How to prepare regulatory impact assessments

Advice and guidance for departmental and agency staff preparing impact assessments.

Better Regulation Victoria (BRV) provides advice and guidance for departmental and agency staff preparing regulatory impact assessments, including Regulatory Impact Statements (RISs) for statutory rules and legislative instruments and Legislative Impact Assessments (LIAs) for Bills.

Our staff are experts in the preparation and assessment of impact analysis. We offer clear, simple and practical advice on the Victorian Government’s requirements.

Victorian Guide to Regulation

Victorian Guide to Regulation

The Victorian Guide to Regulation (the Guide) explains the Government's approach and requirements for impact analysis. The current edition was released in November 2016.

The Guide should be read in conjunction with:

The seven key questions

The Guide explains seven key questions that must be answered in an impact assessment:

  1. Why is the Government considering action? (problem analysis)
  2. Which outcomes is the Government aiming to achieve? (objectives for action)
  3. What are the possible different courses of action that could be taken? (identify feasible options)
  4. What are the expected impacts (benefits and costs) of options and what is the preferred option? (impact analysis)
  5. What are the characteristics of the preferred option, including small business and competition impacts? (summarise the preferred option)
  6. How will the preferred option be put into place? (implementation plan)
  7. When (and how) will the Government evaluate the effectiveness of the preferred option in meeting the objectives? (evaluation strategy)

In addition, an impact assessment must include the views of stakeholders consulted to date and how future consultation will be undertaken.

Contents of an effective impact assessment

To effectively answer these questions, BRV suggests in most cases an effective impact assessment should include the following sections:

Additional BRV guidance

BRV has also prepared further guidance to assist Government departments and agencies preparing their regulatory impact assessments including RISs and LIAs.

Please contact us at for further advice on any other issues.

Toolkit: Requirements and Processes for Making Subordinate Legislation

Hints and tips on preparing a Regulatory Impact Statement (RIS) or a Legislative Impact Assessment (LIA)

Hints and tips for Preparing a Regulatory Impact Statement for sunsetting regulations

Guidance Note - Fees RISs

This guidance note provides advice on preparing RISs for regulations that set fees for government licences, services and other activities. This note is designed to complement the Guide and Cost Recovery Guidelines published by the Department of Treasury and Finance.

Guidance Note - Suggested Value of a Statistical Life in RISs and LIAs

The Value of a Statistical Life (VSL) method is sometimes used to estimate the value of the lives that might be saved by a policy intervention, especially in health or safety contexts. This guidance note provides advice for using the VSL method in an impact analysis.

Guidance Note - Multi-Criteria Analysis (MCA)

This guidance note explains how to use MCA as a decision tool in impact analysis.

Other guidance

Other agencies have prepared advice on preparing or analysing regulation, which may be useful.

Smart Regulation: Grappling with Risk

The former Victorian Competition and Efficiency Commission (VCEC) published this guidance on prioritising regulatory effort through risk-based approaches.

Notes for Guidance on the preparation of Statutory Rules

The Office of the Chief Parliamentary Counsel (OCPC) has published advice on preparing statutory rules, available at the Victorian Legislation and Parliamentary documents website.

Penalty and fee units

The Department of Treasury and Finance and the OCPC have both published advice on penalty and fee units.

Scrutiny of Acts and Regulations Committee

The Scrutiny of Acts and Regulations Committee of the Victorian Parliament publishes a range of practice notes and checklists, as well as an Annual Review of Victorian regulations.

More information is available on the Victorian Parliament website.

Reviewed 06 March 2020

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