Regulatory Impact Assessment in Austria Dr. Andreas Fraydenegg Directorate General for Budget and Public Finance Department for General Issues, Coordination and Law PEMPAL Workshop, Vienna, March 13th, 2018

Regulatory Impact Assessment (RIA) undesired impact desired impact cost outcome PEMPAL Workshop, Vienna, March 13th, 2018

Scope of RIA mandatory for all new laws, ordinances, international agreements – national and EU legislation big projects (e.g. procurement, building projects), depending on financial impact done within the administration responsible only significant impacts are assessed in detail internal evaluation within 5 years PEMPAL Workshop, Vienna, March 13th, 2018

The seven steps to RIA Problem analysis Outcome statement Output statement Impact assessment Planning of internal evaluation Detailed Documentation Internal evaluation PEMPAL Workshop, Vienna, March 13th, 2018

Impact dimensions defined by law Financial (budgetary) impact Impact on the overall economy Impact on enterprises Environmental impact Impact in the field of consumer protection policy Impact on administrative costs for citizens and enterprises Social impact Impact on children and young people Impact regarding equality of women and men PEMPAL Workshop, Vienna, March 13th, 2018

The MoF‘s central objective The MoF (especially the DG for Budget and Public Finance) is committed to providing value for money and initiating public sector reforms The Austrian Constitution sets down the guiding principles for public finance (Art. 51): efficiency, transparency, outcome orientation, gender equality and a true and fair view on the state of the public finances RIA is a key instrument for achieving these goals PEMPAL Workshop, Vienna, March 13th, 2018

RIA and fiscal discipline The RIA process forces the administration to ex-ante clearly assess financial consequences of the respective issue Starting point for a change in focus – from input to outcome and efficiency Also: to assess consequences for the diverse impact dimensions The practical application of RIA is supported by a standardized IT-tool provided by the MoF PEMPAL Workshop, Vienna, March 13th, 2018

Scope of RIA (financial) Costs and benefits to federal/regional/local government Costs and benefits to social security providers Direct costs and benefits only Only costs and benefits that can be measured financially Not included: Public enterprises, self-governing bodies outside the federal budget Time scope: next four years (based on the scope of the medium-term-financial framework) Long-term-costs and benefits (where applicable) PEMPAL Workshop, Vienna, March 13th, 2018

The MoF‘s role in RIA Every RIA statement has to be sent to the MoF for quality assurance and budgetary agreement Impact Dimensions most relevant for the MoF: Impact on public budgets (federal/regional/local level, Social Security) Impact on bureaucracy costs for citizens and businesses (how much time is needed to comply with a new regulation) PEMPAL Workshop, Vienna, March 13th, 2018

Assessment of RIA Are there consequences for public budgets? Have they been fully and correctly assessed? Are calculations and models comprehensible, verifiable and consistent? From where‘s the data? Does the RIA contradict evidence and/or past experience regarding the relevant topic? How and where will expenses be covered (in which detail budget?) What about savings? PEMPAL Workshop, Vienna, March 13th, 2018

RIA and bureaucracy costs New regulation often creates a substantial regulatory burden for citizens and/or businesses Measures the time needed for complying with regulation („information requirements“) Time needed is converted into financial costs using average hourly wages Not measured here: direct costs to businesses or citizens (e.g. administrative fees) Objective: creating transparency and raise awareness PEMPAL Workshop, Vienna, March 13th, 2018

RIA and Deregulation Law on the Principles of Deregulation (takes effect on July 1st, 2017) One in, one out Sunset legislation No „gold plating“ where applicable We point to these principles in our assessment of the RIA statement – especially when referring to bureaucracy costs PEMPAL Workshop, Vienna, March 13th, 2018

Our Experience – Lessons learned The quality of RIA statements varies Trend: RIA statements have greatly improved since 2013 2016: The Court of Auditors regarded the quality of the RIA (assesment of financial impact) as „good“ or „very good“ in 74% of all cases – up from 61% in 2015 MoF assessment of RIA statements leads to improvements across the board Impact dimension „bureaucracy costs“ is sometimes neglected by other ministries Impact of RIA on public policy debate is still rather low PEMPAL Workshop, Vienna, March 13th, 2018

Challenges and next steps Improving the quality of RIA Further enhancing the use of RIA for purposes of „good government“ and „better regulation“ Strengthening the role of RIA in public policy debates Optimizing the legal framework and scope for RIA (e.g. to include public enterprises) Development of a new IT-Tool (web-based) PEMPAL Workshop, Vienna, March 13th, 2018

Thank you for your attention. Dr. Andreas Fraydenegg Directorate General for Budget and Public Finance Department for General Issues, Coordination and Law Himmelpfortgasse 9 1010 Vienna +43/1/51433-502029 andreas.fraydenegg@bmf.gv.at PEMPAL Workshop, Vienna, March 13th, 2018