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Impact assessment guidance

Better Regulation Victoria supports policy makers to prepare best-practice Regulatory Impact Statements (RISs) and Legislative Impact Assessments (LIAs), as well as other impact assessments.

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The Commissioner for Better Regulation independently assesses the adequacy of RISs and LIAs that are prepared by Victorian Government departments and agencies.

RISs and LIAs analyse and explain the impacts that proposed regulations and legislation are expected to have on Victorian communities and businesses.

An ‘adequate’ impact assessment is one prepared in accordance with the Subordinate Legislation Act 1994(opens in a new window) and its Guidelines (for a RIS), or the Cabinet Handbook (for an LIA), as well as the Victorian Guide to Regulation.

It should be logical, draw on relevant evidence, be transparent about any assumptions made, and be proportionate to a proposal’s expected effects.

Better Regulation Victoria (BRV) supports policy makers in the preparation and assessment of impact analysis. We offer clear, simple and practical advice on the Victorian Government’s requirements.

How BRV works with policy makers

We find that projects work best when:

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Early engagement with BRV can better support you to develop a high quality RIS or LIA, and help you to better understand the cost and benefits of different policy options.

We encourage you to contact us when you think a RIS or LIA may be required. We can help determine whether a RIS or LIA is required, explain the impact assessment framework and how you might apply it to your regulatory or legislative proposal.

At the start of a RIS or LIA project we will work with you to develop an indicative timeline with key milestones.

We will ensure that this timeline is feasible and allows sufficient time for you to draft your impact assessment and for us to review it.

Regular engagement helps make the process of preparing an impact assessment more effective and efficient.

It enables us to support your team to design best-practice regulations as well as identify and address any “adequacy” issues early. Projects work best when both our teams work iteratively and maintain close engagement throughout your impact assessment.

We encourage you to provide us with early (and partial) drafts of your impact assessment. We will explain our feedback and how it relates to the adequacy of your RIS or LIA.

We review your impact assessment for ‘adequacy’ as described in the Victorian Guide to Regulation, while respecting your ownership of the RIS or LIA.

We will provide clear advice, in ‘plain language’, that is in proportion with the impact of the proposal and is consistent with earlier BRV advice.

We will also provide advice in a timely matter to help you meet your project timeline.

We understand that projects don’t go exactly to plan. Your proposal and timelines may change.

By following the steps above for your RIS or LIA project, we will be able to adapt quickly when you advise us of changes.

Developing an effective impact assessment

As outlined in the Victorian Guide to Regulation, in most cases an effective impact assessment should include the following sections:

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  1. 1Problem analysis

A good problem analysis should clearly answer: ‘Why is the Government considering action?’

This section should set out the case for action. It should describe a ‘problem’ - an actual or potential harm to the community that the Government wishes to address or reduce.

It can rely on various approaches or frameworks, including market failures, behavioural sciences, risk management, and social or equity concerns.

It should provide a clear, succinct and evidence-based description of:

  1. 2Objectives for action

When explaining objectives for action, the impact assessment should clearly answer: ‘Which outcomes is the Government aiming to achieve?’

This section should define the specific outcomes the Government aims to achieve in relation to the problem defined in the previous stage.

It should be focused on the ends that Government is aiming for (rather than the means to achieving them). It should draw on the problem analysis and mechanisms or harms it identified, and link to broader Government objectives (such as increasing productivity) that may be relevant.

This section should provide a clear description of:

  1. 3Identify feasible options

An impact analysis should clearly answer: ‘What are the possible different courses of action that could be taken?’

This section should identify feasible options capable of addressing the problem, and achieving the objectives, described above.

It should broadly discuss different approaches, including non-regulatory options, approaches in other jurisdictions, and improvements to existing regulatory regimes and regulatory practice. Where possible, stakeholders should be involved in identifying possible options to address the problems they are facing while avoiding complex, onerous or ineffective requirements.

This section should provide a clear description of the broad range of possible options which address the problem, and an explanation of how they were selected and why other options were considered infeasible.

  1. 4Impact analysis

A good impact analysis should clearly answer: ‘What are the expected impacts (benefits and costs) of options and what is the preferred option?’

This section should identify the anticipated impacts of the feasible options and provide a clear explanation of how this was done. It should determine the preferred option, after accounting for all the costs and benefits, and provide clear advice to the Government on the potential effects of options, for informed final decisions.

Impact analyses can draw on relevant evidence and data, and use qualitative and qualitative approaches to estimate the likely effects of the feasible options in terms of:

  1. 5Summarise the preferred option

When summarising the preferred option, answer: ‘What are the characteristics of the preferred option, including small business and competition impacts?’

This section might not be needed for simple proposals where a good summary can be provided in an executive summary or impact analysis section. For more complex proposals, a separate section should ensure the Government and stakeholders are given sufficient summary information about the preferred option to understand what it will mean in practice.

No new analysis is required in this summary, but it should include information from other parts of the impact assessment that stakeholders would need to know about the preferred option and how it would affect them. Consider the knowledge, expectations and needs of affected stakeholders.

This section should provide a clear summary of the key features of the preferred option and how it will function in practice. Compared to other sections in the impact analysis, it might:

  1. 6Implementation plan

An implementation plan should clearly answer: ‘How will the preferred option be put into place?’

It should set out a clear, practical strategy for implementing the preferred option, by outlining:

Document the Government’s roles and resource requirements at a sufficient level to ensure accountability and to govern delivery and performance over time.

This section should clearly set out responsibilities for, and approach to:

  1. 7Evaluation strategy

An evaluation strategy should clearly answer: ‘When (and how) will the Government evaluate the effectiveness of the preferred option in meeting the objectives?’

This section should establish mechanisms that will enable the Government to explain how, and how well, the preferred option has worked in practice, and to drive continuous improvement of regulatory arrangements over time.

To develop an evaluation strategy, you should consider the information and data you already collect, and where information and data might be lacking. A clear strategy will confirm the roles and responsibilities for evidence gathering, monitoring and evaluation, and document the relationships between:

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 contact@betterreg.vic.gov.au for further advice on any other issues.

Frequently Asked Questions

Frequently Asked Questions – Regulatory Impact Analysis PDF 234.1 KB (opens in a new window)

Frequently Asked Questions – Regulatory Impact Analysis Word 138.83 KB (opens in a new window)

Fees

Guidance Notes - Fees RISs PDF 2.27 MB (opens in a new window)

Guidance Note - Fees RISs Word 97.51 KB (opens in a new window)

Additional BRV guidance on developing high quality policy proposals and impact assessments is available here: The Victorian Guide to Regulation.

Other guidance

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

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 OCPC 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.

Governance

Updated 17 June 2025

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