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Cost recovery implementation

Updated 4 March 2022

TEQSA’s current fee schedule has been in place since 2012. The government’s decision at that time was to apply partial cost recovery for specific application-based activities.   

Since then, Australian Government policy has changed to require that regulators recover the full cost of the effort required to deliver their services unless there is a clear reason why partial cost recovery should be agreed.

Analysis of TEQSA’s partial cost recovery arrangements in 2017 found that TEQSA’s charges did not accurately reflect the focus and relative costs of TEQSA’s various regulatory and quality assurance activities. In 2017, TEQSA recovered about 25 per cent of the costs incurred in providing its services. Due to fluctuations in TEQSA’s workload, that figure subsequently reduced further. In 2019, TEQSA recovered around 15 per cent of the cost of its regulatory activity.

In the 2018-19 Budget, the Australian Government announced that TEQSA’s annual funding and Average Staffing Level (ASL) would increase and that TEQSA should transition progressively to full cost recovery over a four year period. Increased cost recovery implementation was deferred by the Australian Government on 18 December 2018, and as part of COVID-19 fee relief measures on 14 April 2020 and 30 April 2021.

During 2020, TEQSA developed a new cost recovery model and in 2021 engaged in sector-wide consultation about this proposal. The consultation paper includes key details of TEQSA’s current approach to cost recovery (Sections 3, 4 and 5).

On 25 November 2021, the Government determined that increased cost recovery would now commence from 1 January 2023. 

TEQSA is taking this opportunity to further review the sector’s feedback from 2021 and expects to issue an updated consultation paper in the second half of 2022. 

Further information