assessment 

elevating the importance of strategic planning and coordination with 

transport and infrastructure decisions (ie, Regional Growth Plans) 

adopting broader land-use zoning (ie, new Enterprise Zones) that are more 

flexible, with fewer development controls 



 

 

 

 

 

 

 

 

introducing ‘strategic compatibility certificates’ to enable developments 

consistent with regional strategies to proceed even if the local land use plan 

has not yet been amended to catch up with the regional strategy 

greater use of code-based assessments (complying development) 

reducing the number of planning instruments (ie, State Environmental 

Planning Policies, Regional Environmental Plans, Local Environmental Plans 

and Development Control Plans) to remove complexity and confusion in the 

planning system 

reducing referrals and concurrence requirements, and consolidating NSW 

Government agencies’ requirements for developments 

establishing clear principles in relation to the types of development consent 

conditions that are appropriate (ie, clear, reasonable, cost effective and 

proportionate), removing duplication with other regulatory requirements and 

standardising these conditions to improve consistency across councils 

requiring mandatory monitoring of State and local government performance 

against clear indicators (measurable planning goals), with regular public 

reporting and review 

adopting an ‘amber light approach’ – formally requiring consent authorities to 

provide advice to an applicant of amendments that would make an otherwise 

unacceptable proposed development acceptable, if adopted, and allow the 

proposal to be so modified 

introducing a cultural change program, to be led by the Department of 

Planning & Infrastructure in partnership with the Planning Institute of 

Australia, local government and stakeholder representatives, to change the 

current culture of the planning profession – which has been described as being 

overly controlling, highly risk-adverse, unhelpful, bureaucratic and focused 

on how to stop outcomes – to a culture of facilitating good outcomes. 59 

As discussed in Chapter 1 of this paper, the ToR directs us to ensure any 

recommended reforms from our review will enable councils to maximise the 

opportunities from the planning system review. 

59 NSW Government, A New Planning System for NSW: Green Paper, July 2012. 



Building and construction 

In NSW, the PC reports that local government regulation of building sites occurs 

on a case by case basis, typically through conditions imposed at the planning 

approval stage and the compliance process during the construction phase. It 

notes that this allows for greater flexibility in tailoring regulation to specific 

circumstances. However, it also reports that this provides for more discretion by 

local government officers and hence greater regulatory variability and possibly 

less transparency. 60 

The PC’s analysis also suggests that councils in NSW impose standards (eg, 

sustainable building design) above and beyond the Building Code of Australia 

(BCA), which are often considered by businesses to be unnecessary. 61 In 2008, the 

Australian Building Codes Board (ABCB) reviewed local government 

interventions above requirements specified in the BCA and reported that there 

are a minimum of 8 in NSW. It subjected these to cost benefit analysis and found 

they increase business compliance costs by between 2% and 14%. It also reported 

that these interventions impact on housing affordability, and suggested that 

many of the issues regulated would be best left to market mechanisms. 62 

Across Australia, the PC highlighted a number of leading practices in the area of 

building and construction. 

Gateway approach 

A gateway approach is used by Queensland and Victoria to monitor and assess 

all building standards that are higher than those set out in the BCA. Assessments 

include independent cost benefit analysis of proposed standards. In this way, 

state governments effectively act as gatekeepers in relation to additional building 

standards. 63 

Regimes for application fees 

According to the PC, there is significant inconsistency across NSW councils in 

relation to building and construction application fees – with fees varying by over 

$2,000, based on a 200m 2 residential dwelling. There is a larger variation across 

councils for commercial applications. There are also questions about the costreflectiveness 

of some fees. 64 


Local Government as Regulator, July 2012, p 274. 

61 Ibid, p 281. 

62 Ibid, p 266 – 268. 

63 Ibid, p 270. 

64 Ibid, pp 262 and 264-265. 



The PC recommended that local government charging regimes for assessing 

building applications be based on the recovery of efficient administrative costs. 

It states that this would avoid potentially inefficient cross-subsidies between 

different types of building applications and between building and non-building 

revenue sources. It also notes that it would enable local government to devote 

greater resources to assessing building applications and should reduce 

processing times and the associated delay costs faced by builders. 65 

Cost effective risk-based inspection regimes 

According to the PC, NSW has more construction inspections than any other 

state or territory. Furthermore, it notes that there is no indication that there is 

more defective or lower quality building in states that have a more moderate, 

risk-based approach to inspections. It consequently advocates a move towards a 

risk-based approach for building and plumbing inspections, as a means of 

reducing regulatory costs without compromising the integrity of the building 

process. 66 

The PC stated: 

As a general rule, businesses, LG’s and consumers would benefit from having 

regulators focus on areas which pose the greatest risk to public health and safety, 

and/or would be the most costly to rectify and/or have the highest likelihood of 

compliance breaches occurring (including the compliance history of the builder). 

Inspection frequency (and duration) should be tailored to meet that underlying 

principle. 67 

Environmental regulation 

According to the PC, leading practices in relation to local government 

administration and enforcement of environmental regulation include: 

 

 

 

clarity on cost recovery associated with implementing environmental 

regulations 

clear delineation of responsibilities between local government and state 

agencies with environmental responsibilities (as there is some evidence of 

duplication in information requirements placed on business – eg, in relation to 

land clearing applications) 

sharing skilled staff and resources across councils to undertake environmental 

regulation, provide training and mentoring – which could assist in reducing 

delays in businesses receiving environmental approvals 

65 Ibid, p 265. 

66 Ibid, pp 281-285. 

67 Ibid, p 283. 



 

clear links between state government requirements for local government 

environmental administration and related funding and efficient cost recovery 

by local government. 68 

In NSW, the PC identified some apparent overlap in the regulation of land 

clearing. Clearing of vegetation is regulated under the Native Vegetation Act 2003 

(NV Act) and the Native Vegetation Regulation 2005. To clear land, a landholder 

may either apply to council for development consent or submit a draft property 

vegetation plan (PVP) to the catchment management authority for approval. 69 

According to the PC, the NV Act does not override or replace any requirement to 

obtain consent from a council where a Local Environmental Plan requires 

approval for the clearing of native vegetation. Similarly, a development 

approved by council may still require approval under the NV Act. 70 

Public health and safety 

In identifying leading practices in local government enforcement of public health 

and safety regulation, the PC reviewed a number of specific areas. These are 

outlined below. 

Public pools 

According to the PC, the regulatory burden of businesses subject to public 

swimming pool regulation would be reduced if local government based the 

frequency of swimming pool inspections on both the identified risk 

categorisation and prior compliance history of the business/pool. 71 

Skin penetration activities 

The PC notes that some councils use a risk-based approach to determine the 

frequency of inspections of skin penetration premises, taking into account the 

inherent risks of activities undertaken and the prior compliance history of the 

business. It believes there are merits in adopting such a system, if it was based 

on state or nationwide data and supported by a rigorous testing regime to ensure 

the robustness of the approach. 72 

Liquor Licensing 

Two levels of government are involved in regulating licensed premises in NSW. 

The NSW Office of Liquor, Gaming & Racing issues liquor licences, while local 

councils consider development applications for proposed licensed premises. 

68 Ibid, p 385. 

69 A PVP identifies areas which may be cleared, which vegetation must be kept as an offset and 

what the cleared land may be used for. 

70 Ibid, Box 11.7, p 410. 

71 Ibid, pp 370-371. 

72 Ibid, pp 380-381. 



The PC reports that businesses are better able to determine the viability of 

proposed licensed premises if they have clear information about likely 

operational requirements at the project inception stage. It consequently notes 

that some councils (eg, Byron Shire Council) have a clear and publicly available 

policy indicating the development conditions they will place on approvals for 

licensed premises and the criteria they have for supporting a liquor licence 

application to the relevant state regulator. 

The PC also states that prospective liquor licence applicants would benefit from 

state licensing regulators providing explicit advice to them on the approvals that 

they need to get from local government. 73 

Liquor licensing can also be a contentious area of regulation for the community. 

This is currently evident in relation to licensed premises in Kings Cross, Sydney. 

Food Safety 

Governments at all levels have invested significant resources in improving food 

safety regulation throughout Australia. While the divergent approaches 

implemented in different states or by individual councils impacts on the goal of 

nationally consistent food safety regulation, the variation provides a wealth of 

opportunities for identifying leading practices. The range of approaches include: 

 

 

 

 

 

Excluding businesses selling only negligible risk food from food safety 

regulation and enforcement (Victoria, Tasmania and Western Australia). 

Using risk and compliance history information to improve regulation of food 

businesses (used by a number of local governments in Australia). 

Using standardised forms (NSW Food Authority). 

Enhancing public transparency, through: 

– easily accessible information explaining the basis for policies and especially 

the reasons for differential treatment (NSW Food Authority) 

– publishing information on regulatory activities (fees and charges, 

frequency of inspections, etc) and the results of compliance activities (New 

South Wales, South Australia, Queensland and Western Australia report on 

some items, while some local governments provide all such information). 

Precluding the need for multiple registrations – Victoria, Queensland and 

Western Australia enable mobile food vendors who operate in multiple local 

government areas to be registered once. There is concern that some councils 

across Australia can require a single food business such as a supermarket, 

which has multiple departments (eg, bakery, deli, butcher and seafood 

departments), to register individual departments as separate food businesses. 

An approach similar to that used for mobile food vendors could be warranted 

to clarify what should be considered a single food business and what should 

be considered separate. 

73 Ibid, p 383. 



 

Food safety program templates and tools to automatically generate programs 

(Victoria) – ideally, this could be combined with ‘deemed to comply’ 

provisions (as recommended by South Australia) if the food business adhered 

to the procedures outlined in those templates. 74 

Parking and road transport 

The PC notes that, despite the introduction of national standards for parking and 

heavy vehicle road access, there is significant variation in their application by 

councils. It considers this can be a source of unnecessary regulatory burden for 

businesses operating across council jurisdictions. 

Parking 

According to the PC, an example of leading practice in parking regulation 

(exhibited by some councils in Tasmania, Queensland and the Northern 

Territory) is clear and accessible guidelines to allow prospective developers to 

evaluate their options with respect to the provision of parking, cash-in-lieu 

contributions (as substitutes for parking) and other offsets. 75 It notes more 

certainty would be provided to business if such guidelines clearly outlined: 

 

 

the circumstances in which cash-in-lieu contributions will be considered 

how contributions will be calculated 

how the money collected will be applied. 76 

Road transport 

Some councils restrict heavy vehicle access in a large proportion of their local 

roads, whereas others have little or no restrictions. According to the PC, these 

variations can impose significant costs on businesses operating across multiple 

jurisdictions. It consequently recommends that the National Heavy Vehicle 

Regulator seek to actively engage councils in the development of national heavy 

vehicle standards to moderate the inconsistent application of PBS-compliant 77 

vehicle access across local roads in different local government areas. 78 

74 Ibid, pp 330-338 and 348. 

75 Ibid, p 303-305. 

76 Ibid, p 305. 

77 The PBS (Performance Based Standards) is a nationally accepted classification system, which 

forms the basis for regulation of road access by heavy vehicles. There are 4 levels of 

classification, from single articulated vehicles to road trains. (Productivity Commission, 

Performance Benchmarking of Australian Business Regulation: The Role of Local Government as 

Regulator, July 2012, Vol 1, p 306). 

78 Ibid, pp 317-321. 



The PC also reports that there is a lack of local road mapping in some areas 

because council road managers have not identified and published PBS-compliant 

routes. This means that heavy vehicle operators may have to apply individually 

to councils for permission to use the road network, rather than being able to 

access the network through compliance with gazettal notices. 79 It therefore 

recommends that state governments or the National Heavy Vehicle Regulator 

consider providing support, including technical and financial resources, to 

councils to identify and gazette suitable roads according to the PBS classification. 

This would enable heavy vehicle operators to avoid having to apply for several 

permits to access local roads on specific routes. 


21 What are examples of best practice enforcement approaches being used by 

NSW councils? Could these be applied more widely? 

22 What compliance and enforcement approaches used in other jurisdictions should 

be applied in NSW? 

23 Should any of the leading practices identified by the Productivity Commission in 

its 2012 Performance Benchmarking of Australian Business Regulation: The 

Role of Local Government as Regulator be implemented in NSW? 

24 What specific reforms to local government compliance and enforcement 

activities would reduce unnecessary regulatory burdens to business and the 

community? 

25 What impediments prevent councils from undertaking their compliance and 

enforcement activities more efficiently? How can these impediments be 

removed? 

79 Ibid, p 318. 


4 Estimating the impacts of recommended reforms 


The ToR for this review require us to consider and estimate the impacts of our 

recommended reforms on business (especially small business), government and 

the broader community. This chapter explains how we propose to do this. It 

discusses how we will ensure our recommendations produce net benefits to 

NSW. It also outlines how we plan to estimate the reduction in regulatory 

burden to business and the community and the impact of our recommended 

reforms on government. 

In line with best practice regulatory principles, our analysis of potential impacts 

will be proportionate to the expected impacts of reform and informed by 

stakeholder consultation. 80 

4.1 Ensuring our recommendations produce net benefits to NSW 

The ToR for this review requires us to provide recommendations that produce 

net benefits to NSW. This means that we will have to ensure that the value of 

regulatory reductions as a result of our recommendations are greater than any 

costs they impose on society. A reform that would merely shift costs from one 

group within the community to another (eg, from business to government) 

would not produce a net benefit to NSW. Similarly, a reform that would reduce 

costs to business, but impose costs on the community that are larger than these 

reduced business costs (eg, through adverse impacts on the environment, 

amenity, public health and safety, etc) would not produce a net benefit to NSW. 

In developing our recommendations, we will therefore consider all potential 

costs and benefits, not just reduced regulatory costs to regulated businesses or 

individuals. 

We are also unlikely to examine or critique the underling policy objectives of 

existing regulations. We will generally take these objectives as given. Rather, the 

aim is to determine ways in which the objectives of regulation can be achieved at 

least cost to society. 

80 IPART, Investigation into the burden of regulation in NSW and improving regulatory efficiency, 

October 2006, p 58; and NSW Better Regulation Office (BRO), Guidelines for estimating savings 

under the red tape reduction target, February 2012, p 10. 



4.2 Estimating reduced regulatory costs from our recommended 

reforms 

Regulatory reform can reduce or eliminate direct regulatory costs to the 

regulated group of businesses and/or individuals. Depending on the scope of 

the reform, it can also have indirect impacts – eg, flow-on impacts on other 

parties of sectors of the economy. Furthermore, reform can re-distribute 

resources and/or costs (eg, from one business group or industry to another, or 

from business to government, or from one level of government to another, or 

from one group within the community to another). 

For this review, we will: 

 

estimate the direct cost savings as a result of our recommended reforms 

consider and, where possible, evaluate indirect impacts of our 

recommendations 

 

consider the distributional impacts of our recommended reforms. 

4.2.1 Estimating direct cost savings from regulatory reform 

The purpose of our review is to make recommendations that improve the 

efficiency of local government compliance and enforcement activities. These 

recommendations will be aimed at reducing unnecessary regulatory (or ‘red 

tape’) costs to businesses and individuals. As outlined in Chapter 3, these costs 

include: 

 

 

 

 

administrative costs 

substantive compliance costs 

fees and charges 

delay costs. 

The sections below discuss, in general terms, how we propose to estimate the 

reductions in these costs as a result of our recommended reforms. This is based 

on methodologies outlined in BRO’s 2012 Guidelines for estimating savings under 

the red tape reduction target. 

Although, the methodologies for estimating cost savings are relatively simple, 

the challenge is obtaining the necessary data. For this will be largely reliant on 

the input of stakeholders, including businesses, local councils, NSW Government 

agencies and the community. We hope to receive this via submissions to this 

paper, as well as through our own research and follow-up consultation with 

stakeholders. 



Administrative costs 

Administrative costs are incurred when demonstrating compliance with a 

regulation (eg, by providing information to a regulator) and through 

information-related activities (eg, completing and lodging forms and 

applications). 81 

Administrative costs often equate to the time taken to provide a regulator with 

necessary paperwork multiplied by the value of this time. They may also include 

the cost of purchasing expert advice (eg, technical or legal experts) to assist in 

providing necessary information to regulators. 

BRO notes that administrative cost savings to business and the community may 

be realised through reforms which: 

 

 

move from paper to electronic applications or information collection 

consolidate separate administrative tasks into a single task 

place the administrative burden on the regulator. 82 

To estimate administrative cost savings of a recommended reform, we will seek 

to: 

 

 

 

identify the task(s) removed if the reform were to be implemented – eg, 

removal of a requirement to report information to a regulator 

place a time and dollar value on the removed task – eg, removal of the 

reporting requirement may save regulated businesses, on average, 7 hours of 

staff time per annum 83 , and the value of this would be equal to 7 x the relevant 

hourly wage rate x an employee on-cost multiplier 

multiply the value of the removed task by the relevant population of 

businesses or individuals affected – eg, if removal of the reporting 

requirement saves regulated businesses, on average, $400 per annum and 

there are 100 regulated businesses, then the annual cost saving of the removed 

task is $40,000. 

BRO notes that effective consultation should assist the measurement of 

administrative cost savings. This is because business, not-for-profit 

organisations, government departments, and individuals can provide 

information on appropriate wage rates and the time it takes to perform the tasks 

necessary to comply with regulation or interact with regulators. 84 

81 NSW Better Regulation Office, Guidelines for estimating savings under the red tape reduction target, 

February 2012, p 12. 

82 Ibid. 

83 That is, 7 hours of a ‘Full-Time Equivalent’ (FTE) employee. 

84 Ibid. 



Substantive compliance costs 

Substantive compliance costs primarily relate to changes in capital and operating 

costs required to comply with regulation or interact with regulators. They can 

include, for example, costs of buying and maintaining new equipment or 

undertaking specific training in order to comply with regulatory requirements. 

According to BRO, compliance cost savings to business and the community may 

occur where: 

 

 

 

certain equipment is no longer required to be purchased 

the government provides the training required to meet new standards 

the government removes restrictions or requirements on particular goods sold 

in an industry – eg, by moving from mandatory product standards to product 

efficiency labelling. 85 

To estimate substantive compliance cost savings of a recommended reform, we 

will seek to: 

 

 

 

Identify the requirement(s) removed if the reform were to be implemented 

– eg, a regulatory reform could remove the need to use a particular piece of 

equipment and certain production inputs such as energy, chemicals, labour, 

etc. 

Place a quantity and dollar value on the removed requirement(s) – eg, the 

capital equipment may cost $100,000, while the materials (or operating cost 

items) may cost an average of $30,000 per annum, per regulated business. To 

convert the capital cost to an annual figure, BRO recommends using the 

straight line depreciation method. 86 That is, if the average lifespan of the 

equipment is 10 years, the annual depreciation cost is $10,000 (ie, 

$100,000/10). Costs of avoided or reduced operating cost items can be 

estimated by multiplying the quantity of inputs reduced by the market price 

of these inputs. 

Multiply the average cost saving per regulated entity by the relevant 

population of businesses or individuals affected – eg, if the average annual 

cost saving per business is $40,000 and there are 100 regulated businesses 

affected, the total annual cost saving is $4 million. 

BRO notes that estimates of the amount of equipment or training costs that will 

be saved from a regulatory reform can be obtained through a combination of 

consulting with business and research. 87 

85 Ibid, p 13. 

86 Ibid, p 14. 

87 Ibid. 



Fees and charges 

Fees and charges include licence fees, permit fees, registration fees, and other fees 

relating to the administration of regulation. Ideally, regulatory administration 

fees and charges should be set to allow regulators to recover the efficient costs 

they incur in administering and enforcing regulations. 

To estimate fee and charge cost savings of a recommended reform, we will seek 

to: 

 

 

 

identify the fees or charges reduced or eliminated if the reform were to be 

implemented – eg, a licence fee may be reduced to reflect a more targeted and 

efficient enforcement regime 

place a dollar value on the amended fee or charge – eg, the annual licence fee 

may be reduced from $200 to $20, which equates to a reduction of $180 per 

licence 

multiply the value of the reduced fee or charge by the relevant population 

of businesses or individuals affected – eg, if 1,000 businesses are subject to 

the annual licence fee, the annual value of the reduction is $180,000 (1,000 x 

$180). 

According to BRO, reductions in fees and charges should be the easiest cost 

savings to calculate. This is because they are known to regulators, who are also 

likely to have access to data on the number of individuals, businesses and notfor-profit 

organisations that would be liable for the fee or charge. 88 

Delay costs 

Delay costs result from delays in regulatory processes – eg, delays in receiving 

approval to undertake a certain activity. Delay costs generally include the cost of 

holding assets (land, capital, labour). 

BRO observes that delay costs may be reduced where: 

 

 

 

regulators are required to process applications within a set period 

the quantity of material required for an application is reduced, allowing faster 

processing 

there is a significant change to an approval process – eg, the process for 

handling objections. 89 

88 Ibid, p 15. 

89 Ibid, p 16. 



To estimate delay cost savings of a recommended reform, we will seek to: 

 

 

 

Identify the delay reduced or eliminated if the reform were to be 

implemented – eg, a reduction in the delay in processing development 

approvals (DAs) 

Place a quantity and dollar value on the reduced delay – if the average DA 

processing time is reduced from 50 days to 30 days, there is a saving of 

20 days. If the average value of a development for which approval is sought is 

$1 million and the cost of capital (of interest rate) is 7%, the value of this saved 

20 days equates to $3,836 ((20 days/365 days) x $1 million x 7% = $3,836). 

Multiply the value of the reduced delay by the relevant population of 

businesses or individuals affected – eg, if an average of 1,000 businesses or 

individuals per annum benefit from the reduced delay, the total annual cost 

saving is $3.8 million (which equals $3,836 x 1,000). 

Box 4.1 below outlines the results of some recent surveys of business on their 

regulatory compliance costs. The surveys by the PC and VCEC related 

specifically to local government as a regulator. 



Recent surveys of Australian business on regulation and its costs 

Australian Industry Group National CEO Survey: Business Regulation (2011) 

Around 320 CEOs were surveyed regarding their experience with business regulatory 

regimes across Australia. The survey found that the average business spends close to 

4% of total annual expenditures on complying with regulation. It also found that larger 

(100 employees or more) businesses spend relatively more time on compliance related 

activities (27.2 hours per week) compared to medium (16.8 hours) or small businesses 

(7.3 hours). 

NSW Business Chamber Red Tape Survey (2011) 

Most of the 581 businesses surveyed were small to medium size (less than 50 

employees). The survey found that around 39% of these businesses spend more than 5 

hours per week on compliance activities. 

Productivity Commission National Survey of Business Perceptions (local 

government) (2012) 

The PC engaged Sensis to conduct a survey of 1,913 small and medium sized 

businesses across Australia. It found that 60% of these businesses had regulatory 

dealings with local government over the last 3 years. 83% of businesses said they were 

treated fairly in their regulatory dealings with local government, but 43% claim that the 

time and effort required to comply with regulations is excessive. More than one-third 

believe there is significant duplication with state government regulation. 

Victorian Competition and Efficiency Commission (VCEC) Business Perception 

Survey about Local Government Regulation (2010) 

Roy Morgan Research undertook a survey of 1,917 Victorian businesses on behalf of 

the VCEC. Of these businesses, just one-third had regulatory dealings with the local 

government in the last 3 years. Most interaction was in planning and land use, and 

building and construction regulations. 68% of Victorian businesses felt they were 

treated fairly in terms of regulation, but 30% stated there was too much duplication 

between state and local regulation. 

Sources: Australian Industry Group, National CEO Survey: Business Regulation, 2011. NSW Business 

Chamber, Red Tape Survey, September 2011. Productivity Commission, Performance Benchmarking of 

Australian Business Regulation: The Role of Local Government as Regulator, July 2012, Vol 1, p 228-238. 

VCEC, Local government for a better Victoria: An inquiry into streamlining local government regulation, August 

2010, pp 40 – 46. 

4.2.2 Considering indirect impacts of regulatory reform 

The section above discussed how we would seek to estimate direct cost savings 

from regulatory reform – ie, those cost savings that can be counted towards the 

NSW Government’s red tape reduction target of $750 million by June 2015. 



It is also important, however, for us to consider potential indirect impacts of our 

recommendations. Indirect impacts from regulatory reform may be wideranging 

and will likely be considerably more difficult to measure and analyse 

than direct impacts. Examples of indirect impacts include: 

 

 

 

 

 

improved regulatory outcomes (eg, better environmental amenity, reduced 

adverse health outcomes, etc) 

improved incentives for investment and innovation 

lower prices, improved quality and wider range of goods and services 

higher workforce participation, employment and economic growth 

enhanced competition or reduced barriers to entry. 

Economy-wide or indirect impacts of regulatory reform can be modelled using 

equilibrium modelling or econometric analysis (see Box 4.2). 

Like all models, equilibrium modelling is data-based and assumption driven. 

This means if the data are not reliable or the assumptions do not adequately 

capture the underlying relationships, the modelling results will not reflect the 

real-world effects of reforms. 90 Equilibrium modelling is best suited to large 

scale, economy-wide reform. The PC has used general equilibrium modelling on 

several occasions to assess COAG reforms. 

Econometric analysis can model and test links between regulatory reforms and 

dependent variables. Results are, however, influenced by assumptions in the 

modelling framework. Further, econometric analysis is unable to be used to 

estimate dynamic and flow-on effects of reforms beyond the dependent 

variable. 91 There is also a need for reliable and robust time series or panel data. 

Given the data requirements of equilibrium modelling and econometric analysis, 

we are unlikely to use them for this review. We will, however, seek to identify 

and qualitatively assess the potential indirect impacts of our recommended 

reforms. 

90 Productivity Commission, Identifying and evaluating regulation reforms, December 2011, 

Appendix J, p 32. 

91 Ibid, pp 20-21 & p 24. 



Box 4.2 

Methods for assessing economy-wide regulatory impacts 

Equilibrium modelling 

Partial equilibrium models typically estimate the impact of a reform on a specific industry. 

For example, changes to the industry’s inputs, outputs or profitability over time. 

General equilibrium models – which describe the main relationships between inputs and 

outputs in the economy – then estimate how these changes flow on to other industries 

and sectors of the economy. 

Econometric analysis 

Econometrics is a set of statistical tools that can be used to determine whether regulatory 

reforms affect variables of interest. For example, the US Small Business Administration 

employed a regression analysis to examine what impact reductions in the regulatory 

burden (or changes in the ‘Regulatory Quality Index’) would have on a country’s 

economic activity (as measured by GDP per capita). 

Sources: Productivity Commission, Identifying and evaluating regulation reforms, 2011, p xxxviii. Crain NV & 

Crain MW, The Impact of Regulatory Costs on Small Firms, report for the Small Business Administration Office 

of Advocacy, September 2010, http://archive.sba.gov/advo/research/rs371tot.pdf (accessed 11 September 

2012). 

4.2.3 Considering the distributional impacts of our recommended reforms 

A further consideration is that changes to regulations or regulatory practices will 

likely have differing impacts on different sectors of the community. For example, 

the burden of regulation is not always uniformly distributed among small, 

medium and large businesses. 

The Australian Chamber of Commerce and Industry (ACCI) has argued that 

small and medium sized enterprises can bear a disproportionate burden of the 

costs of meeting regulatory obligations, “primarily due to the differential impact 

of the costs involved with improvements and administrative requirements 

resulting from the fixed-cost nature of compliance”. 92 The US Small Business 

Administration also found that regulatory cost per employee was at least 36% 

higher in small businesses (


Moreover, different size businesses may have different objectives, which 

influences what they want from a regulatory regime. For example, larger 

businesses may want outcomes based approach, with flexibility, whereas smaller 

businesses may just want to be told exactly what they need to do to comply. 

In developing our recommendations, we will consider potential impacts on 

different segments of the community, including business (particularly small 

business), local government, State Government and the broader community. 

4.3 Estimating the budget implications for government 

The ToR requires us to provide estimates of the budget implications for 

government from implementation of our recommended reforms. 

We will therefore consider the potential impact of reforms on both government 

costs and revenues. In doing so, we will consult directly with a selection of 

potentially affected councils and/or State government agencies. 

As discussed previously, we are required to provide recommendations that 

would reduce red tape to business and the community, but also produce net 

benefits for NSW. 


26 Do you have information that will assist us in estimating costs of specific 

regulatory burdens arising from local government compliance and enforcement 

activities? 

27 Do you have information that will assist us in estimating cost savings from 

potential reforms to local government compliance and enforcement activities? 

28 Do you wish to comment on any other issues relevant to this review? 


A Terms of Reference

Regulation Review - IPART - NSW Government

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