19. Financial Implications
Government
267. The safety work currently carried out by the Energy Inspection Group of Commerce is funded through levies on electricity and gas. The licensing and auditing processes for both electrical and gas work are funded from fees paid by the workers. The work done by OSH is funded through a levy on employers. There are no additional continuing costs for Government if the conclusions of this report are adopted. However, there would need to be a shift of resources between Vote Energy and Vote Labour so that OSH has an increased ability to investigate electrical and gas accidents in any place of work and carry out other work on worker safety currently done by Commerce. The scale of this activity is estimated to be about $140,000 a year.
268. The removal of Commerce's role of servicing the EWRB is likely to result in restructuring within Commerce. There will also be set up costs for the EWRB (e.g. a computer system). While there will be one-off transition costs that are difficult to estimate with any precision, they are not likely to exceed $500,000. Exactly what the costs are and where these lie between Commerce and any new board will depend upon decisions taken during the implementation stage of this review.
269. There are also one-off costs for the Government in implementing the recommendations of this review. These cover additional consultation with industry, the preparation of legislation and the development of codes and regulations. Total costs are estimated to be about $260,000.
Industry
270. The improvements suggested to the current regime will make processes more effective and less costly for some parts of the industry. (For example the total saving to the supply sector through not having licensing and auditing of workers is about $100,000). OSH may consider it necessary to introduce additional controls but any costs related to these are likely to be lower than the present costs of licensing.
271. The review team estimates that the net savings to industry of the proposed changes could be in the order of $380,000 per year through a reduction in fees and levies.
272. Industry associations are likely to be involved in developing Codes of Practice where these are seen as necessary in their sector. However, industry associations already play an active role in working with Government on issues so this is unlikely to impose any significant additional costs.
273. Separating the EWRB from Commerce should enable the Board's costs to be lower which in turn should result in either a reduction or no increase in the cost of a licence to workers. However, the EWRB would have to fund the complaints assessment process currently funded by Commerce. At present this costs approximately $200,000 a year. Improvements to the complaints process may reduce these costs.
274. Improving the complaints process will reduce compliance costs on companies, workers, complainants and boards involved in the process by removing some complaints from the formal track and reducing the time taken. The other changes suggested in this report will increase the effectiveness of the safety regime which will benefit workers and companies as well as the general public.
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