Cost recovery implementation statement 2019-20

1.1 Purpose of Cost Recovery Implementation Statement

This Cost Recovery Implementation Statement (CRIS) provides information on how the Australian Maritime Safety Authority (AMSA) implements cost recovery for the provision of infrastructure and regulation to support safe ship navigation in Australian waters, environmental marine protection, seafarer and ship safety, ship registration, and related marine services under both the Navigation Act 2012 and National System for domestic commercial vessels. It contains financial results for 2018–19 and budget forecasts for 2019–20 and the three following years.

This document provides key information on the application of cost recovery activities, including financial and non-financial performance. It assists stakeholders to understand AMSA’s costs, which strengthens accountability, provides transparency, and demonstrates compliance with CRGs and the Regulatory Charging General Policy Order.

1.2 Description of the regulatory charging activity

1.2.1 Policy background

Our policy outcome is to ‘minimise the risk of shipping incidents and pollution in Australian waters through ship safety and environment marine protection regulation, and to maximise people saved from maritime and aviation incidents through search and rescue coordination².

2. Department of Infrastructure, Transport, Regional Development and Cities, Portfolio Budget Statement 2019-20, Budget Related Paper No. 1.12, page 80.

1.2.2 Description of the activities

Regulatory charging activity outputs are summarised in Table 1, with the funding mechanism contained in brackets.

Table 1: Descriptions of AMSA’s regulatory charging activities

^{3. AMSA does not provide navigational aids within port boundaries; these are the responsibility of the port operator.}

This CRIS does not cover:

• Levy-based regulatory activities of the National System for domestic commercial vessels.

On 2 July 2018, the Australian Government announced an additional $10 million funding to delay charging levies to industry for the first three years of service delivery. These activities will continue to be funded by a combination of Commonwealth appropriations and by States and Northern Territory jurisdiction contributions—total funding by all governments is now $112.4 million over ten years.

 

The additional time will enable AMSA to engage with industry on a range of matters as part of a review of National System operating costs and funding, scheduled to commence in 2020-21. This will include extensive stakeholder consultation on service delivery and will provide an opportunity to address industry concerns, including:

• The additional time will enable AMSA to engage with industry on a range of matters as part of a review of National System operating costs and funding, scheduled to commence in 2020-21. This will include extensive stakeholder consultation on service delivery and will provide an opportunity to address industry concerns, including:
  • most effective and efficient way to deliver services
  • opportunities to reduce costs without comprising safety, and
  • ways to reduce administrative burden.
• Search and rescue coordination services for maritime and aviation incidents, which are funded by government budget appropriations.⁴
• Funding arrangements of shipping and offshore petroleum industries and the International Oil Pollution Compensation (IOPC) fund^5.
• Externally funded programs sponsored by various government departments for the provision of specific maritime related services.

4. The Government reaffirmed its initial policy, upon the establishment of AMSA in 1991, through the Strategic Review of Search and Rescue Service and pricing study in 2001 that search and rescue activities will remain funded from taxpayer funded budget appropriations.

5. The Protection of the Sea (Oil Pollution Compensation Funds) Bill 1992 essentially established the procedure by which entities are required to provide details of oil receipts to the IOPC fund through AMSA - this is not a cost recovery arrangement.

1.2.3 Appropriateness of cost recovery activities

It is government policy that when an individual or organisation creates a demand for a government activity, there should generally be a charge for the provision of these activities.

Participants in the commercial shipping industry pay the costs attributable to the provision of navigational infrastructure within Australian waters, environmental marine protection, seafarer and ship safety, marine services under Navigation Act 2012, ship registration, and National System for domestic commercial vessels.

Regulatory functions in many instances may be applicable across AMSA’s various activity outputs, such as emergency towage capability and work health and safety. Over time, a clearer demarcation of the costs to be borne by industry will be better understood.

Government policy is not to charge a levy for National System for domestic commercial vessel activities until afore mentioned regulatory review is undertaken in 2020–21, assessing costs, funding options, and reducing administrative burden to industry.

Further, Government continues to funds search and rescue services attributable to community service obligations to the broader community through budget appropriations.

1.2.4 Stakeholders

The principle stakeholders for regulatory charging activities in this CRIS are:

The principle stakeholders for regulatory charging activities in this CRIS are:

• ship owners and operators, and their associated agents – international vessels (~5,800) and domestic commercial vessels (~27,000)
• seafarers and coastal pilots—international (~60,000) and domestic (~66,000)
• accredited marine surveyors (~250)
• registered training organisations
• Commonwealth, State and Northern Territory agencies, and
• the Australian community.

2.1 Government policy approval to cost recover regulatory activities

The Explanatory Memorandum of the Australian Maritime Safety Authority Act 1990 states the Government’s intent that AMSA ‘will run its commercial services on a self-funded basis; services which cannot be provided on a self-funded basis (search and rescue coordination services) will be paid by the Commonwealth’.

AMSA recovers costs from participants in the commercial shipping industry in adherence with Public Governance, Performance and Accountability (Charging for Regulatory Activities) Order 2017, which refers to the Australian Government Charging Framework and CRGs.

AMSA’s regulatory charging activities are authorised by the application of Australian Commonwealth legislative instruments, in particular Part 5, Division 2 of the Australian Maritime Safety Act 1990, which provides for the charging of levies and fees with references to the following Acts:

• Navigation Act 2012
• Marine Navigation Levy Act 1989
• Protection of the Sea (Shipping Levy) Act 1981
• Marine Navigation (Regulatory Functions) Levy Act 1991
• Shipping Registration Act 1981

Table 2: AMSA’s broad activity output listing

Operational targets of these activity outputs are detailed in the Annual Performance Statements of AMSA’s Corporate Plan, which describes the reportable measurements in achieving AMSA’s policy outcomes. A summary is provided in non-financial performance (Section 7B).

3.1.2 Business processes

Levy-based activities

Levy-based regulatory charging activities relate to the provision of a total function (statutory regulations) as opposed to transactional business processes; the costs for delivering these activities are not on a transactional basis, rather driven by the support to achieve overall activity output outcomes and non-financial performance targets.

Fee-based activities

Driven by distinct business processes, fee-based regulatory charging activities support specific regulatory functions to which the fees relate. Generic business processes for AMSA’s fee-based activities include:

• receipt and review of an application, including initial engagement and ongoing consultation with the applicant
• undertaking technical assessment, with a decision made by a delegate, and
• processing and issuing a certificate, license or approval.

In practice, administrative business procedures for the receipt, review and issue are broadly similar across fee-based charging activities. However, time and effort (and associated costs) for technical assessments and decisions vary between the types of outputs and on the complexity or nature of the application.

3.2 Costs of the regulatory charging activities 

AMSA applies an activity-based costing allocation methodology to determine costs for activity outputs and regulatory charging activities. This holistic approach incorporates the entirety of its cost base, in accordance with the Financial Management Information System (FMIS), and allocates these costs to activity outputs based on estimated time and effort, and drivers. An illustration of the methodology applied in AMSA’s costing model is depicted in Appendix 1.

Costs are classified as either direct or indirect (overhead). These are reviewed on an annual basis to determine operational requirements against expected demand and estimated revenue in order to ascertain efficiencies (or savings) that may be achieved.

The approach to set budgets and to estimate actual expenditure aligned with source funding appears efficient and effective. Nevertheless, AMSA is commencing a process to benchmark costing methods with other domestic and international government entities that provide similar regulatory activities to the non-government sector. This will take time to develop, but this is identified as an area for improvement.

3.2.1 Changes to costing model techniques

In 2018­–19, and in response to the findings identified in Australian National Audit Office performance audit report, AMSA implemented improvements to its costing model techniques, including alignment of costs to individual outputs, developing more accurate cost drivers for corporate functional costs, refined direct costs, and allocated corporate overheads across all activities based on normalised revenue estimates.

Normalised revenue was used as the driver for corporate overhead allocations on the assumption this basis more accurately reflects the level of support provided by corporate support, governance and executive functions. This method is more accurate than allocation based on direct staffing levels, which inadvertently allocates a larger share of overheads to people-intensive outward facing activities, despite being more process driven and consuming less executive and governance overhead. This involved an analysis of trends in revenue estimates based on expected drivers, such as ship arrivals trends.

Two costing models were developed. To facilitate the collection of data for inputs into the first costing model, an analytical activity-based costing allocation approach was developed, with business line managers providing inputs for the allocation of time and effort for staff and supplier costs into sub-activities.

The second model only involved fee-based activities. A program was undertaken to capture timesheet information from specific business units over an eight-week period. Information gathered also included estimated time to complete each individual fee-based activity from business line managers. These data, combined with actual volumetric data, developed a fee-based bottom-up cost model, with an overhead rate applied.

Differences between models for fee-based activities were identified, with costs in the first model being higher. The excess was tested and determined to be levy-funded regulatory framework effort, with costs assigned as such.

As part of its continuous improvement strategy, AMSA is in the process of investigating and understanding costs that underpin fee-based activities. This will involve more granular costing at the business processes level.

For the next costing model development (2020-21 budget), AMSA is developing a zero-based and activity-based budgeting exercise, which will allow the model to be refined and costed using a bottom-up approach to AMSA’s regulatory activities. The development of this model will list current and new activities for service delivery, rank these activities, identifying resources required, aligning costs to activities, set a procedure for the allocation of corporate functions, and develop key performance indicators for discussion with external stakeholders.

3.2.2 Nature of costs 

The nature and make-up of costs vary considerably across AMSA’s regulatory charging activities. For example, for the provision of aids to navigation there is an extensive capital cost component (depreciation and amortisation), with consistently high operational maintenance costs, reflecting the hostile weather and corrosive environments in which these assets operate.

In contrast, seafarer and ship safety regulations (for both levy and fee-based activity outputs) is labour intensive and as such has a high staff cost component. Activities with a large staffing level require a higher proportion of property operating expenditure and ICT overheads compared to activities that have minimal labour inputs—refer to overhead costs (Section 3.2.4).

3.2.3 Direct costs 

Direct costs are those costs directly and clearly attributed to activities based on estimations of resource requirements for the delivery and provision of statutory and regulatory obligations. These costs may include employee costs, suppliers, and depreciation and amortisation.

Direct staff costs are allocated to activities based on an analysis, undertaken by business unit managers, of staff utilisation to achieve operational outcomes. This analysis provides and validates estimated time and effort requirements of staff assigned to each direct activity.

Direct supplier costs are assigned to activities based on an analysis of the nature of expenditure, validated by business unit managers. Supplier costs include travel and transport costs, materials and services, communication, and administrative expenses.

3.2.4 Overheads

Overheads include costs that can be either be, directly attributed to staffing levels for activities, such as property operating expenditure and information technology costs, or costs that cannot be attributed to an activity, such as corporate services and executive function support.

AMSA’s overheads are classified into the following categories (narration of the costs and their treatment in the costing model is provided):

1. Property operating expenditure (POE)

The nature of AMSA’s policy outcome requires the provision of maritime infrastructure in the form of aids to navigation, stockpile facilities for marine environmental protection and search and rescue functions, and inventories for environmental emergencies, as well as an obligation to maintain a regional presence across Australia. This corresponds to a sizeable property footprint and associated operational expenditure.

These overhead costs are allocated to either business units based on occupancy rates for each location (for offices and remote area residential property), or directly to activities (for storage and aids to navigation).

2. Information Technology (IT) and communications

This covers software licensing and maintenance not directly attributed to activity outputs, as well as outsourced IT network and desktop support services, and general telecommunication expenditure not directly attributable to an activity.

Costs are assigned to business units based staffing level proportions.

3. Corporate support and executive functions

Determined with reference to an analysis and estimations undertaken by business unit managers, these costs predominately consist of corporate services (IT staff costs, communications, human resources, finance, and governance), and executive functions support, including Board, and legal services not directly attributable to an activity output.

Allocated to activity outputs based on revenue earned and normalised to consider the level of time and effort provided, and then to activity groups by direct staffing levels, after divisional support costs are assigned.

Table 3 contains the corporate support and executive function overhead rates applied for 2019–20.

Table 3: Corporate overhead percentage allocations to outputs for 2019–20

Further information is provided in key cost drivers and assumptions underlying the model (Section 3.2.7).

3.2.5 Capital costs 

Depreciation and amortisation expenditure is a good representation of AMSA’s capital costs, and used to determine capital expenditure requirements for the replacement and enhancement of assets. These costs are either attributable directly to the relevant activity, where there is a direct link, or on the overhead basis noted in overhead costs (Section 3.2.4) dependent on the overhead classification.

3.2.6 Attribution of costs to non-charging activities 

Staff providing regulatory charging activities may also undertake other activities funded by either government budget appropriations (search and rescue coordination services and levy-based National System activities) or Australian Government agencies for targeted externally funded maritime related programs (externally funded programs).

Costs for non-regulatory charging activities are largely identified during a detailed activity analysis by business unit managers, with overheads allocated to these outputs using the same process as noted at 3.2.4 above.

3.2.7 Key cost drivers and assumptions underlying the model 

AMSA’s direct costs for regulatory charging activities is ~79.8%, with overheads being ~20.2%, this is summarised in Table 4.

Table 4: Cost category break-down of regulatory charging activities for 2019–20

Direct costs are broken down further into cost types, staff (~33.0%), suppliers (~56.7%), and depreciation (~10.3%).

For staff costs, the driver is the time and effort spent on an activity, whereas for direct supplier costs the driver is the contracted service agreements for the provision of services, such as aids to navigation maintenance. However, this largely depends on the nature and cost of the activity, as mentioned in nature of costs (Section 3.2.2).

Assumptions underlying the model include:

• normalised revenue proportion is a reflective indicator of actual time and effort by  corporate support and executive functions for overhead allocations, and
• capital costs is represented by depreciation and amortisation since these reasonably reflect the costs associated with asset replacement and enhancement.6

In determining the staff and supplier cost levels, AMSA forecasts the expected level of demand for regulatory charging activities as part of its annual budgeting processes. This process is based on historical data and trends, consultation advice, understanding known economic factors, and thorough communication with principle stakeholders.

3.2.8 Cost estimates for 2019–20 

Estimated costs for providing AMSA’s regulatory charging activities, broken down into direct average staffing levels (ASL), direct costs and overheads, are set out in Table 5.

Table 5: Breakdown of costs estimates for 2019–20

*     Does not include non-regulatory charging activities; only direct regulatory charging activities.

**   Consists of various activities considered minor (e.g. individual costs <$1.0 million), except where noted.

3.3 Design of regulatory charges 

Regulation of international and domestic commercial shipping is complex, with a wide range in the variety of vessel types, manning levels, competency requirements, and handling of various cargoes.

From 2013–14 to 2018–19, the number of levy liable visits under the Navigation Act 2012 to Australian ports by applicable foreign-flagged and domestic coastal trading vessels has remained steady, with a slight increase from ~10,000 per annum in 2013-14 to ~10,500 in 2018-19. However, total net registered tonnage volumes (the basis for collection levies) have steadily increased; signifying larger vessels are visiting Australian ports.

The majority of vessel type visits for 2018–19 continues to be bulk cargo carriers (iron ore, coal and general) (~79.6%), with liquid product and gas tankers (~8.3%), and container vessels (~5.6%) largely making up the balance. AMSA notes that over this period that the proportion of liquid product and gas tankers has been steadily rising, corresponding with Australia’s increase in gas exports.

The average number of port visits during each levy payment period (i.e. three months) varies depending on the vessel type and cargoes, with bulk cargo vessels averaging around one to two visits per levy payment period and container ships around five to six.

These factors mean that any projections of expected growth (or reductions) in demand for regulatory charging activities must consider the complex relationships within the commercial shipping industry.

3.3.1 Charging structure 

The design of AMSA’s regulatory charging activity outputs considers whether a service is provided to an individual entity (where costs can be reasonably attributed to that entity) or whether the activity involves a group of entities (provided to the commercial shipping industry and the broader community).

AMSA applies a ‘user pay’ principle for regulatory charging activities. Navigational infrastructure (Marine Navigation Levy) and seafarers and ship safety under the Navigation Act 2012 and other Acts (Regulatory Function Levy) is charged against vessels that use the national network of integrated aids to navigation and traffic management measures in Australian waters and are subject to safety regulatory activities. Environmental marine protection (Protection of the Sea Levy) is charged against vessels that have the potential to be polluters of the marine environment. Fee-based activities are charged for performance, on the application or request of, a particular individual or organisation, which receive or use the benefits.

AMSA’s broad charging structure is shown in Table 6.

Table 6: Charging structure

Levy-based activities

The commercial shipping industry pays levies on non-exempted vessels⁷ that are twenty-four (24) metres or more in tonnage length, with the rate based on a vessel’s net registered tonnage (NRT), with environmental marine protection output charged for vessels that also carry ten (10) or more tonnes of oil on board⁸ with a minimum amount payable of $10.

A summarised Levy Ready Reckoner is shown in Table 7.

Table 7: Levy Ready Reckoner

* Schedule of levy rates are contained in each respective levy legislative instruments. 

International vessels are liable for levies on either the day of arrival to an Australian port, or where the vessel remains in Australia and not paid the corresponding levies in the previous three months, the day after the end of that period. For Australian coastal trading vessels, unless the vessel is out-of-service, levies are payable at the start of each quarter.

AMSA’s methodology for charging levies is derived from historical predecessors, as well as international standards where banding by net registered tonnage is considered common practice for the commercial shipping industry. Levy rates within these bands are adjusted periodically, with the last change occurring in 2014–15.

7 There is a list of exemptions contained in the Marine Navigation Levy Collection Regulations 2018, Marine Navigation (Regulatory functions) Levy Collection Act 1991, and Protection of the Sea (Shipping Levy) Regulation 2014.

8 There will be situations where vessels exempted from both the Marine Navigation Levy and Regulatory Function Levy may be liable for the Protection of the Sea Levy. Generally, these vessels include fishing, religious charitable, non-for-profit organisation, or research vessels.

Fee-based activities

Comprises assessments of applications, inspections and surveys undertaken, registrations, conduct of examinations, and accreditations of non-government service providers. These activities are either, average time and effort requirements and associated hourly rates of labour and overheads costs, or fixed rates.

Fixed fees are applied to those regulatory activities where the range of typical delivery times do not vary significantly from the standard average time. Where there are wide variations, indicated by significant divergences from the standard deviation, the relevant charge is based on an hourly rate, plus any reasonable unavoidable travel costs. These travel costs may be flights and accommodation, where services are provided at locations remote from AMSA’s regional office⁹, or motor vehicle travel rates where vehicles are used for the mode of transport to and from offices.¹⁰

For 2019–20, the hourly rate for services provided under the Navigation Act 2012 will remain at $272, with national system fee-based activities rate increasing to $241 (from $238) in accordance with indexation provisions within the regulation. This is an increase of 1.3%.

The current schedule of fees-based regulatory charging activities is included in Appendix 2. Charging rates are also published on AMSA’s website.

3.3.2 Revenue estimates

Revenue estimates for 2019–20 (Budget) and the three forward estimates is summarised in Table 8, which corresponds with the 2019–20 Portfolio Budget Statement.

Table 8: Revenue estimates

3.3.3 Review of charging structures

AMSA is currently at the start of a comprehensive all-inclusive review of its regulatory charging activity mechanisms, structures and rates. The following specific items have been identified as commencing, or will commence within the next couple of financial years:

• Develop a zero-based and activity-based budget for 2020–21, which will allow the costing model to be refined, using a bottom-up approach to AMSA’s regulatory charging activities. This exercise will list business processes for service delivery, rank these processes, identify resources required for delivery, align costs to activities, set a procedure for the allocation of corporate support functions, and develop key performance indicators for consultation with external stakeholders.
• Portfolio Charging Review, which is a legislative evaluation exercise conducted at least every five years by Departments of State. It will encompass all AMSA’s existing regulatory charging activities, as well as the potential for charging new (or discontinuing current) activities in the provision of goods and regulatory activities to the non-government sector.
• Assess levy cost-drivers to approximate levels of resources used in producing the activity output, with the expectation to demonstrate a linkage between the level of effort and the output. This work is currently in progress, with initial findings indicating that net tonnage may be an appropriate driver of effort. However, work is still being undertaken to finalise AMSA’s conclusions, and will include stakeholder consultation on any proposed changes.
• Assess whether fee-based activity outputs are being delivered in the most effective and efficient way, at minimal costs, and whether industry can fully absorb efficient costs of service delivery.
• Review hourly and fixed rates of fee-based activities under the Navigation Act 2012, Shipping Registration Act 1981, and the National System for Domestic Commercial Vessels. Where similar personnel, expertise, and services are being provided charge-out rates should align.
• Investigate an indexation strategy (if applicable) on regulatory charging activities, reducing the need to regularly revise charge-out rates and reduce inflationary pressures on costs.
• Work with industry and government on an agreed level of maintenance and utilisation of regulatory charging reserves to fund specific requirements.
• National system review of operating costs and funding structures, scheduled to commence in 2020–21. This will include extensive stakeholder consultation on service delivery models and will provide an opportunity to address concerns raised during previous consultation rounds.

AMSA will engage widely and extensively with stakeholders providing opportunities for feedback and comments, with provisions to address industry concerns. An ongoing stakeholder engagement strategy will be prepared.

AMSA has implemented internal controls to ensure that costs recovered for regulatory charging activities are measured correctly and are collected on time. In adherence with legislative obligations, an officer of Customs may detain a vessel at any Australian port for any unpaid and outstanding levies, released only after payment is received. This process ensures that the existence of any unpaid levies are consistently at a very low level.

An assessment of regulatory charging activities was conducted using a Department of Finance Charging Risk Assessment. AMSA considers the risk to remain low given no anticipated changes (other than indexation) to current activities in 2019–20.

An examination of identified risks for regulatory charging activities and accompanying mitigation strategies, are detailed in Table 9 below, with additional details provided in AMSA’s Corporate Plan.

Table 9: Risks and mitigation strategies associated with regulatory charging

Communication with stakeholders is an essential part of developing the CRIS, with adherence to AMSA’s Statement of Regulatory Approach.

AMSA published a consultative CRIS on its website and invited specific industry groups and participants to comment on its cost recovery arrangements. The consultation period was over three-weeks, commencing on 16 October 2019 and concluding on 10 November 2019. Industry groups invited to participant in providing feedback included, Domestic Commercial Vessel Industry Advisory Group, Fishing Industry Advisory Group, Shipping Australian Limited, Ports Australia, and Maritime Industry Association – feedback was encouraged.

Key items raised by stakeholders during this consultation period were:

• Financial language used in CRIS is difficult to understand.
• Perceived opinion of not receiving value-for-money in services provided.
• Incorporate within costing models and report on what efficiency measures have been put into place and what efficiency measures are proposed in reducing high staff costs, such as use of IT and technological systems.
• Clearer distinction between domestic and international commercial shipping activities.
• Greater transparency on financial arrangements associated with participation at IMO and regional forums.
• Pursuit of Australia’s national interest at the IMO should be funded by the taxpayer, rather than industry.

Following the consultative period, AMSA responded appropriately.

AMSA is exploring options to implement a specific ongoing cost-recovery external stakeholder engagement strategy that will include performance measures and will involve initial consultation as part of the National System review from 2020–21. Feedback from this process will inform AMSA of potential funding options, which will eventually be put forth to Government for consideration.

Table 10: Financial estimates for regulatory charging activities

As noted, AMSA’s financial estimates do not include levy-based seafarer and ship safety under the National System for domestic commercial vessels. Given the upcoming review of National System operating costs and funding options scheduled for 2020–21, it is not possible to comment on forward years with any degree or level of accuracy. To do otherwise would be confusing and counterproductive.

Reinstated figures for 2013–14 to 2017–18 to align with tables presented in the Australian National Audit Office performance audit - application of cost recovery principles.

Table 11: Historical performance of AMSA’s regulatory charging activities

*    Revenue includes insurance recoveries for aids to navigation assets and environmental emergency pollution responses. There is a delay in incurring expenditure associated with operational costs, which occurs immediately after an incident, and any eventually recovery, which may take up to six years.

**  Expenses in 2018-19 for environmental marine protection includes a $27.1 million provision for clean-up operation costs from a pollution response incident that occurred in June 2018.

As at 30 June 2019, the cumulated balance for regulatory charging activities from 2013-14 to 2018-19 is $17.9 million. After netting off the under-recovery for fee-based and navigational infrastructure activity outputs against the over-recovery of seafarer and ship safety, this balance has been used in part fund the development and implementation of a modern regulatory infrastructure framework applicable for both international and domestic commercial vessels.

Summarised performance targets for regulatory charging activities are provided in Table 12, with specific details contained in Corporate Plan.

Table 12: Performance targets for 2019-20

AMSA has consistently achieved the majority of its performance targets. The results of non-financial performance is reported in its 2019-20 Portfolio Budget Statement and Annual Report.

Although not specific to regulatory charging, AMSA also reports on non-financial performance of National System customer satisfaction, which indicates the level of customer satisfaction with the service delivery by the call centre, and whether their issue was resolved adequately.

AMSA will develop more robust non-financial performance measures specific to regulatory charging activities as part of the National System review in 2020-21, which will include an extensive stakeholder engagement and consultation.

Indicative dates for the updating tasks of the next cost recovery are disclosed in Table 13.

Table 13: Indicative events and forward dates

CRIS approval and change registers from 2016-17 to 2019-20 are provided in Tables 14A to 14C.

This will be updated once the 2019-20 CRIS is approved and published

Table 14A: CRIS for National System introductory fee-based activities (prior to incorporation into 2018-19 consolidated CRIS)

Table 14B: CRIS for National System full service delivery fee-based activities (prior to incorporation into this consolidated CRIS)

Table 14C: CRIS approval and change register

Methodology

The methodology for modelling AMSA’s costs is summarised in the illustration below. It adheres to activity based costing principles, which enables more analysis on the efficiency of activity outputs and/or business processes for cost recovery and other activities. It focuses on cost drivers, which allocates indirect costs to direct costs and then to an output.

There are five principles that support the methodology:

1. 1. Linked to strategic business planning: costing is not just a ‘bean counting’ exercise. It should be linked to the strategic direction and planning of AMSA and inform the Executive at a strategic and tactical level.
   2. Holistic approach: a modelling exercise should include all revenue and operating expenditure, including overheads, other indirect costs, and capital expenditure (capital allowances and/or depreciation), where appropriate. Further, it should focus not just on cost recovery activities, but all activities. This will result in a model that can fulfil multiple demands for costing information.
   3. Comprehensive and consistent: a simple approach that applies consistency in the application of modelling rules across all business areas and activities creates a robust model understood by stakeholders. The development of AMSA’s costing model should occur over a short timeframe with relatively small inputs of resources.
   4. Flexible: it is important to recognise that demands for service delivery change over time, driven by various internal and external circumstances. A costing exercise must be dynamic in nature to evolve with changes to business requirements and circumstances.
   5. Institutionalised as a ‘normal’ function: modelling should be a living database that requires regular updating on a periodic basis. This is successful when the model receives official endorsement with wide stakeholder involvement (internal operational unit, as well as external stakeholder ‘buy-in’). Costing will then become a routine task and a ‘foundation stone’ for improving and reporting on financial performance.

Current schedule of the fee-based regulatory charging activities are listed below, with references to Australian Maritime Safety Authority Fees Determination 2015 and Marine Safety (Domestic Commercial Vessel) National Regulation 2013.

*     National System fee-based activities are subject to annual indexation, calculated in accordance with the Regulation. For 2019-20, an indexation factor of 1.3% is applied, effective from 1 July 2019.

^    These fee-based activities were included in a separate Cost Recovery Implementation Statement of National System for Domestic Commercial Vessel in June 2018.

#    From January 2019, a decision was made to no longer charge industry for this fee-based activity.