ARPANSA Strategy for Increasing Regulatory Revenue
Dear Australian Radiation Protection and Nuclear Safety Agency,
ARPANSA reported an operating deficit of over $2.4 million last year. ARPANSA’s expenses exceeded $26 million while revenue was about $24 million, just over half of which was government appropriated. About $4.3 million of this revenue came from regulatory licence fees and charges.
The CEO of ARPANSA has actively promoted ways of increasing revenue through cost recovery. He recognised that a financial opportunity existed for ARPANSA to assign regulatory responsibilities to non regulatory staff and thereby increase revenue through cost recovery while retaining the same government appropriation. The most recent ARPANSA annual report refers to a strategy for enhancing the agency’s revenue-generating activities including regulatory cost recovery models.
I seek access to information under the Freedom of Information Act 1982 {FOI Act} regarding ARPANSA's efforts to increase annual licence charges. My request includes documents such as meeeting minutes, position papers, strategies and emails from December 2016 to the present. Requested emails may be limited to those involving the CEO that describe his desire to increase annual licence charges, broaden cost recovery or expand involvement of agency staff in regulatory matters, the effect of which would be to increase future licence charges. This request includes Executive Group and Stategic Management Committee meeting minutes such as Item 2.5 of SMC paper dated 12 December 2016.
Yours faithfully,
Anonymous
Dear Sun Shine
I refer to your email below dated 31 January 2019.
You have sought access to information regarding ‘ARPANSA’s efforts to increase annual licence charges’.
I note that ARPANSA was the subject of performance audits by the Australian National Audit Office (ANAO) in 2005 and 2014. Both these audits covered the topic of cost recovery (see below for extracts from the ANAO).
“3.1 When establishing ARPANSA, the government decided that: … entities regulated … should bear the costs of such regulation, ensuring that there will be no additional burden on the Commonwealth or the public purse.
3.2 ARPANSA was required to establish user-pays initiatives in regard to its regulatory costs as soon as possible. These costs of regulation include the licensing process and ongoing management of licensee compliance with licence conditions. ARPANSA was empowered to charge licence application fees under the ARPANS Act and Regulations and annual licence charges under the Australian Radiation Protection and Nuclear Safety (Licence Charges) Act 1998.’…….
3.19 ‘since 2000–01, ARPANSA has under-recovered recorded regulatory costs by some $1.55 million, or 12 per cent of identified costs. The actual under- recovery is greater because these costs do not include all regulatory effort. The ANAO recommended that ARPANSA develop a policy framework to guide its cost recovery arrangements. (The Australian National Audit Office, Audit Report, No. 30, 2004 – 05, Performance Audit).
The Australian National Audit Office, Audit Report No.29 2013–14, Performance Audit, found that
‘Since 2008–09 ARPANSA has under‐recovered its regulatory expenses by almost $4 million and has used revenues from its scientific and advisory services functions to cross‐subsidise its regulatory function. Further, ARPANSA’s calculations indicate that there is cross‐subsidisation occurring between licence holders’.
In response to the ANAO recommendations, ARPANSA developed a cost recovery plan to achieve full cost recovery by 2019 in line with Government policy. This involved a considerable amount of work including the formation of a cost recovery working group, the implementation of an activity based tracking system known as the Cost Recovery Tracker database to capture data in relation to regulatory effort and amending the Licence Charges Regulations to adjust charges based actual regulatory effort and indexation.
As presently worded your request for information regarding ‘ARPANSA’s efforts to increase annual licence charges’ is extremely broad and would capture a significant amount of documentation relating to the implementation of a cost recovery plan in accordance with Government policy including various drafts of the regulations, papers and minutes of the Executive Group and Strategic Management Committee, file notes of communications with the Office of Parliamentary Counsel, file notes of communications with the Department of Health, internal notes and minutes of the cost recovery working group and consultation with Licence Holders.
I note you have limited emails to the following:
• Emails involving the CEO that describe his desire to:
(a) increase annual licence charges,
(b) broaden cost recovery or
(c) expand involvement of agency staff in regulatory matters, the effect of which would be to increase future licence charges.
As presently worded this may capture any email regarding cost recovery or the indexation of licence charges which the CEO has sent, received or has been copied into.
Next Steps
Unless you agree to limit the scope of your request, I intend to refuse your request on the grounds that the resource impact of processing the request would be substantial and unreasonable (s 24AA(1)(a)).
Please let me know whether you agree to limiting and clarifying the scope of your request to the following:
For the period from 1 December 2016 to 31 January 2019, the following documents:
1. Papers or minutes of the Executive Group or Strategic Management Committee in relation to the implementation of full cost recovery (excluding drafts and duplicates)
2. Minutes of the cost recovery working group (excluding drafts and duplicates)
3. Emails involving the CEO that describe his desire to broaden cost recovery beyond the Government policy of full cost recovery of regulatory expenses.
Please contact me on (02) 9541 8311 if you would like to discuss this matter.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Dear $ARPANSA FOI,
Thank you. I agree to limit my request as described.
I acknowledge that ARPANSA was the subject of an audit by the ANAO in 2014. However I'm also aware that, beginning in or about 2016, the CEO of ARPANSA recognised that a financial opportunity existed for ARPANSA to assign regulatory responsibilities to non regulatory staff and thereby increase revenue through cost recovery while retaining the same government appropriation. I believe this is reflected in Executive Group and Stategic Management Committee meeting minutes such as Item 2.5 of SMC paper dated 12 December 2016.
Although I agree to limit and clarify my request, I don't agree to limit my CEO email request to that which is "beyond the Government policy of full cost recovery". I'm sure you would inform me that you have no such emails. I understand that the Australian Government cost recovery framework may not apply to government activities for which only government entities are charged. I also realise that the government policy may be vague and the CEO of ARPANSA may have little to restrain him in what he charges. However it is generally accepted that ARPANSA should recover only the efficient costs of regulation.
Experience shows that conflicts between duty and interest can seldom be managed. In this case, the CEO's duty is to regulate efficiently and his interest is to eliminate operating deficits.
For the period from 1 December 2016 to 31 January 2019, I agree to limit my request to the following documents:
1. The written strategy for increasing revenue related to regulatory activities (the most recent ARPANSA annual report refers to a strategy for enhancing the agency’s revenue-generating activities including regulatory cost recovery models).
2. Papers or minutes of the Executive Group or Strategic Management Committee in relation to the implementation of full cost recovery (excluding drafts and duplicates)
3. Emails involving the CEO that relate to his desire to increase revenue from annual licence charges. This includes expanding involvement of agency staff in regulatory matters, the effect of which would be to increase future licence charges.
Of course I'm not interested in anything related to indexation. I'm not interested in documentation related to correspondence with Department of Health or any other offices external to ARPANSA.
Yours sincerely,
Anonymous
Dear Sun Shine
I refer to your email below.
I note that category 3 of your refined scope is seeking for the period from 1 December 2016 to 31 January 2019:
'Emails involving the CEO that relate to his desire to increase revenue from annual licence charges'.
I note you stated that this may include 'expanding involvement of agency staff in regulatory matters, the effect of which would be to increase future licence charges'. This clarification does not, however, limit the scope of the request.
With the assistance of our IT area, I have conducted a search of the CEO's emails for any email sent from the CEO which mentions 'cost recovery' in the either the subject line, body of the email or body of the attachment within the period from 1 December 2016 to 31 January 2019. The search returned 158 emails. I used the search term 'cost recovery' because I am instructed by the CEO that the only time he would have discussed increasing licence charges was in the context of cost recovery.
In order for me to calculate any charges under the FOI, please confirm my understanding of the scope is correct.
I am happy to discuss further on 9541 8311.
I also note that this request captures third party information, so the processing time will be extended to 1 April 2019.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Dear $ARPANSA FOI,
Thank you. I'd like to simply my request further.
I'm specifically interested in any email communications from the CEO that indicate a desire to redeploy non regulatory staff, the consequence of which would be to inflate regulatory costs, or to attribute more administrative overhead to regulatory costs.
For clarification. and to obviate the need for charges, the search you conducted involving CEO sent emails can be further limited. Please exclude any of those 158 emails that did not involve the Chief of Staff [cc or addressee]. Exclude any of the 158 that did not refer to involving additional personnel in regulatory work or administrative overhead.
I hope this simplifies things for you.
Yours sincerely,
Anonymous
Dear Sun Shine
Attached is a ‘Decision to impose a charge and preliminary assessment of
charges’ dated 28 March 2019.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Phone +61 2 9541 8311
email [1][email address]
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Dear $ARPANSA FOI,
Thank you for your response. I contend that the proposed charge has been wrongly assessed and should not be necessary. The scope of your preliminary assessment is excessive.
For clarification, my request is limited to avoid the imposition of charges.
I seek access to readily available information only. My request includes documents such as meeting minutes and strategies from December 2016 to the present. Of interest are those documents that indicate the CEO's desire to increase annual licence charges, broaden cost recovery or expand involvement of agency staff in regulatory matters, the effect of which would be to increase future licence charges. As a minimum, this request includes Executive Group and Strategic Management Committee meeting minutes such as Item 2.5 of SMC paper dated 12 December 2016.
ARPANSA's most recent annual report refers to a strategy for enhancing the agency’s revenue-generating activities, including regulatory cost recovery models. My request includes the document that describes this strategy.
No emails are requested. I hope this clarification results in elimination of any charges and compliance with the FoI Act.
Yours sincerely,
Anonymous
Dear Sun Shine
Thanks for your clarification. Given the reduced scope no charges will apply and I will process your Freedom of Information request accordingly.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Dear Sun Shine
Please find attached the FOI decision in relation to your FOI request made
on 31 January 2019 and amended on 5 April 2019.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Dear $ARPANSA FOI,
Thank you for providing some of the requested documents. However I note that two documents which I requested specifically were not provided:
1) Item 2.5 of SMC paper dated 12 December 2016.
2) ARPANSA's strategy for enhancing the agency's revenue-generating activities. The most recent annual report refers to such a strategy, including regulatory cost recovery models. I assume this strategy exists in written form or forms.
Your decision does not explain why these documents were not provided. Please provide the documents this week or let me know if the documents were intentionally withheld.
Yours sincerely,
Anonymous
Dear Sun Shine
Thanks for your email. I am conducting some more enquiries and will respond this week with any additional documents.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel
Dear Sun Shine
Please find attached my supplementary decision dated 2 May 2019.
Kind regards
Gemma Larkins
Legal Officer
Office of the General Counsel