Transcript WELS stakeholder forums' presentation

WELS REVIEW
Stakeholder Forums
- Brisbane 14 February 2012
-Sydney 16 February 2012
-Melbourne 17 February 2012
Plan for the Forum
- Tea and coffee on arrival
- Background – why we are here
- Changes to the fee structure/transition
- What is a model?
- Changes to registration arrangements
- Compliance & Enforcement
- Advertising
- Grandfathering
- Other
Discussion over lunch as required
Our tools
Consultation paper
FAQ paper
This presentation
Session 1
hard copies available now
www.waterrating.gov.au/
hard copies available at the end
of the day
Discussion today
Formal feedback by 29 February
THEMES for the day
- Where the consultation paper asks for an opinion – options are
genuinely open e.g. flow controllers, advertising etc.
- Where the consultation paper doesn't ask for an opinion – options
are constrained by ministers’ decisions, e.g. 80% cost recovery.
- WELS staff to talk as little as possible, we’d like discussion and
dialogue with you.
- Written feedback after this session encouraged for clarity and, if
necessary, confidentiality.
How we got here
2009-10
Independent Review 2010
-Lots of good things noted
-Lots of improvements suggested
-Scheme underfunded
2010-11
Session 1
Underfunding reasons
- Size: many times bigger than expected
- Free additions to FoM: registration effort with no revenue
- Inflation: ($1500 then = $1200 now)
- 5 year registration: ‘out of sight, out of mind?’
Session 1
Decision by State, Territory and
Commonwealth Ministers (SCEW)
30 November 2011
- Strategic Plan 2012-15 approved
- Joint government response approved
- 80% set as industry cost recovery level
We have the ‘what’
Consultations now are about the ‘how’!
Session 1
Timeline from here
Parliamentary Sittings 2012
Session 1
Session 2
Registration changes 1
Registrations are to be annual, regardless of what fee structure is
finally adopted.
- Keep database current and relevant
- Increased flexibility
- May assist cash flows and forecasting; vital when fees are major
component of income
- Option to pay for more than 1 year
Registration Changes 2
Session 2
• WELS running costs 11% next year
• Requires new interface with improved database to make
registration quicker and easier
- Automated form filling, uploading pre-populated data
- Re-registration by self-certification
- Risk based audits
•
All products to be registered, so they can be identified in
database. Unique identifier.
• No additions/free registrations. Maximum of 15
items/application (options 2,3 and 4)
• Products that are identical, except for brand, must be registered
under each brand
Fee options
Session 3
1. ‘BaU’ (except fees are annual) - $3400
2. Fee/application of $700, a maximum of 15 products in same
product category with same:
-
Brand
Star rating
Covered by same test report(s) or declaration
Label
3. Fee/ application of $630, a maximum of 15 products in same
product sub-category [table 4.2, pg 12] with same:
-
Brand
Star rating
Covered by same test report(s) or declaration
Label
4. Every product/model pays a fee of $80
Annual fee comparison
Amounts in (red) are if fee crediting is applied
How fee crediting would work I
•
•
When the new scheme starts, existing registrations will have periods of < 5
years, < 4 years, < 3 years etc to run
Why not let them run their course?
-
•
Any registrants who registered after ~2008 could ‘wait out’ the scheme
Won’t meet cost-recovery target
Unfair for new registrants (would carry almost all costs)
Would require higher fees all ‘round
If you remain registered under the ‘old scheme’, do new provisions apply to you?
Accordingly new fees need to be paid from ‘Day 1’
Crediting Amounts
Registered 5 years ago - $0
Registered 4 years ago - $300
Registered 3 years ago - $600
Registered 2 years ago - $900
Registered 1 years ago - $1200
Registered
Registered 1 years ago - $1,2003333
How fee crediting would work II
Existing Scheme
2007
2008
2009
2010
New Scheme
2011
5 years ago
Year 1 Year 2
Year 3
Credit $0
4 years ago
Credit $300
3 years ago
Credit $600
2 years ago
Credit $900
1 year ago
Credit $1,200
How fee crediting would work III
• We estimate if crediting of fees proceeds approx $1.0m is involved
• This is a cost to the scheme, because previous history of underfunding
means no spare money in the scheme
Total scheme costs
Cost recovery
target (no
crediting)
Cost recovery
target (crediting)
Year 1
Year 2
Year 3
3 year total
$1.85m
($2.85 m)
$1.91m
$1.96m
$5.72m
($6.72m)
$1.48m
$1.53m
$1.57m
$4.58m
$1.48m +
$1m
$1.53m
$1.57m
$5.58m
What is a model? I
Why identify each model?
Principles
• WELS is to provide consumer information
- All models and variants should be in the database and be
easily found in that database, with a unique identifier
• Number of models must be predictable so as to set
an accurate fee
• Simplicity – ‘rules to register’ are easy to
understand and administer
What is a model? II
•
Options 2, 3 and 4 require clarity on this issue
Starting point
- To be on one application (2&3) all items have:
–
–
–
–
Same star rating
Same performance
Same brand
Covered by same test report(s), or declaration
Session 3
What is a model? III
•
Taps, for example, have many variations that don't effect
water consumption or overall performance
•
Session 3
Handle style and length
Finish etc
Does this mean each of all such possible combinations is a
separate model?
–
–
For entry in database? – yes – for consumer information and
compliance
Pay for each possible combination? – Still under discussion
A tap example
•
The ‘Wombat’ tap range comes in:
•
•
•
chrome and white finishes
7 spout types (some will effect performance)*
8 handle types
There are 2 (finishes) x 7 (spouts) x 8 (handles), or 112
combinations
These 112 combinations, in groups of 15, could = 8
applications
If finish (for example) doesn’t count as a variant = 4
applications, etc
Session 3
Session 3
Examples of minimum annual fees
Session 3
Example of rebranding and effect on fees
Consolidating Registrations
- aligning expiry dates Year 1
Year 2
Year 3
Session 3
Session 4
Compliance and Enforcement
[email protected]
Session 4
Early Approach
• WELS compliance focus in early years of the scheme was on information
and education visits
• Appropriate at that time
Maturing
Scheme
Session 4
Current Approach
Since 2010, Compliance action:
• Structured program of inspections - Australia wide
• Dedicated teams of compliance inspectors
• More than 500 inspections have been conducted covering all States and Territories
Enforcement action:
• Several warrants exercised and 14 EUs in place.
• Use of EUs reflects strong emphasis on supporting suppliers to achieve compliance
Offences carry criminal penalties
• Penalties include: Infringement notices, prosecutions and injunctions
Session 4
Future Approach
•
Compliance Inspections will focus on broader range of suppliers including:
–
–
–
•
•
Wholesalers/distributors
Internet sales
Developers e.g. Multi unit sites, display housing
Criminal penalties will remain
Civil penalties will be introduced
–
–
–
Lower burden of proof
Efficient and more cost effective
Proof of registration when a product is supplied
Other compliance responses:
• Orders requiring new corrected labels, suspension and deregistration of
products, directed audits.
• Requirement to notify downstream suppliers of the registration and providing
evidence of registration.
Session 4
Check Testing 2010-11
Proficiency testing
•
•
Round robin for showers and lavatory equipment
Testing is now completed and review of report underway
Design of a formal check testing for showers and lavatory equipment
•
•
Developing procedures and statistical validity criteria for check testing
Will be similar to Equipment Energy Efficiency program (E3)
–
–
WELS to pay for first screen test
For adverse results, registrant can either accept result or pay for follow up check testing in an
approved facility
Other Check Testing
•
•
Implementation of formal check testing for showers and lavatory equipment
Proficiency testing and check testing of other products will be considered
Session 5
Advertising
Session 5
Current Advertising Requirements
•In Annex B.1 of AS/NZS 6400, not in legislation
•Degree of confusion – all in one place?
Session 5
WELS Review
Recommendation 7.6 of Independent Review
Advertising not be required to display WELS information.
Joint Governments’ Response
Not agreed – benefits seen in advertising
Session 5
What is being considered
- Clarify through legislation, not the Standard
- Increased compliance activities
- Particular focus on “point of sale” information, including online
Session 6
Grandfathering
Session 6
Current Grandfathering Provisions
Requires improvement
• Provides a fixed 12-month period to move stock when a Standard
changes
• Triggers fee holiday if re-registration is due in that 12 months
Session 6
WELS Review/Joint Government
Response
• Agreed that time to clear stock is appropriate when a Standard
changes
Session 6
What is being considered
• Indefinite grandfathering to clear stock
• However, ‘grandfathered’ stock must remain WELS registered
under the ‘old’ Standard
• Hence, no fee holiday
• Minister can determine date of ‘no further supply’
Session 6
What about when a registration is
not renewed?
• Still an offence to supply an unregistered product
• Proof of registration is required when you supply a product
• Evidence of registration right through supply chain
Session 6
Other
• Mandatory registration for flow controllers?
• Extending period for holding of evidentiary material?
• Publicising breaches of the WELS Act?
Session 6
Other
• Any ‘person’ rather than a ‘manufacturer’ to apply for
WELS registration?
• Clarification of supply
• WELS future merger with E3 and WaterMark?
• Removing Gazettal requirement