Image: Background BACKGROUND

On 4th December, 2002, the Minister for Finance and Administration announced the introduction of an Australian cost recovery policy to "heighten the transparency, consistency and accountability of cost recovery by government agencies". Developed in response to a review by the Productivity Commission into cost recovery by Australian government agencies, the policy requires that fees and charges set by government agencies reflect the costs of providing the product or service. The policy guidelines are included in the publication: Australian Government Cost Recovery Guidelines, July 2005 (Guidelines).

The Guidelines require that information agencies define (and continuously update) a “basic” set of information products which will be provided free to the community. The Guidelines provide a series of “guides” which assist agencies to reach an “on balance” decision on whether to include various products in the “basic set” or whether to charge for them. If the decision is made to charge, then there are another series of “guides” which decide what costs to include in those charges. In addition, some products and services are excluded from the Guidelines altogether.

The Guidelines set out the rationale for cost recovery by Australian Government agencies. They state (pp. 11-12):

"Used appropriately, cost recovery can provide an important means of improving the efficiency with which Australian Government products are produced and consumed. Charges for goods and services can give an important message to users or their customers about the cost of resources involved. It may also improve equity by ensuring that those who use Australian Government products and services or who create the need for regulation bear the costs.

However, cost recovery may not be warranted where:

  • it is not cost effective; or
  • it would be inconsistent with government policy objectives; or,
  • it would unduly stifle competition and industry innovation."

In addition to complying with the Guidelines, agencies with “significant” cost recovery arrangements must complete a Cost Recovery Impact Statement (CRIS). Agencies whose total cost recovery receipts equal $5 million or more per annum are considered, prima facie, to be significant, regardless of the revenue generated by individual product streams. The ABS is currently deemed a “significant” agency in this context and has been listed as an agency with existing cost recovery arrangements. It is scheduled for a review in 2006-07.

Since this listing took place, the ABS has greatly increased the content of its free Basic Information Set (BIS) through the 2005-06 budget process, in which the Government gave policy approval and appropriation to make all publications on the ABS web site free of charge, and its revenue has reduced accordingly. On the ABS' 100th birthday, 8 December 2005, the Treasurer announced that free statistics on the web site would be implemented on 12 December, as the ABS' gift to the nation. The entire content of the ABS web site is now accessible free-of-charge via the Internet.

The ABS applies cost recovery principles to all clients regardless of whether they are government or non-government clients. When receipts from arrangements that are not cost-recovered for the purposes of this policy are excluded, revenue will fall well below what is considered to be significant cost recovery arrangements. Whilst ABS would no longer be required in the future to complete a CRIS to document compliance with the cost recovery policy, ABS will continue to apply the Government policy to guide its future cost recovery policies and practices. Attachment 1 for ABS provides actual and projected revenue for 2004-05 to 2009-10.

The ABS has reviewed its products and services against the Guidelines and within the context of the increased content of the BIS, consulted with its clients on the outcome of that review, and the results are reflected in this CRIS.

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