WELS REVIEW Stakeholder Forums - Brisbane 14 February 2012 -Sydney 16 February 2012 -Melbourne 17...

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WELS REVIEW Stakeholder Forums - Brisbane 14 February 2012 -Sydney 16 February 2012 -Melbourne 17 February 2012

Transcript of WELS REVIEW Stakeholder Forums - Brisbane 14 February 2012 -Sydney 16 February 2012 -Melbourne 17...

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 toolsConsultation paper

FAQ paper

This presentation

Discussion today

Formal feedback by 29 February

hard copies available now

www.waterrating.gov.au/

hard copies available at the end of the day

Session 1

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 hereSession 1

Independent Review 2010-Lots of good things noted-Lots of improvements suggested-Scheme underfunded

2009-10 2010-11

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 hereParliamentary Sittings 2012

Session 1

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

Session 2

Registration Changes 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

Session 2

Fee options 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

Session 3

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

2007 2008 2009 2010 2011 Year 1

Year 2 Year 3

Existing Scheme New Scheme

5 years agoCredit $0

4 years ago

3 years ago

2 years ago

1 year ago

Credit $300

Credit $600

Credit $900

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

Year 1 Year 2 Year 3 3 year total

Total scheme costs $1.85m ($2.85 m)

$1.91m $1.96m $5.72m($6.72m)

Cost recovery target (no crediting)

$1.48m $1.53m $1.57m $4.58m

Cost recovery target (crediting)

$1.48m +$1m

$1.53m $1.57m $5.58m

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? I

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

- 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

Session 3

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

Examples of minimum annual feesSession 3

Example of rebranding and effect on feesSession 3

Consolidating Registrations - aligning expiry dates -

Year 1 Year 2 Year 3

Session 3

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

Session 4

Maturing Scheme

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 2010-11Proficiency 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 4

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 5

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

Session 6