Public Governance, Performance and Accountability (Charging for Regulatory Activities) Order 2017

Approved regulatory charging activity is the cornerstone of the Order. For an activity to qualify, two conditions must be satisfied: first, the activity must have Australian Government policy approval (defined as Cabinet or Prime Ministerial approval to provide the activity to the non‑government sector and charge on a full or partial cost‑recovery basis), and second, there must be statutory authority to charge for that activity. Without both elements, an entity on the list simply cannot charge. The definition is narrow; it does not cover activities provided to other government bodies or purely internal services. Notes in the Order indicate that such activities are “generally regulatory activities where the Government is seeking to control or influence behaviour, manage risk or protect the community.” This suggests the policy targets traditional regulation licensing, inspection, certification, and enforcement rather than purely commercial services.

Cost recovery implementation statement (CRIS) is the key accountability document. Section 8 prescribes eleven categories of content: background, description of stakeholders, details of policy approval (including public announcements), the specific law conferring charging authority, explanation of the costing model, charge design and linkage to outputs, charging risk rating, stakeholder engagement strategy with summaries of consultations, financial estimates for the current year and three forward years, details of financial and non‑financial performance, and key forward dates including the next portfolio charging review. The CRIS must be certified by the accountable authority before consideration by the responsible Minister, and must be published on the entity’s website before charging starts (unless a high charging risk rating triggers the Finance Minister’s veto power). The CRIS is thus a public contract between the entity, the Government, and the users; but because it is a policy instrument rather than a statutory licence, users cannot enforce its terms directly.

Charging risk rating is a concept introduced but not defined at length in the Order. It is described as “the risk rating given to the activity as part of the process of obtaining Australian Government policy approval for the activity.” The Order does not specify the criteria for assigning the rating, only that it affects publication of the CRIS. High‑rated activities require the Finance Minister’s written agreement before publication, suggesting heightened scrutiny of activities that might be controversial, complex, or prone to public backlash. This is a soft control, leaving the substance of the rating to internal government processes.

Portfolio charging review is a mandatory, at least quinquennial review by a Department of State of charging activities within its Minister’s portfolio. The Order does not set out the scope or methodology of such reviews. They are likely intended to capture whether the entity’s charging activities continue to align with government policy, whether cost recovery is appropriate, and whether new activities should be added. However, because the review is conducted by the department rather than an independent body, there is potential for conflict of interest: the department may be both the policy overseer and the entity’s portfolio steward. The Order does not require the review to be published or to be binding on the entity.

Costing model is defined as a description of how the activity is broken into outputs and processes, and how those outputs and processes are costed, including cost drivers and assumptions. This is the financial backbone of the CRIS. However, the Order does not prescribe any particular costing methodology (e.g., activity‑based costing, full cost allocation, marginal costing), leaving entities with some discretion. This discretion can lead to inconsistent approaches across the nine entities, reducing comparability for users who may be subject to charges from multiple entities (e.g., a business regulated by both CASA and AMSA).

The Order directly affects nine corporate Commonwealth entities listed in Schedule 1: the Australian Grape and Wine Authority, Australian Maritime Safety Authority, Australian Pesticides and Veterinary Medicines Authority, Civil Aviation Safety Authority, Comcare, Director of National Parks, Food Standards Australia New Zealand, National Offshore Petroleum Safety and Environmental Management Authority, and Sydney Harbour Federation Trust. These are the only entities to which the policy in sections 7 and 8 is applied. The Order does not purport to bind other Commonwealth entities, though the Explanatory Memorandum (not provided in the source but referenced in the Order) would indicate that other entities may be subject to separate charging frameworks. Each of these nine entities is a corporate Commonwealth entity under the PGPA Act, meaning they have separate legal personality and their own accountable authority (typically a board or chief executive). The Order constrains their ability to set charges independently, requiring central policy approval for any new charging activity or changes to existing charges.

Indirectly, the Order affects all users who pay charges to these entities. Users include businesses (grape growers, wine exporters, pesticide manufacturers, veterinary product suppliers, airlines, airports, general aviation operators, employers covered by Comcare, national park visitors or concession holders, food manufacturers, offshore petroleum operators, and users of the Sydney Harbour Federation Trust). Because these entities often hold monopoly or near‑monopoly positions in their regulatory space (e.g., CASA for civil aviation safety regulation, NOPSEMA for offshore petroleum safety), users have no alternative supplier. The cost cannot be avoided if the user wishes to participate in the regulated activity. Consequently, any increase in charges flows directly to the prices faced by businesses and ultimately consumers. The Order does not create any statutory right for users to challenge the quantum of charges or the efficiency of the activity; users can only participate in the stakeholder engagement process required in the CRIS. That engagement must include a summary of who was consulted, stakeholders’ views, and how those views were considered, but there is no requirement for the entity to adopt any particular outcome.

Also affected are the responsible Ministers for each entity (since the CRIS must be considered by them before charging begins) and the Finance Minister (who must agree before a high‑risk CRIS is published). The Order therefore sets up a tripartite relationship: the accountable authority, the responsible Minister, and the Finance Minister. The responsible Minister may exercise influence over the entity’s charging strategy, but the Order does not give either Minister a direct veto over individual charges (except via the high‑risk publication gate).

The Order imposes duties only on the accountable authorities of the listed corporate Commonwealth entities. The primary duty, under section 7(1), is to charge only for approved regulatory charging activities - that is, activities that have both Australian Government policy approval and statutory authority. This is a negative duty: an entity must not charge for any other activity. It is also a continuing duty, because entities must ensure that each charging activity remains approved; if policy approval lapses or statutory authority is repealed, the entity must cease charging.

The second set of duties under section 7(2) attaches to each approved regulatory charging activity. The entity must ensure that expenses and revenue balance out over a reasonable period (for full cost recovery, the whole activity; for partial cost recovery, the portion of costs to be recovered). The term “reasonable period” is vague; the Order gives the example of “the business cycle of the activity”, but does not define maxima or minima. This vagueness creates compliance risk: an entity that accumulates large surpluses in the short term may be challenged for not rebating or reducing charges, while an entity that runs deficits may be pressed to raise charges. The duty to “ensure” balancing is a duty of result, not merely of reasonable effort. That places pressure on entities to design charge structures that can adapt to cost fluctuations.

The entity must also develop and maintain an up‑to‑date, publicly available CRIS meeting section 8’s requirements. This is a procedural duty: the CRIS must be certified by the accountable authority before consideration by the responsible Minister, and must be published before charging starts. If the charging risk rating is high, the entity cannot publish without the Finance Minister’s written agreement. The entity must also measure, assess and document financial and non‑financial performance. The Order does not prescribe specific performance indicators, leaving entities to devise their own (subject to oversight by the responsible Minister and Finance Minister). This flexibility is a double‑edged sword: it allows tailoring but also opens the door to self‑serving metrics that mask inefficiency.

Rights: The Order does not confer any enforceable rights on users or other stakeholders. Users do not have a statutory right to challenge charges, to force a change in the CRIS, or to compel the entity to refund over‑recoveries. The stakeholder engagement strategy is a requirement, but it is an input requirement, not a right to be heard that is legally enforceable. The only possible right is internal to the Government: the responsible Minister has the right to consider the CRIS before charging commences, but the Order does not state that the Minister must approve it. The Finance Minister has a right to withhold agreement to publication of a high‑risk CRIS, but again no statutory right to veto the underlying charges. So the duties are obligations on the entity, enforceable through ministerial directions and PGPA Act sanctions, but not through private rights of action.

The Order itself creates no civil or criminal penalties. It is a legislative instrument made under subsection 22(1) of the PGPA Act, which empowers the Finance Minister to give directions about “the performance of functions” of corporate Commonwealth entities. Contravening a direction under section 22 is not itself an offence; rather, it triggers consequences under the PGPA framework. The accountable authority of a corporate Commonwealth entity who fails to comply with the Order may be subject to directions from the responsible Minister under the entity’s enabling legislation or under the PGPA Act (e.g., section 47, which allows the responsible Minister to give directions to the entity in certain circumstances). The Finance Minister may also issue further directions under section 22, or may initiate a performance audit by the Auditor‑General. The most serious consequence is that a non‑compliant charging activity could be challenged as lacking lawful authority. For example, if an entity charges for an activity without the necessary policy approval or statutory authority, the charge may be recoverable by the payer as an unlawful exaction (a common law cause of action for money had and received). This is a powerful, if indirect, enforcement mechanism: a user could sue for a refund of charges levied in breach of the Order, and the entity’s defence would depend on establishing compliance with the Order.

The Order also mandates that the CRIS be certified by the accountable authority and considered by the responsible Minister. A false certification or a misleading CRIS could lead to personal liability for the accountable authority under section 29 of the PGPA Act (duty to govern the entity properly) or under general criminal law for providing false information to the Commonwealth. However, the Order does not specify any monitoring or audit regime; it relies on the entity’s own self‑assessment and the portfolio charging review every five years. That longevity of review cycles means non‑compliance could persist for years before detection. The Enforcement pyramid under the PGPA Act ranges from informal guidance to removal of the accountable authority, but the Order itself does not calibrate that pyramid. In practice, for the nine entities, enforcement is likely to be internal and managerial, driven by portfolio departments and Finance rather than by courts.

The Order sits under the PGPA Act 2013, specifically subsection 22(1), which gives the Finance Minister power to give directions about the performance of functions of corporate Commonwealth entities. The Order does not repeal or override any other law; it imposes additional conditions on the exercise of existing statutory charging powers. For each entity listed in Schedule 1, specific enabling legislation provides the statutory authority to charge. For example, the Civil Aviation Safety Authority charges under the Civil Aviation Act 1988 and regulations; the National Offshore Petroleum Safety and Environmental Management Authority charges under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The Order does not confer new charging powers; it only restricts the use of those powers to activities with policy approval. Therefore, a charge that is otherwise valid under the enabling Act may be invalid if the activity does not meet the Order’s definition of an approved regulatory charging activity. This creates a layered test: first, does the enabling Act authorise the charge? Second, does the activity have Cabinet or Prime Ministerial approval? Third, is there a current CRIS that meets section 8? A failure at any step could render the charge invalid.

The Order interacts with the Australian Government Charging Framework, referenced in notes to sections 7 and 8. That framework is a non‑legislative policy document (available on the Finance Department website) that provides further detail on how to apply the policy. The Order does not incorporate the framework by reference, so the framework is not mandatory. However, an entity that departs from the framework may face criticism from Finance or from a portfolio charging review. The Order does not interact with the Competition and Consumer Act 2010 or with state charging laws, because it only applies to Commonwealth entities. It may intersect with the principle of legality: because the Order restricts rather than enables charging, it does not trench on common law rights, but if a charge is held to be invalid for want of policy approval, the entity could be liable for restitution.

The Order was made on 16 August 2017 and registered on 24 August 2017. The commencement table indicates that the whole instrument commenced on the later of 1 July 2017 (retrospective, for activities starting before registration) and the day after registration, which was 24 August 2017. Since that initial registration, the Order does not appear to have been amended. The text as provided contains no amendment history, no footnotes about deleted paragraphs, and no list of amending instruments. Schedule 1 still names the original nine entities; notably, the Australian Grape and Wine Authority is listed, but that entity has since been renamed (or replaced by) Wine Australia under the Wine Australia Act 2013. The Order has not been updated to reflect that change, which could create a technical gap: the policy formally applies to an entity that may no longer exist under that exact name. Similarly, the Sydney Harbour Federation Trust has had its sunset date extended, but the Order still lists it. The absence of amendment history suggests that the Order has been effectively forgotten by the Government, which imposes continued compliance risk on entities that may have changed their names or functions without corresponding updates to Schedule 1. Practitioners should verify whether a consolidated version exists that includes any later amendments not reflected in the source text; but based on the source, the Order is unamended.

The source instrument contains no litigation history, and publicly reported decisions do not reveal any case directly concerning this Order. The Order is a policy directive, not a statute that directly creates rights or liabilities; therefore, it is unlikely to have been litigated on its own. However, it may have been raised in litigation concerning the validity of charges imposed by the listed entities. For example, if an entity attempted to charge for an activity without policy approval, a judicial review applicant might argue the charge is invalid because the entity failed to comply with the Order. No such case is noted in the source. The most likely context would be in proceedings challenging CASA’s fees or AMSA’s levies, where the Order’s requirements could be a secondary argument. Given the Order has been in force since August 2017 and was only applied to nine entities, its obscurity may explain the lack of litigation. Also, the Order does not create a private right of action; a user would need to rely on an administrative law ground (e.g., ultra vires, failure to consider a relevant matter) to challenge a charge, with the Order forming part of the legal framework relevant to the charge’s validity. The absence of reported cases could mean either that entities have complied, that challenges have been resolved without published judgments, or that the Order has not been considered justiciable. The risk of litigation remains live, especially if an entity changes its charges without updating its CRIS or obtaining fresh policy approval.

The Order contains several traps for unwary entities and users. First, the definition of “approved regulatory charging activity” requires both Australian Government policy approval and statutory authority. Policy approval is not the same as a simple Ministerial endorsement; it must be Cabinet or Prime Ministerial approval. If the entity has only internal board approval or a letter from its responsible Minister, that does not satisfy the Order. An entity that thought it had “policy approval” from its portfolio department might be charging unlawfully. Second, the CRIS must be published before the entity starts charging. An entity that begins charging on 1 July but publishes the CRIS on 15 July has breached section 8(2)(b) for the period between those dates, potentially rendering the charges invalid for that period. Third, the high‑risk publication gate (section 8(3)) means that an entity with a high risk rating cannot simply publish its CRIS; it must obtain the Finance Minister’s written agreement. If the Finance Minister refuses, the entity cannot charge at all, because it cannot publish the CRIS and thus cannot satisfy the condition for charging. This creates a potential complete block on cost recovery for high‑risk activities, forcing the entity to seek a different structure or to absorb the costs from its appropriation. Fourth, the portfolio charging review every five years is a mandatory review, but the Order does not specify what happens if the review is not done. The entity may continue charging in the absence of a review, but accountability standards under the PGPA Act could be breached. Fifth, the requirement that expenses and revenue “balance out over a reasonable period” is not defined. An entity might accumulate a large surplus in year one and a deficit in year two, but if the surplus persists beyond the “reasonable period”, the entity could be accused of overtaxing users. There is no safe harbour. Sixth, the Order applies only to the activities of the nine listed entities, but these entities often have multiple activities. An entity might have some activities that are “approved regulatory charging activities” and others that are not. It must be careful not to charge for the latter. Seventh, the Order does not expressly require that charges be set at a level that is efficient or reflects the value of the service; it only requires cost recovery. This can incentivise entities to inflate costs (by, for example, expanding staff or excessive overhead allocation) because there is no external efficiency constraint. The CRIS’s costing model is the only mechanism for cost scrutiny, but it is self‑audited. Eighth, the Order does not provide for independent dispute resolution. A user who believes they are being overcharged has no direct recourse under the Order; they must rely on the general law or political pressure. Ninth, the list in Schedule 1 may not be exhaustive of entities that should be subject to such a policy; other corporate Commonwealth entities with regulatory charging activities are not bound by the Order, potentially creating an uneven playing field. For example, the Australian Communications and Media Authority is not listed. This arbitrariness could be constitutionally problematic, though unlikely.

Compliance by a listed corporate Commonwealth entity involves several ongoing steps. Step 1: Inventory of charging activities. The entity must identify every activity it performs for the non‑government sector that involves a charge. For each activity, it must determine whether there is statutory authority to charge and whether it has obtained Australian Government policy approval (Cabinet or Prime Ministerial approval) for both the provision of the activity and the charging on a cost recovery basis. Activities lacking either ingredient cannot be charged for; the entity must either stop charging or seek new policy approval.

Step 2: Determine the cost recovery basis. The policy approval will specify whether cost recovery is full or partial, and if partial, the percentage or portion of costs to be recovered. The entity must design its charges accordingly. It must also establish a costing model that breaks the activity into outputs and processes and allocates costs with clear assumptions and cost drivers. The costing model must be documented and form the basis of the CRIS.

Step 3: Develop the cost recovery implementation statement (CRIS). Using the requirements in section 8(1), the entity must prepare a CRIS covering all 11 items: background, stakeholders, policy approval details, statutory authority, costing model, charge design, risk rating, stakeholder engagement, financial estimates, performance details, and forward dates. The statement must be certified by the accountable authority (usually the entity head or board) before being considered by the responsible Minister. The responsible Minister’s role is not defined in the Order; the entity should seek formal confirmation that the Minister has considered the CRIS.

Step 4: Determine the charging risk rating. If the rating (assigned during policy approval) is high, the entity must obtain the Finance Minister’s written agreement before publishing the CRIS. Publication must occur before the entity starts charging for the activity. The entity should maintain a record of the Finance Minister’s agreement.

Step 5: Publish and maintain. The CRIS must be kept up‑to‑date. Any material change in the activity, costs, or statutory basis should trigger an update to the CRIS and re‑certification. The entity must also continuously measure and document financial and non‑financial performance. This includes comparing actual revenue and expenses against the CRIS forecasts and ensuring that, over a reasonable period, the balances align with the approved cost‑recovery basis. If actual results deviate significantly, the entity should adjust charges or the CRIS to bring them back into alignment.

Step 6: Stakeholder engagement. The CRIS must include a stakeholder engagement strategy. The entity should conduct regular consultation rounds, documenting who was consulted, when, their views, and how those views were considered. This is not a one‑off; the Order implies ongoing engagement, particularly when charges are reviewed.

Step 7: Portfolio charging reviews. The entity must cooperate with the relevant Department of State in conducting a portfolio charging review at least every five years. The entity should maintain records of the review outcomes and any resulting changes to charges or the CRIS.

Step 8: Monitor changes to Schedule 1. The entity must check whether it still appears on the list (in its current name) and whether any new entities have been added that might be subject to similar policies.

Step 9: Record‑keeping. Because the Order does not create a private right of action but charges could be challenged administratively, the entity should retain all evidence of policy approval, statutory authority, CRIS versions, certifications, Ministerial considerations, Finance Minister agreements, consultation records, and financial reconciliations. Such records are essential if a user challenges the validity of a charge.

Practically, the compliance burden is high for smaller entities like the Australian Grape and Wine Authority (no longer separately exists) or the Sydney Harbour Federation Trust, which may have limited resources. The entity must ensure that its compliance team understands the distinction between policy approval and statutory authority, and that there is a clear audit trail for each charging activity. Failure to comply exposes the entity to legal challenge, potential refund obligations, and ministerial sanctions. The safest approach is to treat the Order as a standing requirement and to review all charging activities at least annually.