Choose from 5 options:
4. Risk assessment
In accordance with the AGCRPs, a Charging Risk Assessment (CRA) has been undertaken that considered the future operating environment, including its:
- complexity: structure, processes and implementation of cost recovery activities;
- materiality: financial value of the cost recovery activities; and
- sensitivity: level of interest from key stakeholders in the cost recovery activities.
The overall cost recovery risk rating for 2024-25 is determined to be medium.
These identified key risks and their mitigation strategies are documented in Table 22 below.
Table 23– Risks and risk mitigation strategies
| Risk | Mitigation strategy |
|---|---|
| Assumptions made for the new Scheme are not reflective of actual regulatory effort or costs. | Regulatory effort and costs will continue to be monitored. Assumptions informing the cost model will continue to be replaced by contemporary data as collected. AICIS continues to gather and improve the quality of internal effort data to inform future pricing. |
| Under- or over-recovery through levies due to change in introduction value of industrial chemicals per introducer. | Introduction value monitoring will continue considering the pricing of each level and the appropriateness of the level structure through the annual CRIS process. |
| Under or over-recovery of fee for service activities due to the low number of applications made under the IC Act 2019. This is especially relevant given the post introduction regulatory focus of the Scheme. | Prices have been revised in the 2024-25 CRIS to meet the inflationary impacts relating to employee wages and supplier costs. Volumes of applications and associate effort will be monitored, and charges will be reviewed through the annual CRIS process. There are currently no further price revisions due to insufficient data being available to substantiate significant year on year volume variation. |
| Reserve balance significantly increases or depletes beyond targeted levels | The impact of the charging structure on the reserve balance will continue to be monitored with consideration given to forecast future costs and revenue predictions. |