Getting Regulation Right: Being Responsive and Proportionate

28/04/2025

Regulation often gets a mixed reputation.

Some see it as unnecessary red tape, slowing things down and making life harder for businesses and communities.

Others worry that it’s too weak and fails to properly protect people and the environment.

What both views have in common is frustration with regulation that seems disconnected from the real world.

But good regulation doesn’t have to be like this. The best systems are both responsive and proportionate: they adjust to what’s really happening, focusing effort where it counts, and avoiding unnecessary burdens.

At the heart of a responsive regulatory system is the ability to read the situation. That means regulators are not just enforcing rules for the sake of it. They are constantly asking: What is really going on here? What kind of risk is this? What response is likely to make things better?

Sometimes the right move is advice or guidance, helping someone fix a small mistake. Other times, when harm is serious or behaviour is deliberate, stronger action like fines or restrictions may be needed.

Being responsive means regulators do not reach for the same tool every time. They tailor their response to the context and encourage improvement, while still holding people to account when necessary.

Proportionality is just as important. Not every problem needs a big stick. Sometimes a warning is enough. Heavy-handed regulation can discourage innovation, create resentment, and waste time and money, both for those being regulated and for the regulator.

Proportionality is about balance. It is about making sure the effort and cost match the level of risk and the seriousness of the issue. It is about avoiding blanket rules when simple, flexible approaches will do. It is about focusing on outcomes, not just ticking boxes.

These ideas are not just theory. We have seen them at work. The shift in Aotearoa New Zealand’s health and safety system over the past decade is a good example. After the Pike River tragedy, there was strong public demand for change — and rightly so.

The government responded with commitment and built a more modern system that put risk at the centre. It gave regulators clearer powers and stronger responsibilities. It was a decisive move, and in many ways, a needed one.

But like many reforms that follow tragedy, it also overcorrected. The system became heavier and more costly than intended, with the weight often falling on small and medium-sized businesses, community organisations, and sectors where formal risk management is important but where the real risks are modest.

The shift was well-meaning and improved parts of the system, but it edged away from proportionate regulation. In the process, it sometimes treated small-scale or low-risk situations with the same intensity as high-risk industries.

When regulation works well, when it responds to what’s actually happening and scales its response to the problem, everyone benefits. The public is safer, businesses know where they stand, and regulators can focus on what really matters. The health and safety system shows both sides of the coin. The system is now stronger and more capable, but it also shows how easily good intentions can lead to extra burden when proportionality is lost.

The challenge now is to hold on to the progress, while steering the system back toward balance: keeping what works without making everyday life harder than it needs to be.

*In response to messages from readers: no, this is not support for the “no more road cones” campaign. This is support for responsive, risk-based regulation that doesn’t burden small and medium businesses. And for the record, I don’t get the road cone hate. I come from a whānau of road and rail workers — road cones keep them safe.