Attachment B - Summary of main stakeholder views and AICIS responses

Registration levy costs

• Large financial impact moving between registration level 7 to 8
• Lower levels should be paying more
• There should be fewer lower registration levels and additional levels after level 8, allowing smoother increase in registration costs and removing the steep jump in levies between the levels 7 and 8 

Stakeholder views are noted.

As noted in the CRIS, the review which informed charging arrangements acknowledged the inadequacy of representative data gathered over specific short periods of operation of the scheme. It identified the need for further evidence to inform a meaningful analysis of the cost drivers of levy funded activities in the context of the thresholds of the 8-tier registration charging model (section 3).

The CRIS commits to continue collection of further regulatory effort data to inform further analysis of the appropriateness of the 8-tier registration charging model.

In delivering AICIS’s ongoing commitment to appropriate charging arrangements in accordance with the Australian Government Charging Framework, AICIS will continue to consider the following factors in setting fees and charges:

• alignment with the charging principles underpinning the charging framework: transparency, efficiency, performance, equity, simplicity and policy consistency
• consistency with the policy authority for AICIS cost recovery 
• consistency with the principles outlined in the Consultation Paper; Principles for cost recovery of the Australian Industrial Chemicals Introduction Scheme¹³
• stakeholder feedback, impact and understanding 

Aligning regulatory effort with registration charge

• The risk of the chemical isn’t proportional to the introduction value, nor the regulatory effort required to manage risk
• Unclear rationale for Introduction value to include insurance and freight costs, customs duty, labour and material costs and factory costs
• Fluctuations in sea freight experienced during the Covid period raised the landed value of goods. While the increase has since settled there has been no adjustment to the registration level thresholds to allow for “Creep” 
• It could be argued that a higher value of goods reflects higher quality and therefore conceivably present lower hazard and risk.

Stakeholder views are noted.

AICIS is designed to align regulatory effort with the risks posed by industrial chemical introductions to promote innovation and encourage the introduction of lower-risk chemicals.
 
As noted in the CRIS (Section 3), the available data demonstrates that as annual introduction value increases, businesses generally introduce: 

• larger numbers of different chemicals, and in larger volumes, which increase exposure and the likelihood of greater risks to humans and the environment, and 
• more complex chemicals, which require greater regulatory effort to evaluate risk and correspondingly more complex risk management considerations. 

In keeping with the Charging Framework principles for the efficient implementation of cost recovery arrangements, information required to determine introduction value is readily available to introducers and does not impose an additional burden. It is for this reason that introduction value is currently considered to be the most appropriate proxy for regulatory effort expended on levy funded activities.

The AICIS will continue to gather contemporary data to undertake a more fundamental examination of the charging model through the 2024-25 CRIS. Stakeholder consultation will occur before any proposed charging approaches are implemented.

Impact on Australian industry and innovation

• Better products available internationally are not introduced in Australia due to the cost of introduction.
• Where the cost of innovation is high, the business risk is high and therefore not worth pursuing.

The AICIS Scheme is designed to promote innovation toward safer chemistry by restricting pre-market risk assessments to higher risk chemical introductions.

For businesses introducing lower risk chemicals, regulatory intervention shifts from pre- to post-market. There is also greater opportunity to use overseas information under AICIS, including a streamlined introduction pathway where chemicals with certain international risk assessments can be introduced without a pre-market assessment, significantly reducing time to market.