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Policy Review
 

Image: Policy Review POLICY REVIEW

Which of the agency's objectives are relevant to the activities or products being considered for cost recovery?

Role of the ABS

The ABS is an information agency in terms of the Guidelines. The ABS is the central statistical authority for the Australian Government and the largest provider of statistical information in Australia. Its statistics are used to inform research, discussion and decision making within governments and the community. It also has a responsibility to provide information on how Australia is changing. Provision of such statistics is a key element of the democratic process. To fulfil this role, the ABS produces and disseminates a wide range of statistical products and services, with the objective of informed and increased use of statistics.

Dissemination objectives of the ABS

ABS dissemination objectives are to obtain widespread dissemination of free information, while recovering the efficient costs involved in providing products and services obtained for private benefit. The balancing of community service obligations and cost recovery principles underpin ABS dissemination and pricing policy. These objectives are consistent with the rationale for cost recovery set out in the Guidelines and quoted in para 3 of this CRIS.

ABS pricing principles

In reviewing its cost recovery arrangements, ABS has developed a set of pricing principles. These are set out in Attachment 2.

Should cost recovery be introduced?

ABS introduced full cost recovery in 1989 in line with Australian Government policy at that time and the review confirmed that ABS pricing has reflected government policy since then. ABS has re-assessed its information activities against the criteria set out in the Guidelines to determine:

  • which products and services should be taxpayer funded; and
  • the approach to cost recovery for other products and services.

The general premise set out in the Guidelines for the distinction between free and charged products and services (p. 29) is that:
  • general information products produced for the Australian community should be taxpayer funded; and
  • information products produced at the request of specific groups or individuals should be cost recovered.

Using this general distinction as a guideline, and the more detailed criteria from the Guidelines (pp. 31 & 35; also set out in Attachments 3 & 4 of this CRIS), ABS has classified its information products and services into four main streams for cost recovery purposes:
  • the product or service is free because it meets the criteria for inclusion in the Basic Information Set (BIS);
  • pricing based on marginal costs for the further dissemination of products and services in the BIS;
  • pricing based on incremental costs for products and services beyond the BIS, e.g. where data are not available from the ABS web site or where professional services are required; and
  • commercial pricing, based on competitive neutrality principles, for products and services which could compete with similar products and services provided by competitors.

Priced products and services form the ABS’ Additional Information Set (AIS), which includes marginally and incrementally costed products and services in the Supplementary Information Set (SIS) and commercially costed products and services in the Commercial Information Set (CIS). Attachment 5 sets out ABS products and services in the BIS and the SIS.

Many ABS activities are not products and services but form part of the Basic Information Set. ABS surveys and collections are conducted using government appropriation. The BIS activity includes processing of the survey data to the final unit record file stage. The review concluded that they are in BIS. A number of products and services are created from these final unit record files. Some meet the guides to be considered part of the BIS. Products and services contained in the BIS are listed at Attachment 5.

Other products and services are considered to be outside the BIS, mainly because they have been created for use by a narrow group of clients, or because they further disseminate data already available as part of the BIS. These products and services form the SIS, and are also listed at Attachment 5.

The ABS, in reviewing its cost recovery activities, notes that some information activities are undertaken in relation to policy development and meeting Parliamentary requirements and therefore should not be included as cost recovery activities. Examples of activities that are not directly related to the provision of information products and services include:
  • advising Parliament on issues where the ABS has expertise;
  • answering Parliamentary questions directed to the ABS about the ABS;
  • briefing Ministers and responding to their correspondence;
  • undertaking financial reporting; and,
  • complying with international treaties.

The costs of these activities are funded from appropriation.

Changes in ABS prices

ABS prices have varied as a result of the inclusion of all data available on the ABS web site in the BIS. A number of products and services formerly costed at the marginal or incremental rate are now free.

It should be noted here that the Guidelines (p.10) explicitly exclude coverage of commercial charging arrangements in competitive or potentially competitive markets that comply with competitive neutrality principles and also exclude any form of inter or intra-government charging. The ABS does have some very minor revenue from commercial products and services. Charging arrangements for these comply with competitive neutrality principles. However, the ABS has significant revenue from inter- and intra-government charging. In general, it is ABS policy to use the Guidelines when assessing intra-agency or inter-governmental charging since the proper allocation of costs brings efficiency and accountability benefits. There is no cost shifting nor cross subsidisation between ABS inter- and intra-government clients and non government clients.

In re-assessing ABS cost recovery policy and practice; the review determined that existing ABS Pricing Policy was largely consistent with the Guidelines. Most changes to ABS prices in 2006-07 will result from the increased content of the BIS, rather than any significant correction of ABS Pricing Policy to reflect the Guidelines.

What mechanisms, including consultation, should be used for ongoing monitoring of the efficiency and effectiveness of cost recovery arrangements?

The Guidelines state (p. 37) that "the CRIS should examine and recommend mechanisms for ongoing monitoring that are appropriate for the individual circumstances of the agency." The ABS Audit Committee (through the audit program) will be the principal body to monitor the efficiency and effectiveness of cost recovery arrangements and the Australian Statistics Advisory Council (ASAC) will have a role in providing a user perspective.

In addition, ABS provides its Pricing Policy on the ABS web site and invites ongoing comment from clients on its content.

Where major changes to pricing are contemplated, ABS intends to consult widely with the user community via the ABS web site before implementation.

How long (not more than five years) before the cost recovery arrangements should be reviewed again?

ABS costs and prices are reviewed annually to ensure that revenue recovers appropriate costs. However, the Guidelines require a wider periodic review of existing cost recovery arrangements which address the appropriateness of cost recovery, the design of cost recovery charges and the adequacy of monitoring arrangements. Such a review must occur no later than five years from the last review. Five years is the most appropriate for the ABS given that the Census cycle is also five years. Therefore, a regular review of existing cost recovery arrangements will be undertaken every five years from 2006. In addition to these five yearly reviews, a CRIS will be prepared as required for any new or materially amended cost recovery arrangements.

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