An inquiry into the administration of Commonwealth regulations examines how Commonwealth entities assess compliance risk, inform compliance and enforcement strategies, and identify and address incidences of non-compliance with rules and regulations. Performance and evaluation frameworks for compliance with Commonwealth regulations are also assessed. Five Auditor-General reports formed the basis of the inquiry. The report has been organised around key areas of regulator activity and provides nine recommendations.

• Governance – how entities collect, manage and use data; whether entities take a risk-based approach to compliance; the existence of policies and procedures; and statements of expectation and intent.
• Practice – how entities identify and address incidences of non-compliance with the law; to what extent entities use their regulatory powers; and the application of investigation standards.
• Performance – how entities evaluate the performance of their regulatory functions, including whether meaningful targets are established.
• Policy guidance – the nature of the policy guidance produced by the Department of Finance, and whether it addresses the issues raised in the five audits.

Recommendations

1. The Department of Finance develops for entities with regulatory responsibilities, minimum requirements for data capability.
2. The Australian National Audit Office undertakes a follow-up performance audit of the Department of Industry, Science and Resources’ implementation of the recommendations of Auditor General Report 2023–24 Trade Measurement Compliance Activities.
3. The Department of Home Affairs provides an update every six months on its material progress towards reporting on whether it has used its regulatory powers.
4. The Department of Industry, Science and Resources provides the detailed analysis it relies upon to be certain it is comprehensively regulating its target population.
5. The Department of Industry, Science and Resources provides data on the actual scope of activities undertaken by inspectors during trader audits in each of the years from 2017–18 to the present.
6. The Department of Industry, Science and Resources provides in de-identified format, a report detailing the regulatory action it has taken when an infringement notice has been issued but non-compliance is detected during a follow-up audit.
7. The Department of Finance updates Resource Management Guide 131: Developing performance measures to include contemporary examples and provide clear instruction to entities as to what constitutes best practice performance measures.
8. The Department of Finance develops an approach, including robust metrics, to provide reasonable assurance that the policy framework it administers with regard to regulatory policy, practice and performance is effective in ensuring regulatory systems remain fit-for-purpose.
9. The Department of Finance updates the requirements for the Regulator Stocktake to require each entity with regulatory functions to publish a Regulator Statement, on a common template.