Commonwealth of Australia Explanatory Memoranda

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THERAPEUTIC GOODS (CHARGES) AMENDMENT BILL 2017

                                        2016-2017



          THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                           HOUSE OF REPRESENTATIVES




          THERAPEUTIC GOODS (CHARGES) AMENDMENT BILL 2017



                                  ADDENDUM TO THE

                          EXPLANATORY MEMORANDUM




This addendum responds to concerns raised by the Senate Standing Committee for the
Scrutiny of Bills in Scrutiny Digest No. 12 of 2017, dated 18 October 2017.


         (Circulated by authority of the Minister for Health and Minister for Sport,
                              the Honourable Greg Hunt MP)
Item 5

At the end of item 5 - add:

The Australian Government Charging Framework requires cost recovery levies to be imposed
as annual charges when a good, service or regulation is provided to a group of individuals or
organisations rather than to a specific individual or organisation. Unlike general taxation,
such levies are earmarked to fund activities provided to the group that pays the levy.

The annual charges relating to conformity assessment body determinations will be calculated
after taking into account the total expected cost of the monitoring and compliance framework
for conformity assessment bodies and will be set in accordance with the Australian
Government Cost Recovery Guidelines.

Setting the amount, or the method for calculating the amount, of annual charges in the
regulations, rather than the principal legislation, is designed to provide the appropriate level
of flexibility to:
     impose different amounts of charges, or have different methods of calculation,
      depending on the scope of conformity assessment body determinations (that is, whether
      a determination is of general application or is limited to specified medical devices
      and/or specified conformity assessment procedures); and
     set the amount of annual charge, or its method of calculation, to accurately reflect the
      cost of regulation as the scheme evolves, and to adjust the amount over time to avoid
      over or under recovery.

Before prescribing the amount of annual charges in respect of conformity assessment body
determinations, the Department of Health (through the Therapeutic Goods Administration
(TGA)) will undertake detailed consultation with stakeholders, including medical device
industry peak bodies through the TGA's Regulatory and Technical Consultative Forum
(RegTech). A Cost Recovery Implementation Statement will be prepared and published on
the TGA's website which will further facilitate transparency and accountability.

This approach, then, will prevent the need to amend primary legislation whenever there are
changes to cost recovery arrangements, and is also consistent with the approach taken in
relation to existing annual charges imposed on the registration, listing and inclusion of goods
in the Australian Register of Therapeutic Goods, and the licensing of manufacturers of
therapeutic goods.

The Bill does not include a maximum amount of charge because any such limit prescribed
would be arbitrary and would need to be substantially in excess of the amount proposed to be
charged, which would likely result in confusion of, and criticism by, stakeholders.

As legislative instruments, the regulations will be subject to the requirements of the
Legislation Act 2003, including requirements in relation to consultation and parliamentary
scrutiny. In particular, the regulations will be tabled in Parliament and are disallowable by
either House, which will assist in ensuring that charges are not excessive. They will also be
subject to scrutiny by the Senate Standing Committee on Regulations and Ordinances.




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