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Cost recovery implementation statement, V1.3
Version 1.3 March 2018
Policy and statutory authority to cost recover
Where specific demand for a government activity is created by identifiable individuals or groups, they should be charged for it unless the government has decided to fund that activity. Where it is appropriate for the Australian Government to participate in an activity, it should fully utilise and maintain public resources, through appropriate charging. The application of charging should not, however, adversely impact disadvantaged Australians. The Australian Government's overarching cost recovery policy is that, where appropriate, non-government recipients of specific government activities should be charged some or all of the costs of those activities. The cost recovery policy promotes consistent, transparent and accountable charging for government activities and supports the proper use of public resources.
Cost recovery involves the government entities charging individuals or non-government organisations some or all of the efficient costs of a specific government activity. This may include goods, services or regulation, or a combination of these. The Australian Government Cost Recovery Guidelines (CRGs) set out the overarching framework under which government entities design, implement and review cost recovered activities.
In the 1997–98 Budget, Budget Paper No.2, Part II: Revenue Measures it was stated that the TGA would fully recover all costs from industry from 1998–99. As the TGA operates on a cost recovery basis, to enable pre- and post-market regulatory activity, there are a number of fees and charges for therapeutic goods. These include annual charges, application and evaluation fees, conformity assessment fees and inspection fees which are imposed on sponsors and manufacturers of medicines and medical devices.
The Therapeutic Goods Act 1989 (the Act) provides a legal authority for the TGA to charge for its regulatory activities within the scope of the Act. The Therapeutic Goods (Charges) Act 1989 (the Charges Act) provides a legal authority to levy annual charges (a type of tax) on sponsors and manufacturers of medicines and medical devices. Applicable fees and charges are prescribed in the subordinate regulations made under these Acts.
- Australian Government Charging Framework, 2015, available at www.finance.gov.au.
- Under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), revenue from cost recovery is a public resource for both corporate and non-corporate Commonwealth entities. Section 8 of the PGPA Act defines 'proper' use or management of public resources as efficient, effective, economical and ethical.