Section 6(a) of the Subordinate Legislation Act provides for the following exemption:
“. . . where the rate of increase in a fee or group of fees does not exceed the rate of increase in the Consumer Price Index since the fee or fees were last fixed."
To ensure that all proposals to increase fees are treated consistently and fairly, the Economic Policy Branch adopts the following approach to how it will apply the relevant provision of the Act.
Starting Date for Measuring Increases
The term "since the fee or fees were last fixed" will be interpreted as the date on which a particular fee was last increased. This avoids disadvantaging agencies where entire fee schedules are replaced simply to alter one or two of the fees in that schedule.
Determining Index Numbers
The index number to be used is the "all groups index number" for Hobart, published by the Australian Bureau of Statistics in Consumer Price Index, Catalogue No. 6401.0.
Starting index number
The "starting index number" is to be the last CPI number that was published prior to the date on which the existing fee commenced.
Ending index number
The "ending index number" will be the most recently published CPI number at the time the proposal is assessed by the Economic Policy Branch.
Maximum allowable increase
The maximum allowable increase in a fee is the percentage difference between the "starting index number" and the "ending index number" as defined above. Any increase above this amount would require assessment by the Economic Policy Branch.
Proposals to Increase Fees
If at any future point, prior to subordinate legislation expiring, the agency wishes to increase a fee further, it should provide the Economic Policy Branch with appropriate documentation which indicates the "ending index number" that was last used. This "ending index number" then automatically becomes the "starting index number" for the next round of fee increases. This is subject to any revision of the index number by the Australian Bureau of Statistics in the meantime.
However, if the agency does not provide any documentation of the "ending index number" that was last used, the new "starting index number" will be determined in exactly the same manner as above - that is, the last CPI number that was published prior to the date on which the new fee commenced.
The new "ending index number" is the most recently published CPI number at the time the new proposal is assessed by the Economic Policy Branch.
Increasing Fees to the Level of Cost Recovery
Government policy encourages agencies to adopt full cost recovery for fees and charges and requires that the level of fees be explicitly accountable. Guidelines are available on the Treasury website under 'Budget Guidelines' in the Budget and Financial Home Page (Costing Fees and Charges Guidelines for Use by Agencies).
Agencies may seek an increase in a fee, or group of fees, predicated on the need to achieve cost-recovery. When applying for Treasury certification in such cases, agencies are encouraged to provide any documentation produced in line with Treasury's advice which substantiates the increased level of each fee.