Regulation in New Zealand and Australia

Regulation in New Zealand and Australia

Roger Kerr

21 September 2006

 Trans-Tasman harmonisation of regulation should not be pursued for its own sake.

 If New Zealand and Australia both strive for the best regulatory policies, that will produce natural convergence.

 Narrow differences might tip the scales in favour of common rules.

 Deregulation in New Zealand has given way to re-regulation and is making business operation harder.

 In 2005, 9,327 pages of new regulations or Acts were published, the most in New Zealand’s history.

 Major examples of re-regulation include:

– electricity: there have been moves back to centralised control. The chairman of the Electricity Commission has described the industry as being in a “mess”;
– telecommunications: proposals to unbundle the local loop would have to generate benefits of $1500 (in NPV terms) per household to be justified, which seems implausible;
– the labour market, where there is a push towards national awards and more industrial disruption;
– banking, securities market, competition law, building and land regulation.

 The growth-reducing impacts of re-regulation are additional to those arising from rapidly increasing government spending, the unravelling of tax policy, and renationalisation.

 The discipline of regulatory impact statements is inadequate, partly because of the limitations of cost benefit analysis.

 New disciplines, in the form of a Regulatory Responsibility Act, are needed to improve both the stock and flow of regulation.

 A key feature should be a requirement to consider the payment of compensation where the value of property rights is significantly affected by regulation.

See also:

ENDS