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Cost recovery impact statements

The Therapeutic Goods Administration routinely prepares cost recovery impact statements (CRIS).

Definition

In essence, a CRIS transparently documents how an agency's fees and charges comply with its cost recovery policy and with the Australian Government Cost Recovery Guidelines.

Background

In December 2002 the Australian Government adopted a formal cost recovery policy to improve the consistency, transparency and accountability of its cost recovery arrangements and to promote the efficient allocation of resources. The underlying principle of the policy is that entities should set charges to recover all the costs of products or services where it is efficient and effective to do so, where the beneficiaries are a narrow and identifiable group and where charging is consistent with Australian Government policy objectives.

Cost recovery policy is administered by the Department of Finance and Deregulation and outlined in the Cost Recovery Guidelines.

When is a CRIS prepared?

According to the Guidelines, a CRIS should be prepared for significant cost recovery arrangements, when:

• reviews consistent with the Australian Government's review schedule for existing cost recovery arrangements are undertaken;
• new cost recovery arrangements are proposed;
• material amendments are made to existing arrangements (a general rule-of-thumb is that price changes greater than the Consumer Price Index would be considered material – however, agencies should also consider the likely impact on stakeholders); and
• periodic reviews of cost recovery arrangements are undertaken.

A CRIS differs from a Regulation Impact Statement (RIS), which is required for proposed regulation (or amendment to regulation) that affects business.

Recent TGA cost recovery impact statements

• Addendum to cost recovery impact statements
  Documents the increase in fees and charges attributed to the cost of implementing the TGA's Blueprint Reforms
• Cost recovery impact statement - Medical devices
  Cost Recovery Impact Statement documenting TGA’s cost recovery arrangements for the regulation of medical devices
• Cost recovery impact statement - Good manufacturing practice
  Cost recovery impact statement documenting cost recovery arrangements for GMP activities that will be in place during the 2012-13 financial year
• Regulation of biologicals (human cell and tissue therapy products)
  As the TGA recovers the full cost of its regulatory activities there will be regulatory costs for sponsors and manufacturers of HCTs with the implementation of the new system

Cost recovery impact statements more than 2 years old are available in the TGA Internet archive.