Appendix B Assumptions & limitations Key assumptions Costing assumptions The following table summarises key parameters used in developing our industry cost estimate. Table : Summary of Key Parameters Data point Used Comments Total number of food 7,200 Provided by industry stakeholders. and beverage SKUs PwC has assumed a steady uptake over a five year period. While different uptake rates would vary Adoption rate 20% p.a. the overall cost estimate (relating to the time value of money), this impact is likely not material and would not impact PwC overall conclusion. Implementation 5 year period Based on PwC industry survey. period and lifecycle There is no ‘hard and fast rule’ as to appropriate real discount rates. A 7 per cent real discount rate is the default rate used by the Productivity Real discount rate 7% Commission. The Office of Best Practice Regulation cites between 5%-10% in its guidance materials. Global assumptions While it is not within the scope of this engagement to review the implementation and operation of the HSR system, stability and continuity of the implementation and operations of the HSR system is a key assumption of this report. We understand that key implementation and operational plans are/have been developed separately. Clearly, there is risk inherent to any new venture. However, should any of these elements not be presented or sufficiently developed, the likelihood that intended benefits may not be realised could increase. As such, at a minimum, PwC has assumed that implementation and operational planning includes (as appropriate and tailored to scope and size of a voluntary system):
Appendix B Assumptions & limitations Key assumptions Costing assumptions The following table summarises key parameters used in developing our industry cost estimate. Table : Summary of Key Parameters Data point Used Comments Total number of food and beverage SKUs 7,200 Provided by industry stakeholders. Adoption rate 20% p.a. PwC has assumed a steady uptake over a five year period. While different uptake rates would vary the overall cost estimate (relating to the time value of money), this impact is likely not material and would not impact PwC overall conclusion. Implementation period and lifecycle 5 year period Based on PwC industry survey. Real discount rate 7% There is no ‘hard and fast rule’ as to appropriate real discount rates. A 7 per cent real discount rate is the default rate used by the Productivity Commission. The Office of Best Practice Regulation cites between 5%-10% in its guidance materials. Global assumptions While it is not within the scope of this engagement to review the implementation and operation of the HSR system, stability and continuity of the implementation and operations of the HSR system is a key assumption of this report. We understand that key implementation and operational plans are/have been developed separately. Clearly, there is risk inherent to any new venture. However, should any of these elements not be presented or sufficiently developed, the likelihood that intended benefits may not be realised could increase. As such, at a minimum, PwC has assumed that implementation and operational planning includes (as appropriate and tailored to scope and size of a voluntary system):
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