Hon David Seymour
Minister for Regulation

Regulation Minister David Seymour has today announced the next steps in the Government’s plan to improve the quality of regulation, as the detailed proposal to pass a Regulatory Standards Bill has progressed through Cabinet.

“New Zealand's low wages can be blamed on low productivity, and low productivity can be blamed on poor regulation. To raise productivity, we must allow people to spend more time on productive activities and less time on compliance,” says Mr Seymour.

“To lift productivity and wages, the ACT-National Coalition Agreement includes a commitment to pass a Regulatory Standards Act. I will be taking the proposed Bill to Cabinet on the 19th of May for approval to introduce it.

“In a nutshell: If red tape is holding us back, because politicians find regulating politically rewarding, then we need to make regulating less rewarding for politicians with more sunlight on their activities. That is how the Regulatory Standards Bill will help New Zealand get its mojo back. It will finally ensure regulatory decisions are based on principles of good law-making and economic efficiency.

“The Bill will codify principles of good regulatory practice for existing and future regulations. It seeks to bring the same level of discipline to regulation that the Public Finance Act brings to public spending, with the Ministry for Regulation playing a role akin to that of the Treasury.

“It requires politicians and officials to ask and answer certain questions before they place restrictions on citizens’ freedoms. What problem are we trying to solve? What are the costs and benefits? Who pays the costs and gets the benefits? What restrictions are being placed on the use and exchange of private property?

“Where inconsistencies are found, the responsible Minister must respond to justify deviation from principles.

“People affected by bad laws will be able to appeal to a Regulatory Standards Board, made up of people who understand regulatory economics. That board will be able to make non-binding recommendations on whether the law was made well, turning up the heat on bad lawmaking. The findings, reasons for any inconsistency, and relevant documents will be made publicly available to ensure transparency.

“If we raise the political cost of making bad laws by allowing New Zealanders to hold regulators accountable, the outcome will be better law-making, higher productivity, and higher wages.

“Under the proposed Bill, government agencies will also have duties to review their regulatory systems.

“Ultimately, this Bill will help the Government achieve its goal of improving New Zealand’s productivity by ensuring that regulated parties are regulated by a system which is transparent, has a mechanism for recourse, and holds regulators accountable to the people.

“The law doesn’t stop politicians or their officials making bad laws, but it makes it transparent that they’re doing it. It makes it easier for voters to identify those responsible for making bad rules. Over time, it will improve the quality of rules we all have to live under by changing how politicians behave.

“In a high-cost economy, regulation isn’t neutral - it’s a tax on growth. This Government is committed to clearing the path of needless regulations by improving how laws are made.”

More about the bill: RSB Support

Notes:

Particular acknowledgements go to Dr Bryce Wilkinson, whose book "Constraining Government Regulation" laid important groundwork for this Bill. Special thanks also go to Dr Graham Scott, Jack Hodder KC, and other members of the Regulatory Responsibility Taskforce, who refined the Bill in 2009.

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