Te Rā Whakamana: Stopping Good Policies From Becoming Disasters

22/07/2025

Te Rā Whakamana is a series that follows what happens after policy is announced: it focusses on the long tail of delivery, where systems succeed or fail in ways the drafters never intended. This week turns to regulation. The Regulatory Standards Bill sparked fierce debate, but most of it circled the politics of deregulation rather than the machinery that makes regulation work. That blind spot matters. For all the noise about ideology, the harder truth is that regulatory systems rise or collapse on delivery. Derek Gill’s 2016 work on regulatory coherence maps that terrain, showing how design without implementation capacity becomes fragility: as the leaky homes crisis made brutally clear.

The Regulatory Standards Bill drew a wave of public submissions, many of which were passionate and some astute. Most targeted the Bill’s political logic, and its potential to entrench deregulatory preferences, impose economic cost-benefit framings, and freeze the regulatory environment in favour of those who could afford to insulate their interests. It has been described as an attack on Te Tiriti, a move against social protections, and a technocratic trap. But almost none of them engaged with the deeper question: what is a regulatory system actually for, and what makes it work?

That question has led me back to Derek Gill’s 2016 chapter, Regulatory Coherence: The Case of New Zealand. It’s not an advocacy piece. It doesn’t argue left or right. What it does is map the actual machinery that holds our regulatory system together and exposes where that system breaks down. In a political moment so concerned with controlling regulation, it’s worth pausing to ask whether we even understand how regulation functions in practice. Gill’s work doesn’t just explain regulatory management. It makes visible the consequences of getting it wrong. This essay is situated within that kaupapa (Gill, 2016).

Gill opens with a simple premise: Aotearoa has long been seen as a regulatory frontrunner, but that reputation masks a deeper tension between design and delivery. We’ve been world-class at imagining reform, not always at implementing it. Policy coherence has too often been mistaken for delivery coherence. That distinction sounds technical. It isn’t. Only fools think a good policy idea is always an easy-to-deliver initiative.

The leaky homes crisis makes this distinction painfully clear. In 1993, the government replaced its standards-based building code with a new performance-based regime. The goal was innovation. Builders could use alternative solutions, new materials, and modern methods, as long as the end result met performance outcomes. It was supposed to free up the sector, reduce compliance costs, and enable growth. What it did was create a fragile system without the expertise, guidance, or monitoring needed to handle the risks it unleashed.

Homes were built with untreated timber and sealed claddings that couldn’t breathe. In our wet climate, water entered the walls and was unable to escape. Councils, tasked with approving these new designs, lacked the technical capability to assess them. The Building Industry Authority, which should have played a central oversight role, narrowed its focus and failed to detect the problem. Builders followed market demand. No one watched what happened next. By the early 2000s, the country was facing billions of dollars in weathertightness failures: catastrophic rot hidden inside thousands of family homes.

What failed wasn’t just the regulation. It was the system wrapped around it. A regime designed to enable flexibility had no safeguards to detect when that flexibility turned to danger. There was no field-level monitoring. No early warning system. And no clear lines of accountability once things began to collapse. The regulatory instruments looked modern. But the delivery architecture was hollow. As Gill puts it, the failure was not the use of performance-based regulation itself, but rather the absence of a strategy to monitor how that regime performed in practice (Gill, 2016, pp. 195–197).

It’s worth noting that during the same period, another regulatory reform quietly succeeded. Vehicle licensing was overhauled to reduce inspection burdens for private vehicles. The change was relatively unremarkable in policy terms, but it was handled with care. Agencies coordinated. Inspectors were engaged early. Communication was clear. A staged rollout helped avoid system shocks. The result? A regulatory change that stuck. Not because it was visionary, but because it was delivered with coherence. The contrast is instructive.

This is the core of Gill’s contribution. It’s not enough to ask whether a policy is well-designed. We have to ask: who will implement it? What capabilities do they have? What feedback loops are in place? What happens when incentives pull in the wrong direction? These are delivery questions. And they’re the questions our regulatory system has too often neglected in favour of abstract coherence: the tendency for policy advisors working in regulatory systems to make an idea look good at the centre, regardless of what happens at the edge.

The lesson here isn’t to avoid reform. It’s to treat delivery as a system in its own right, not as an afterthought. The Regulatory Standards Bill, and the debate it has provoked, risks repeating the same mistake: believing that regulation is a matter of design alone. But as Gill shows, what matters is what happens after the idea is approved. Who carries it? Who resists it? Who bears the consequences when it fails?

So we return to where we began. Derek Gill’s chapter doesn’t simply offer a critique. It offers a map. One that helps us see the difference between intent and impact, between elegant policy and durable outcomes.

In a political environment that increasingly treats regulation as a problem to be restrained, his work reminds us that regulation is not neutral, but neither is it simple. It is a system of power, responsibility, capability, and risk.

Kei a koe te mihi, Derek – this is the kind of work that holds.

Reference

Gill, D. (2016). Regulatory coherence: The case of New Zealand. In D. Gill & P. Intal Jr. (Eds.), The development of regulatory management systems in East Asia: Country studies (pp. 175–227). Jakarta: ERIA (Economic Research Institute for ASEAN and East Asia).