Comment: Regulatory Standards Bill

13/1/2025

Thank you for the opportunity to comment on the regulatory standards bill. 

As someone involved in regulatory systems and policy, I want to talk about their design and likely impact.

Let me be direct: these proposals lack any supporting evidence that they would improve our regulatory environment. Instead, they demonstrate a troubling pattern of overreach.

The fundamental problems are straightforward:

The proposals ignore how regulation actually works in real life. They would add yet another layer of bureaucracy to our existing system, which already has chief executives, boards, the Public Service Commission, the Ombudsman, and the Regulations Review Committee all playing oversight roles. Adding more complexity to this mix isn’t the answer—it’s part of the problem.

There’s a persistent myth in government that more oversight automatically leads to better regulation. This simply isn’t true. It’s like adding more referees to a rugby match – at some point, you’re just getting in the way of the game. Every new rule or requirement must prove its worth through actual results, not just good intentions, and not just poneketanga theory.

Let’s talk about real costs. New Zealand businesses spend $5.2 billion yearly (2.5% of our GDP) just following rules and managing paperwork. That’s money not spent on growth, innovation, or creating jobs. These proposals would add even more costs that the Ministry hasn’t even tried to calculate.

When new regulations hit a small business owner’s desk, they face three big challenges:

– They have to learn what’s changed

– They have to deal with the stress and uncertainty

– They have to implement the changes while keeping their business running

The Ministry’s proposals show no understanding of these practical realities. They read like they were written by people who have never had to implement regulatory changes in the real world or been regulated parties.

Particularly concerning is that the Ministry’s experts think there are better ways to achieve these goals using existing tools. Yet instead of exploring these options, we’re being presented with proposals that would give central agencies powers well beyond their expertise or capability.

A better approach would be to:

1. Focus on making our current regulatory systems work better

2. Use digital tools to reduce paperwork and compliance costs

3. Have the Ministry work with the Auditor-General to review the cost-effectiveness of each regulatory system – from the point of view of levy and fee payers

4. Keep regulatory oversight with the experts who actually understand each sector and those accountable for the systems.

The Ministry of Regulation should stick to what it knows and can actually deliver. These proposals reach far beyond that, into areas where the Ministry lacks the expertise and practical experience to add value. In fact, given the added complexity and costs, they’re more likely to cause harm than good.

I’ve spent my career studying regulatory systems, and I can tell you that proposals that lack evidence usually create more problems than they solve. These proposals tick all those boxes.

In conclusion, these proposals need a complete rethink. We need solutions based on evidence and real-world experience, not another layer of bureaucratic oversight that will cost businesses more money without delivering clear benefits. If the Ministry of Regulation is to prove its value, it needs to think about systems—not rules. It also needs to think about reducing these systems’ administration and compliance burden, especially where that burden is not achieving a regulatory outcome.

I wish you luck in this work.