You are evaluating a sunsetting regulation. You may be required to complete an economic assessment as part of a Regulatory Impact Statement.

The sunsetting process requires an evaluation of the regulation after ten years of operation to determine whether it is appropriate to reinstate it.

You should prepare for an evaluation of the regulation if or when the regulation is proposed to be remade. The outcomes of the evaluation could form part of the Regulatory Impact Statement (RIS) in the event that the regulation is proposed to be remade.

Evaluating the effectiveness of regulation

You should also undertake a stand-alone evaluation of regulations (distinct from the process for sunsetting regulations). The purpose of the evaluation is to examine whether the expected benefits of the regulatory intervention have been achieved. An appropriate timeframe for an ex-post evaluation is three to five years after the commencement of the regulations.

You need to prepare an evaluation strategy for any new or amended primary or subordinate legislation that will impose a noticeable burden on any sector of the community (e.g. business, the not-for-profit sector and households).

The Victorian Guide to Regulation outlines what is required in the case of evaluations of regulations (both sunsetting and stand-alone) and legislation.

How should I undertake the economic assessment?

If your evaluation requires an economic assessment, guidance on undertaking economic Guidance-on-how-to-undertake-economic-assessment-internet.DOCX (DOCX 127.36 KB) assessment has been developed for staff to assist when performing, commissioning and evaluating economic assessments. Further guidance on specific processes, variables and methods is also available.

Cost-benefit analysis is recognised as leading practice economic assessment and is the recommended approach across the Victorian Government. In practice it may not be possible to undertake a cost-benefit analysis for all proposals and other methods may be used on an exceptions basis.

All economic assessments should be guided by the principle of proportionality, such that the investment in undertaking an economic assessment should be proportional to the scale and risk of the particular issue, initiative or investment.