Regulation Review - IPART - NSW Government

2 Local government compliance and enforcement
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.
26 IPART Regulation Review