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Pansy Speak 6 june 2006

Business compliance review nothing more than a charm fest!!!

Can you spot the difference between the following two extracts?

The Government announced its compliance cost work programme in October 2000 with the strategy:

To publish a new business compliance cost statement as part of all new legislation giving business better opportunity to have a say on those costs.

* To establish industry test panels, where necessary, to audit the likely compliance costs and workability of any proposed new regulations.

* To seek the advice of business on ways to reduce compliances through establishment of a Ministerial Panel on Business Compliance Costs.

The review (of regulatory frameworks) will focus on the following issues:

* Strengthening regulatory process disciplines, including the Regulatory Impact Analysis regime.

* Studies of the impact of regulation and compliance on particular sectors - food and beverage, hospitality and retail.

You would be right to think these two extracts are from the same document - but they aren't. The first is from a report issued in 2001 by the previous Commerce Minister, Paul Swain. Striking the Balance was his response to an 11-person business panel set up to recommend ways of reducing compliance costs.

The second extract is from a Cabinet Paper released last month which discusses the Government's latest regulation review.

Not much has changed in five years.

Since 2001, the business community has had a number of reports thrown at them about tackling compliance costs. These include Striking the Balance, a survey by Massey University on business compliance costs perceptions released in August 2003, and various responses to ideas put forward by the business panel - with their final report issued in 2005.

During this time, in October 2003, the Government appointed a nine-person Small Business Advisory Group which has made two annual reports (2004 and 2006), and to which there has been one response from the Government, in December 2005.

So, all in all, a lot of talking has been done with no real change.

The Small Business Advisory Group made its frustration with the Government crystal clear when it gave the Minister of Small Business a rating of 5.3 out of 10. This grade was given because though the Minister had considered their recommendations for growing productivity for small businesses she did little to transform them into real outcomes.

Compliance costs are also a major source of frustration for this group. They have concluded that in the past two years, the Government has introduced 312 new Acts and 875 regulations. It is, therefore, interesting to note that the latest revival of reviewing regulations wants to identify effective "fast track" mechanisms for administrative, legislative or regulatory amendments.

The Small Business Advisory Group made three recommendations to help reduce compliance costs resulting from the new legislation and regulations, and these didn't sit well with the Minister and some government departments. The group wanted to measure and publish the cumulative effect and cost of regulations passed within the previous six months, the cost of all business-related legislation and regulations that come into effect on only one or two pre-determined days each year, and the cost of those that didn't come into force until three months after changes were agreed to.

So why should the outcome of this review be any different than previous ones?

Labour's track record of reducing compliance costs is abysmal. It's no wonder that the New Zealand Herald's editorial labeled the red-tape review as merely tinkering. At the end of the day, the business community has little choice but to co-operate and hope to achieve something - anything - from this latest review. The response from business so far should not be taken by Dalziel as a ringing endorsement. And business beware - this Minister has a reputation for 'shooting the messenger' in her previous portfolios.

Finance Minister, Michael Cullen, was more than happy to allow the Commerce Minister to spin the tired old record again because he doesn't want to be associated with another white elephant. Though Dalziel maybe preaching better communication, her Government's track record so far suggests they won't be getting out of the way of business anytime soon.

It would seem our Australian counterparts have a far better understanding of regulation than our Government does. Gary Banks, Chairman of the Australian Taskforce on Regulatory review, has said: 'Just as regulation naturally develops in response to society's needs, its excesses are largely driven by societal and political pressures. The key factor among these has been a growing and unsustainable aversion to risk'.

He has also called for political leadership in seeing regulation as a means of managing risk and not eliminating it all together, but there are few signs that Labour will heed this all-important message.

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