Regulatory Standards Bill

Hon RODNEY HIDE (Minister for Regulatory Reform) Link to this

I move, That the Regulatory Standards Bill be now read a first time. At the appropriate time, I intend to move that the bill be referred to the Commerce Committee for its consideration.

The Regulatory Standards Bill aims to improve the quality of regulation in New Zealand. As a Government, we use our powers to regulate to ensure that people live safe lives, get treated fairly, protect the environment, maintain a competitive and efficient economy, and much more. But regulation also imposes costs. Excessive regulation can impose unnecessary compliance costs on businesses and individuals and to tier investment, and can limit innovation and competition. Decade by decade the quantity of regulation made in New Zealand has increased. Between 2000 and 2009 over 68,000 pages of legislation were passed. This equates to creating or amending around 105 Acts and 405 regulations each and every year. Many of the countries we compete with have focused on improving the quality of their regulation with more success than New Zealand has had. New Zealand’s ranking in the OECD product market regulation indicators has fallen from 4th in 1998 to 14th in 2008. As a small, isolated country, we need to do better if we want to be competitive in the global economy.

Regulatory quality has been a strong focus for this Government, as set out in the Government Statement on Regulation of August 2009. We have introduced a number of administrative measures designed to improve regulation as it is made and to improve the stock of existing regulation. These measures include strengthened regulatory impact analysis requirements, a programme of regulatory reviews, and a Government-wide scan of the regulation on our legislative books. These measures have led to improvements in the quality of regulatory policy advice provided to Ministers. The fact is, however, that administrative measures alone will never be enough to deliver the level of improvement that New Zealand so desperately needs. Only the Regulatory Standards Bill’s more stringent requirements can bring about a change in the way that Governments think about regulation.

The Regulatory Standards Bill has its origins in the Regulatory Responsibility Bill, which I introduced as a member’s bill in 2006. The Regulatory Responsibility Bill was examined and substantially revised by an expert Regulatory Responsibility Taskforce, established by the Government in 2009. The Regulatory Standards Bill is a result of the work of that task force. I would like to thank Dr Bryce Wilkinson, who first put forward the case for the Regulatory Responsibility Bill in his 2001 publication Constraining Government Regulation. I would also like to acknowledge Roger Kerr, executive director of the New Zealand Business Roundtable, for his tireless work in gaining support for this bill over the last 10 years.

The Regulatory Standards Bill aims to increase the transparency of lawmaking and the accountability of lawmakers. The bill has three key components: it provides a benchmark through a set of regulatory principles that all regulation should comply with; it provides transparency, by requiring those who propose and create regulation to certify whether the regulation is compatible with those principles; and it provides monitoring of the certification process through a new declaratory role of the courts. The bill identifies a set of principles of responsible regulation that all regulation should be consistent with. Regulation is defined to include Acts of Parliament, statutory regulations, and tertiary legislation, but excludes regulation made by local government.

The principles are distilled from sources such as the Legislation Advisory Committee guidelines, common law, and Parliament’s own Regulations Review Committee. The principles cover seven key areas, including the rule of law, the protection of individual liberties, the protection of property rights, the imposition of taxes and charges, the role of the courts, the review of administrative decisions, and good lawmaking. These principles are guides, not binding rules. From time to time, breaches of the principles will be necessary. The bill provides for this, and this is a key point: it allows Parliament to pass any legislation, regardless of whether it complies with the principles. All that the bill requires is that departures from the principles are “reasonable and can be demonstrably justified in a free and democratic society.”

In order to encourage transparency about whether regulatory practices are consistent with the principles of responsible regulation, the bill imposes certification requirements on those who make regulation. Under the bill, chief executives and Ministers responsible for proposed regulation must certify whether that regulation is consistent with the principles. Where regulation does not comply with one or more principles, the Minister responsible must explain why that non-compliance is demonstrably justifiable in a free and democratic society. If there is no Minister responsible, as is the case with some tertiary legislation, the responsibility falls to the chief executive. Certification allows others to understand the impacts of proposed regulation and the trade-offs that we have had to make. We can and do have significant impacts on New Zealand businesses and New Zealanders when we use our regulatory powers. It is only right and proper that we should be open about the impacts that our proposed regulations will have.

The bill provides for the monitoring of the certification process by allowing the courts to provide declarations of incompatibility where they believe the principles have been breached. This power is declaratory only. The courts will not have the power to strike down legislation, to issue injunctions against Parliament or the Crown, or to award damages to those adversely affected by regulation that is incompatible with the principles. Parliament, members will be pleased to learn, remains sovereign. The purpose of the declaratory function is to provide an independent, informed opinion on whether regulation complies with the principles. The function encourages Ministers and chief executives to certify diligently and in good faith, as their certifications are liable to be tested in court. Initially the courts would be able to make declarations only in relation to regulations made after the commencement of the legislation; after 10 years the declaratory power would extend to all regulation.

In addition to the three key components of the bill in terms of principles, certification, and monitoring by the courts, the bill requires the courts to prefer legislative interpretations that are consistent with the bill’s principles. This provision initially applies only to new regulation, but after 10 years applies to the existing stock of regulation. The bill also requires every public entity to use its best endeavours to regularly review all regulation that it administers for compatibility with the principles. The steps that entities have undertaken to review their regulation, and the outcomes of the process, must be included in their annual reports.

This bill provides us with better discipline for creating and managing our regulation. It provides transparency in a similar way to the Public Finance Act. That Act imposes certain responsibilities on Government spending. It says that if we are spending public money, we should justify it and be accountable for it. The Act has created a cultural shift in the way that money is spent in New Zealand and in the whole mindset on public expenditure. This bill places similar responsibilities on Government regulators. It says that if we are using the Government’s regulatory powers, we should justify that and be accountable for it. This transparency will result in higher-quality regulation that has fewer unintended consequences. It will reduce compliance costs, and that better achieves policy objectives. I commend the bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) Link to this

I have been waiting for the opportunity that the Regulatory Standards Bill represents to express my significant level of disappointment at the Government agreeing to allow this bill to go to a select committee for the sake of political expediency. That is all we will get from the Government on this bill. I do not doubt the bona fides of the Minister of Local Government, who is introducing this bill. He has stated his position on the record more than once. The history of this legislation goes back to the time when I was Minister of Commerce and he was a member introducing a member’s bill on regulatory responsibility. I admire the fact that he has consistently argued for the same result that this bill represents.

The Government, I think, should be a little bit more upfront in terms of its approach to this bill. We know it will vote for the bill to be referred to a select committee, at which point its support for it will end. That will mean that good people out there will make submissions on this bill, both deeply opposed to it and vociferously in favour of it. We will hear all of those submissions, report the bill back to the House, and that will be the end of the matter. I think that is not fair. I do not think it is fair to the House, the submitters, or the Hon Rodney Hide, who has put so much of his personal integrity on the line on this particular bill. I am not as inclined as the Government to waste the time of the House, therefore Labour will be opposing this bill at its first reading and its referral to a select committee.

The reason we oppose this bill is the principle that we do not agree with the content of the bill. The bill contains the original flaw that stymied the original member’s bill when it was introduced to the House a few years ago. That original flaw is that it allows the courts into the lawmaking process itself. The Minister can say as much as he likes that the sovereignty of Parliament is protected, but we know the courts, and we know that if we allow them to make declarations as to consistency they will be entering into the legislative arena, and they are not equipped to do so.

Enabling people to go to court for a statement of non-compliance will hold up the implementation of Government policy. National says that is good. What would have happened to the 100 days of action if the rules that are contained within this legislation had been set in concrete at that point? It would not have been 100 days of action. We know how many days of action it would have been. In fact, it would have been 100 days of inaction, followed by many more days of inaction, followed finally by days of action, as proper regulatory impact analysis after regulatory impact analysis was undertaken. I have not gone back to do a count of the bills passed in those first 100 days of this Parliament, but not many had regulatory impact statements of any quality attached to them at that particular time.

PESETA SAM LOTU-IIGA (National—Maungakiekie) Link to this

It is my privilege to speak to the Regulatory Standards Bill. May I acknowledge the Minister for Regulatory Reform for bringing this bill to Parliament and for the work he has done on the principles around regulations and in terms of improving the way that Parliament works. The previous speaker, Lianne Dalziel, will rail against this bill proceeding to the select committee. I was not in the last Parliament, and I did not get an opportunity to listen to the submissions on the Regulatory Responsibility Bill, but I certainly welcome the new bill. I look forward to hearing the submissions to the select committee with an open mind in terms of proceeding with the bill through its process.

What does this bill do? If we go back to first principles, we see that it is about breaking regulations and making more effective laws and regulations, as part of this Government’s brief. It is part of the plan that the Labour Party does not have. That plan is to increase our exports. It is a plan about innovation and trade. We have just heard in the last week that the Prime Minister has been to India to negotiate the type of trade agreement that will bring about prosperity for this country. The plan is also about making Government services more effective. That is part of our plan. It is also about effective taxation. Last year’s tax switch was another building block in this Government’s regime to bring about prosperity. The Government’s plan is also about infrastructure spending. So breaking regulations, and certainly making more effective lawmaking processes, are part of our plan.

What does the bill do? Cutting red tape and regulations certainly is about driving economic growth. It makes it easier for businesses and New Zealand companies to do better. By doing better, they provide better and more opportunities for those who are after jobs. The bill is also about, as the Minister pointed out in his speech, putting in place an annual programme to clean up regulations. Before the Commerce Committee right now we have a regulatory reform bill whereby we are cleaning up a number of statutes across the legislative menu. It will simplify a number of laws and establish productivity-raising regulations.

CHARLES CHAUVEL (Labour) Link to this

I agree with some of what the last speaker, Peseta Sam Lotu-Iiga, said about the principles of the Regulatory Standards Bill. They are, at least on their face, principles that pretty much anybody should support. Obviously, legislation should be consistent with the rule of law. The law should be clear and accessible. It should not adversely affect rights and liberties or impose obligations retrospectively. Every person should be equal before the law, and issues of legal right and liability should be resolved by the application of law rather than by the exercise of a discretion on the part of officials, elected or otherwise. Those principles are incontrovertible and, as my colleague Lianne Dalziel said, are the basis on which the legal system rests. They are the basis on which all the presumptions around our legislation are construed when the courts exercise their ultimate right to decide what we meant when we made a law.

Similarly, in respect of liberties, laws should not diminish a person’s liberty, personal security, freedom of choice or action, or rights to own, use, and dispose of property except as is necessary to provide for or to protect any such liberty, freedom, or right of the person themselves or of another person. But in this legislation we again have a fundamental principle or canon of interpretation that the courts will use now, when they construe legislation passed by this House. They will read laws down if they appear to offend against those principles. Only if this Parliament were to use the clearest possible words could the courts come to a contrary conclusion.

Likewise, there is a principle contained in the bill around the taking of property: laws should not take or impair, or authorise the taking or impairment of, property without the consent of the owner unless there is an overriding public interest involved, full compensation for the taking is provided, and it is provided on behalf of or by the persons who obtain the benefit of the taking. Again, no one who has studied our constitution would find that surprising.

Likewise, taxes and charges should not be levied under any administrative provision; they should be authorised only by a principal enactment. The charge should be reasonable in relation to both the benefit the payers are likely to obtain from the goods or services, and the cost of efficiency in providing the goods or services. Again, that is inarguable.

In terms of the role of the courts, they should always have that authoritative right to determine the meaning of legislation, and there should always be a right of appeal on the merits against decisions to a court or other independent body, and there should be appropriate criteria laid down for the making of decisions by the court or independent body.

Finally, there are principles enunciated around good lawmaking. Laws should not be made unless, to the extent practicable, the persons likely to be affected by the legislation have been consulted. Laws should not be made unless there has been a careful evaluation of the issue, of the effectiveness of existing legislation and law, of whether the public interest requires that the issue be addressed, and of any other options, including non-legislative options for dealing with the problem. There should be careful evaluation of who is likely to benefit and who is likely to suffer a detriment from the legislation. There should be careful evaluation of the potential adverse consequences of the legislation, including the Crown’s potential legal liability, that are reasonably foreseeable. The benefits of the legislation should outweigh the costs of it, and it should be the most effective, efficient, and proportionate response to the issue concerned. Again, nobody could argue with these principles. They are right and they are self-evident, but they exist already in terms of the way, hopefully, we evaluate legislative proposals.

One of the problems about the bill, and one of the reasons why members on this side have real concerns, is that although it seems to state very fair-sounding principles, very inarguable principles, principles that most would accept without second thought, the way in which the principles would then be applied to legislation is the problem. The bill provides that wherever an enactment can be given a meaning that is compatible with the principles, it is to be preferred to all other meanings.

A court can make a declaration of incompatibility between legislation that this House, this Parliament, may make in future and the principles outlined in this bill, if we are to pass it. The problem we then get constitutionally is that if the court does that, the declaration of inconsistency has no legal effect. It does not affect the continuing operation of the inconsistent measure, and no court may hold any provision of the legislation to be impliedly repealed or revoked. So what is the point? That is really the question here. What is the point in this legislation? Why bother stating principles that already underpin our constitutional arrangements, then get a court to say that a future Parliament has breached those provisions, but if we do, the court’s declaration will not mean anything? What sort of constitutional merry-go-round are we talking about here? What sort of waste of money are we contemplating putting on the statute book by engaging in this exercise?

I just want to run through some of the criticism that I think has been made, justifiably, of the bill, apart from the problem that I have just identified. First of all, the Regulatory Responsibility Taskforce failed to justify why this sort of bill is necessary. There is very little evidence showing why a rigorous or intensive approach is required, as opposed to some of the other options that were canvassed by the Commerce Committee when mark 1 of this legislation was considered. There is no convincing argument as to why legislation is required to ensure better legislation, as opposed to other means of improving the way that we do things here. When we measure the Regulatory Standards Bill against its own principles, it is clear that no responsible legislator could vote for it.

There is ambiguity in the legislation, and again referring to earlier attempts in this area, George Tanner QC referred to the open-textured language used, which leads to uncertainty of meaning. He said: “It attempts to define good lawmaking by reference to a set of simple principles: in doing so it obscures the complexities inherent in them and creates the same lack of clarity and uncertainty that it seems to prevent.”

I referred earlier to the difficulty that this legislation will create for the third branch of our government, the judiciary. As Sir Geoffrey Palmer has pointed out in a recent article: “Neither the judges nor the legal profession are proficient in policy analysis of the type that leads to regulatory legislative proposals.” In this respect the Regulatory Standards Bill would confer on the judiciary a novel role for which they are not resourced or equipped. I can hear the cries now from parliamentarians and others who do not like the idea of judges expressing a view on policy and content, yet here is exactly what is being invited of them by this legislation. We will get all sorts of accusations about the activist judiciary overstepping the mark and overstepping its role, yet that is exactly what we would be inviting them to do by the text of this legislation.

I think, ironically, this bill will create more compliance costs than it would save. The relevant Minister, or the public entity, will need to undertake a certification process. There will be regular reviews of all legislation, annual reporting requirements by every entity, ministerial oversight of the review, and then the prospect of litigation being generated by the possibility of an application for a declaration of incompatibility. That all implies massive resources, particularly over a 10-year time frame, which George Tanner QC referred to as unworkable and unrealistic.

We have real problems in the legislation. There are better alternatives. The Commerce Committee has already considered those and has said that if a regulatory impact statement and ministerial sign-off on compliance with Legislation Advisory Committee guidelines were taken seriously, they would make a real difference here. We should try using what we have, improving it, and actually adopting the principles that the bill would exhort us to follow. We should look at what we have and decide whether it is workable before we embark on an innovation such as this, which will be costly and unworkable. That is my challenge to the Minister.

Dr RUSSEL NORMAN (Co-Leader—Green) Link to this

I rise to speak on the first reading of the Regulatory Standards Bill, a bill put up by the ACT Party and apparently being voted for by the National Party. This bill has so many things wrong with it that it is hard to know where to start, so I thought I would start in the middle and talk about the issue of takings. I think that is an interesting issue, which this bill very much brings to the fore.

The way that this bill works is that when a bill comes to Parliament, the Minister and the chief executive have to sign a piece of paper that says the bill meets the regulatory principles, or, if it does not, there is public interest in it not meeting those principles. There is a set of principles, and I want to talk about one of those principles, which is the issue in regard to takings and property. Basically, the bill states that legislation cannot take someone’s property or impair someone’s property, unless that is in the public interest and that person or corporation is compensated in the process. That is essentially what it says. If we were to take some case studies to flesh out what this would mean, I think it would demonstrate the problem with this kind of approach to lawmaking.

For example, we can talk about the plain packaging of tobacco products. If a Government were to introduce the plain packaging of tobacco products, certain tobacco companies would argue that their property rights had been impaired as a result of that. Philip Morris could come out and say it used to be able to use its Marlboro brand and all the rest of it, but it cannot any more, so therefore its property rights had effectively been impaired. Philip Morris could say that if the Government thinks there is a public interest case, so be it, but the Government would have to compensate Philip Morris if the Government were to follow the principles in this bill. That would mean that before the Government could move to introduce the plain packaging of tobacco products, it would be required to compensate Philip Morris for the entire impairment of the intellectual property rights around its branding. If this sounds vaguely familiar, the reason is that Philip Morris is currently launching a case against the Australian Government under the provisions of a bilateral investment treaty between Australia and Hong Kong that uses exactly the same principles. Over there it is termed “expropriation” or “indirect expropriation,” but it has exactly the same meaning.

My challenge is to the Labour Party, actually. While Labour was in Government it signed a whole bunch of trade treaties that had exactly the same provisions, which enable multinational companies to sue our Government through bilateral investment treaties. Those provisions are within the China free-trade agreement, and a bunch of other bilateral investment treaties have those provisions, as well. It seems to me that signing up to trade agreements or passing law that enables corporations to sue Governments for their actions is a very, very bad idea. If we were, for public health reasons, to require the plain packaging of tobacco, then I think that would be just too bad for Philip Morris. I do not think we should compensate Philip Morris for the fact that it would lose some money in the process. I say to National that if it introduces this kind of law, the onus would then be on the Government, whenever we wanted to introduce a regulation that would impair someone’s property rights, to compensate them, if we were to be consistent with the principles of this bill. I ask whether that is really what the Government wants to do.

We know the answer to that question, and it is that the National Government does not want to do this, because this is not the first time that this kind of legislation has come to Parliament. In fact, a bill that came to Parliament under the name of Gordon Copeland previously did a similar kind of thing. At the time the National minority view opposed it. Chris Finlayson was leading the opposition to it at that time. He said the amendment would “have far-reaching implications and could well be the cause of a great deal of litigation against the Crown” if we were to introduce this kind of principle. He meant that if we introduce the kinds of laws that say we cannot pass a law without compensating someone whose property is impaired, then all of a sudden we could be sued by a whole bunch of corporations whenever we tried to pass legislation that they did not like. The National members of the Justice and Electoral Committee went on to state: “compensation issues should not be simply left to the courts. There should always be a proper statutory basis for compensation.” It should not be left to the the courts and the process through the courts for corporations to sue the Government or Parliament if we try to introduce rules.

There is a bunch of other rules that we could talk about—for example, those on building standards. Building standards are a very relevant issue, because New Zealand has just had the leaky houses crisis. One estimate is that the leaky houses crisis has cost our country $20 billion because of the poor regulatory framework that was set up around the building industry. The weak building regulations have had to be strengthened in recent years, as a result of the disaster of the leaky housing crisis. There would be those involved in the industry who would argue that if we tried to strengthen building standards, and that resulted in their products—for example, monolithic cladding; James Hardie’s comes to mind—no longer being used or not being used as much as previously, because we had strengthened the building regulations, then they could sue us as a result of the impairment of their property. James Hardie’s could say the Government’s new building regulations would result in its monolithic cladding—which was one of the causes of the leaky housing disaster, but not the only one—no longer being used, because everyone was going for weatherboard, and therefore the Government had cost it an awful lot of money and it wanted compensation. James Hardie’s could say that under this Regulatory Standards Bill, which Parliament had been silly enough to vote for, the firm had the right to sue the Government for compensation because it has closed up the rules around leaky houses.

The reason that this issue is particularly apposite on this occasion is that the chair of the working-group that put the basis of this bill together was none other than Graham Scott, who, more than any other person in New Zealand, is responsible for the leaky houses crisis. I like to call him our “$20 Billion Man”, because he was the head of Treasury when all the relaxation of the building standards was pushed through. Treasury was very active under Mr Scott in relaxing the standards around building. It is, in fact, the ACT Party and Mr Scott who can be blamed for the $20 billion leaky houses crisis. If there could ever be an example of a situation where regulations are important and necessary, the leaky houses disaster is probably the most obvious one. There are many other examples, but that is one example of a situation where having good, strong regulations can be expensive upfront, because it means the houses costs a little more to build, but actually is in the long-term best interests of the country—and especially of the people who are now living in rotting houses and having their life savings whittled away because National weakened the standards around buildings back in 1991 with its Building Act.

If this bill were actually to become law, then it would become difficult to tighten up the rules around building standards. If we discovered that a mistake had been made that allowed a bunch of bad products and bad practices to result in a leaky housing disaster, and we wanted to tighten the rules, those companies that lost money as a result—and some would—could rightly sue the Government for compensation. We can imagine the chilling effect that it would have on the Government if, every time that we wanted to fix up a regulatory problem, we had to compensate everyone who had lost property or had their property impaired as a result of that process. It would make it much more difficult.

Think, for example, about environmental standards, which are another classic problem. Climate change—by introducing a carbon tax there are winners and losers. Those people who have carbon-intensive products would sell less of their product as a result of a carbon tax, and their businesses would be worth less. They could rightly argue that their property rights had been impaired, and therefore could sue the Government for compensation, if we tried to restrict greenhouse gas emissions in New Zealand. The Government would have to compensate them. Every business would line up in the courts and seek compensation if these kinds of principles were put into law.

There is so much that is wrong with this bill, and I have focused on just one particular aspect. We could also talk about the way that the judiciary would be dragged into the policy process. We could talk about the way that the neutrality of the Civil Service would be compromised, because senior public servants would have to basically sign off on political processes. We could talk about the fact that this bill will not even necessarily help business, because it would make the process of lawmaking and regulation much more difficult. But I think that it is worth thinking particularly about the property compensation issues, because they have relevance not just for this bill but also for the bilateral investment treaties that Labour and National are both very keen on. Thank you.

Hon HEATHER ROY (ACT) Link to this

I am very pleased to rise in support of the Regulatory Standards Bill. The Minister for Regulatory Reform gave an excellent speech about the history that led us to this point and what this bill will do. Listening to the Green member who has just spoken, Russel Norman, reminded me exactly why this sort of legislation is needed. He took the opportunity when speaking on this bill to have a whack at everything he dislikes. There was some environmental stuff in there. The ACT Party and Graham Scott, who probably best understands public policy in this country, got a swipe. Russel Norman started off by talking about one of the Green Party’s old favourites—the plain packaging of cigarettes—as if that will make any difference at all to the rate of smoking.

The basic principles of lawmaking are very often overlooked. I often say that laws should be clear, they should be enforceable, and they should be routinely enforced. Plenty, sadly, are not, which is why there is a need for this legislation. The first reading of this bill is a very proud moment for the ACT Party, and the Minister has worked tirelessly to get the bill to this point. As part of our confidence and supply agreement with National, the Regulatory Responsibility Taskforce was put together. The drafting of this bill was the result of the work of that task force, following on from the introduction of the Regulatory Responsibility Bill, which was a member’s bill.

It was interesting to hear the Labour Party contributions to debate on this bill. It seems that it is not opposed to having principles; it just does not want to do anything about promoting them. Lianne Dalziel talked a lot about her general agreement with the principles espoused in the bill, which is very pleasing. She also talked about fairness, though, and she gave some reasons why this bill should not go to the select committee. She said it was because of fairness and because she did not want to waste Parliament’s time. When we come back to this House tomorrow it will be a members’ day, which is the only opportunity that backbench MPs get to debate their issues. We will see who is most concerned about not wasting Parliament’s time then. We will see, as we have seen on every members’ day since last December, the filibustering that is going on to prevent one particular bill getting through Parliament.

Charles Chauvel stood up and said he objected to a number of things. He too talked about the value of the principles, but then he gave a long list of objections, explaining why the bill should not proceed. It seemed to me, sitting here and listening very carefully, that they were mainly objections to Ministers doing exactly what should be expected of them. There is nothing wrong with expecting legislation to be fair and clear, and there is nothing wrong with expecting legislation to be enforceable and routinely enforced.

The bill itself sets clear standards that new rules and regulations will be measured against, which is very important. The Minister talked about transparency and accountability, which are easy words to rattle off but much harder principles to put in place. These standards spell out what good laws look like and what they should do. As lawmakers, every one of us in this Chamber has the responsibility to ensure that that happens. For example, laws and regulations should treat everyone equally, they should be accessible, and they should be easy to understand. They should not remove property rights without good reason or without compensation. They should not remove the right to appeal to the courts.

Secondly, the bill would require anyone proposing new laws or regulations to certify that their proposals met such standards. If laws do not meet those prescribed standards, the person proposing the law—either a Minister or a member—would need to explain to Parliament why the law does not comply and why the legislation being proposed meets the public interest. Finally, if someone believes that a new law does not meet the standards, then that person will be able to go to court. The court can then issue a declaratory judgment. So there are checks and balances, there is transparency, and there is accountability—things that every member in this House, at one time or another, has stood up, either here or on an election campaign stage, and talked about. This bill is about putting in place those very things.

For those who have objections to the bill, I have some questions. These are questions that all people drafting a bill should have to ask themselves, and are exactly what this law is putting in place. Why is this law or regulation needed? What will it achieve? What is likely to happen if the law is not put in place? What side effects might there be? Unintended consequences are something that we see all too often. Are there any alternatives, and what makes this particular legislation the best option? We should ask whether anybody’s legal rights or property rights are being infringed, whose they are, whether they consent, and, most important in the issue of property rights, whether they are being compensated for this loss. Does the regulation follow the principles of responsible regulatory management? And we should ask when the regulation will next be reviewed, which this bill also allows for.

When I was Minister of Consumer Affairs, my major project was to look at consumer law, and we ended up with the consumer law reform project. The project took seven of the 12 pieces of consumer law and is amalgamating them. When I looked at consumer law, I saw two very good principles-based pieces of legislation: the Fair Trading Act and the Consumer Guarantees Act. There were also a lot of other smaller laws that had been around for a very long time. The one that was the oldest was the Auctioneers Act, which was put together in 1928 and still had provisions for people tethering a horse when they went to the stock markets. It has been a very long time, I think, since horses have been tethered by people taking their stock to market. That Act highlights in a very simple way the principle of the importance of reviewing legislation.

I proudly stand here today and support the Minister for Regulatory Reform in this initiative to look very carefully at the lawmaking that happens in this House, the way it is gone about, the need for it, and what exactly should happen. We will see as a result of this bill strengthened regulatory impact statements. I frequently asked to see those at select committees when I was in Opposition, and was just as frequently told that the regulatory impact statement was not ready yet. For some laws we never saw any. The bill will put in place regular reviews, as I have just outlined, and that too is very important. It will result, as the Minister said, in better discipline, transparency, accountability around public expenditure, and much higher quality regulation—something that each and every one of us in this House should bend over backwards to put in place. Thank you very much.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Kia ora tātau e te Whare, tātau kua hoki mai i uta, i tai, ki roto i ngā pakitara o te Whare, me te mōhio anō hoki, koinei te Wiki o te Reo Māori. Me whakanui i te āhuatanga o te reo Māori, kaua mō te wiki engari, he pai tonu kia aro atu ki tērā o ngā whakaaro i tēnei wā. Heoi anō me kōrero Māori i te roanga o te tau, kia taea ai te kī, kua tangata whenua tonu te reo Māori ki Aotearoa nei.

Ko tāku noa ake ko te kī atu, kei te kōrero tātau mō te Regulatory Standards Bill. Me pēnei rawa te kōrero, kāre te Pāti Māori i te whakaae ake ki tēnei o ngā pire. Me kī atu ko te tino tikanga o tēnei pire, he whakatikatika, he whakapai ake ko te tiketiketanga o ngā whakaritenga i Aotearoa nei. He whakapapa tōna, he whakapapa mai ai ki tētahi o ngā pire motuhake nei. Ko te ingoa o tērā pire i ngā tau kua hipa, ko te Regulatory Responsibility Bill. I tae mai tērā pire ki tēnei Whare Pāremata i te tau 2008 engari, kāre i pāhi, kāre i eke.

I tōna hōhonutanga, kei te āhua whakaae atu mātau ki te whāinga o tēnei o ngā pire, kia mārama te ture, kia tika te ture, kia pono te ture. Kia taea ai e wai rānei te whai atu i te ture ki tōna tiketiketanga, tuatahi. Tērā kōrero tērā.

Tuarua, kia kore e pā kinotia te tangata e te āhuatanga o te ture, i tōna oranga, i te rangatiratanga o tēnā, o tēnā. Ka toru, e ōrite ana te tangata, ahakoa ko wai ki raro i te korowai o te ture. Me pērā rawa te noho o te motu i raro i te korowai, tātau katoa.

Nā, he māmā noa iho tērā te kōrero engari, tōna whakatinanatanga kei reira tonu te uauatanga. Pēnei i te mema, te kaiārahi o te Rōpū ACT nei, arā te Tākuta Brash nei i roto i te Whare i te ahiahi nei. Koinā tāna e whai nei engari, koinei tāku e kī nei. Ko te kōrero mō tērā kōrero, arā anō tērā engari, ko tōna whakatinanatanga, e hoa mā, kei reira tonu te uauatanga.

Nō reira, e toru pea ētahi mea hei whakatakoto ki mua i te aroaro o te Whare Pāremata i tēnei wā. Me huri atu ki ērā o ngā kaupapa i tēnei wā. Tuatahi ka pātaia te pātai, kai hea te Tiriti o Waitangi ki roto i ngā whiriwhiringa o tēnei o ngā ture? Kei te whai mai tēnei o ngā pire, me kī, i ngā tapuwae o te pūrongo o te Taraipiunara o Waitangi, me tana pūrongo mō Wai 262, i puta i ngā rā tata kua hipa ake nei. Ki taku mōhio, i roto i tērā o ngā pūrongo e mea ana, kei reira tonu te tirohanga kia noho hoa haere, me kī, ko te Karauna rāua ko te Ao Māori, i roto i ngā whiriwhiringa ā ngā tau kei mua i te aroaro. Anā, kei reira tonu, me kī, te huarahi hei mea para mā te Karauna rāua ko te Māori ā ngā tau kai mua i te aroaro. Ko te mate kē i roto i tēnei pire, kotahi anake te wāhanga e kōrerohia ana, ko tērā e pā ana ki te Karauna. Kāre he kōrero mō te āhuatanga ki te Ao Māori, arā, pēnei i tāku e kī nei mō te āhuatanga o te Tiriti o Waitangi. Nō reira, tērā tērā, take nama tahi me kī.

Tuarua, kei roto i te hōhonutanga o te pire, kei reira tonu e noho taupatupatu nei. Nā, hei tauira ake, mēnā ka āta titiro ki te hōhonutanga o tēnei pire, arā mō tēnei mea mō te tango rawa nei, me kī, ko te taking of property. Nā kei roto i te pire nei, kei reira tonu e mea ana, ā, e kore e taea e wai rānei te tango, te pupuri mai i ngā rawa a te tangata, ki te kore taua tangata e whakaae atu, ka mutu, ki te kore he utunga e whai nei ki taua tangata. Nā reira he pai tonu tērā whakaaro, mēnā ka tangohia mai ai ō rawa, ā, tuatahi me whakaae atu, tuarua, mēnā ka pērā, me whai utu anō koe mō tērā momo mahi. Mēnā ka whai tonu tātau i tērā huarahi, ā, mēnā ka kī tātau, mēnā ka whakaae tātau kia ōrite tātau i raro i te korowai o te ture, nei au e pātai nei i te pātai - pēhea ngā āhuatanga o ngā kerēme tiriti, ngā whakataunga Tiriti o Waitangi, e kōrerohia nei, e wānangahia ana? Mēnā ka whai tātau i tērā momo āhuatanga, ē, kua whai rawa te Ao Māori nā runga i ngā mahi tinihanga a te Karauna i ngā tau kua hipa. Nō reira, he take nui tērā hei mea kōrero, hei mea wānanga. Āe, mēnā kei raro tātau i te korowai o te ture, kia ōrite te āhuatanga, ahakoa ko wai, ā-iwi Māori nei, ā-tangata i tōna kotahi nei.

Nā, ko te take tuatoru, me kī, ko te āhuatanga o tēnei mea o te āta wānanga i te tika o te ture. Nā, me kī, ki te wāhanga e kī ana good law-making, tērā wāhanga. Kei roto i tērā wāhanga e mea ana, kia āta wānangatia, kia wātea te ture, ngā ture katoa, kia āta wānangahia, kia kitea mai ai ko wai te hunga ka whiwhi hua mai i tērā ture, me te hunga ka rongo nei i te ngau o tērā ture, arā, ko te hunga kore whiwhi i ētahi painga nā tērā ture. Me pēnei rawa te kōrero, me whai wāhi te tangata whenua ki te āta titiro ki te hōhonutanga o tēnei o ngā wāhanga, arā, kia taea e te tangata whenua te wānanga i te tikanga o tēnā o ngā wāhi. I te mea, tērā pea, kei roto i ngā ture ka kitea mai ai i ngā huringa whakamuri, mei kore pea e kite i ētahi painga o roto i ngā ture i ngā tau kua hipa ahakoa, kei reira tonu ngā hē rawa o te ture. Nō reira, kei reira tonu tērā āhuatanga, arā, kua hangaia ētahi ture i ngā tau kua hipa. E hiahia anō tētahi ki te whakatika i ērā ture, ko te mate kē kua kino, kua puta mai anō ētahi kino o roto i ngā ture ka hangaia. Nō reira, tērā tērā.

Ka mutu, ko te wāhi whakamutunga ki a au, ko te wāhanga e kī ana, e āta titiro ana ki tēnei mea o te ture kia whakamātauria. Arā, kei roto i te ture ka whakamātauria, ko te āhuatanga o ngā tikanga a te tangata kotahi. Engari, karekau he paku kōrero o roto i te ture mō te āhuatanga o ngā tikanga ā-kāhui tangata. Ka titiro ki te tangata kotahi, kaua ki te kāhui-ā-tangata, arā, ki te kohikohinga o te iwi, tērā momo āhuatanga. Me titiro anō rā te Minita ki tēnei take. Nō reira, koinei ngā take e toru e hei tīmatanga kōrero. Tērā pea ka rongo ngā taringa o te Minita Hide ki ēnei take. Tērā pea, ka whakahokia mai ai ki roto i te Whare Pāremata ā te wā. Mō tēnei wā tonu nei, kāre mātau i te whakaae atu ki tōna hōhonutanga engari, ka waiho ake tērā take kia tārewa mō te wā. Tērā pea, nā te āhuatanga o te whakahokinga mai o te Minita, ka aro pai ki tēnei o ngā ture. Nō reira, kia ora tātau.

[Greetings to us, the House, we who have returned from near and far to be within the walls of the Chamber, knowing full well that this is Māori Language Week. Aspects of the Māori language should be celebrated, but not just for a week. That thought merits further consideration. Māori should be spoken at greater length during the year so we can say that it has become firmly embedded here in New Zealand.

We are debating the Regulatory Standards Bill, and we of the Māori Party oppose it. The main purpose of the bill is to improve the quality of regulation in New Zealand. It has a genealogy. It came out of a member’s bill called the Regulatory Responsibility Bill. That bill came before this Parliament in 2008, but was not passed and did not make it.

In essence, we agree with the general principles of the bill, that the law should be clear, apt, and honest. But who can pursue the law to its conclusion? That is the first point. I leave that there.

Secondly, aspects of law should not adversely affect an individual in terms of their well-being and autonomy. Thirdly, every person, regardless of who they are, is equal before the law, and under its cloak. The nation, all of us, should exist like that, under the cloak and protection of the law.

Talking about it is the easy part. Implementing it is the hard part. It is a bit like the leader of the ACT Party, Dr Brash, who is in the House this afternoon. That is what he is after, and that is what I am referring to. Talking about it is one thing, but putting it into action is where the real difficulty is.

Therefore, there are perhaps three things to put before the House at this point. Let us turn to those matters now. Firstly, the question has to be posed about where the Treaty of Waitangi was during the negotiations undertaken for this bill. The bill comes hot on the heels of the Waitangi Tribunal Wai 262 report, just released in recent days. According to what I know, that report states that the Treaty envisages the Crown-Māori relationship as a partnership, in future negotiations. The way ahead for a Crown-Māori relationship in the future is still there. Yet the problem is that in this bill only one side is referred to, and that is the Crown. There is nothing about the state of Māoridom. It is like what I have been talking about in terms of the Treaty of Waitangi perspective. So that is issue No. 1, perhaps.

Secondly, there are still debatable issues in the details of the bill. There is an interesting irony, for example, in the detail of measures in this bill around the taking of property. The bill suggests that property can be taken, or authorised to be taken, without the consent of the owner, if full compensation for the taking or impairment is provided to that person. That idea is a good one if someone’s property is taken, but first they must be consulted. If that happens, they must be compensated for such an action taken against them. If we continue to go down that road, and agree that every person is equal under the cloak of the law, then I must ask the question: “What about circumstances relating to Treaty claims and Treaty settlements currently being addressed and debated?”. If the same regulatory standards applied, if we followed that kind of reasoning, Māoridom would be resourced to the hilt as a consequence of the Crown’s deceitful actions in years past. So that is a huge point to talk about and debate. Yes, if we were indeed under the cloak of the law, everyone would be equal before the law, regardless of who they might be, Māori people or others.

The third issue is the matter of carefully debating the appropriateness of the law—let us say, the provisions relating to good law-making. Those provisions suggest that every piece of legislation must contain a careful evaluation about who is likely to benefit and who is likely to suffer a detriment from the legislation, and all the potential adverse consequences of the legislation. We urge that local Māori be involved in examining the detail of those provisions carefully to see whether any retrospective steps will be taken to address past issues that clearly fall into the category of bad law-making. That situation still exists, in terms of bad laws still being made. One would like to amend those laws, but the trouble is that tainted laws have led to other faults appearing in the laws being drafted. So that is that matter.

Furthermore, my conclusion concerns the provisions that look carefully at the aspect of the law to be tested. The bill makes an issue of testing legislation against the concept of individual liberty. Absent from that discussion is any notion of collective rights. The Minister must look at these issues again. These three points are just a starting point for further discussion. Perhaps Minister Hide will pay attention to these issues, and in time bring this bill back to the House. For the moment, we do not agree with its details, and leave it hanging there. Depending on how the Minister brings the bill back, we might favour it then. So greetings to us .]

KATRINA SHANKS (National) Link to this

As the Minister for Regulatory Reform mentioned earlier, the main purpose of the Regulatory Standards Bill is to improve the quality of regulation in New Zealand. A key part of this Government’s plan for stronger economic growth is cutting red tape and regulations. The simple fact is that New Zealand has a problem with excessive regulation. These regulations impose real costs on our businesses and unnecessary burdens on individuals. We want to make it easier for New Zealand companies to do business, to lift productivity, to create jobs, to boost incomes, to improve living standards, and to provide the world-class public services our Kiwi families deserve. National believes that better regulation and less regulation are essential to help New Zealand become more internationally competitive and a more attractive place to live and do business. We recognise that in order to allow our businesses to move ahead, to grow, and to develop we need to address—and remove, where possible—barriers to this growth.

The Regulatory Standards Bill attempts to provide greater transparency and accountability for the quality of laws and regulations in New Zealand. The bill has its origins in a member’s bill known as the Regulatory Responsibility Bill, which Parliament’s Commerce Committee examined in 2008. The committee recommended that the member’s bill not be passed but that the Government establish a high-level expert task force to consider options for improving regulatory review and decision-making processes. The current Regulatory Standards Bill is the result of the work of this task force.

As my colleagues have mentioned, the Regulatory Standards Bill would require all proposed new laws and regulations to be assessed against a core set of accepted regulatory principles based on existing, well-established guidelines. This is about improving the quality of regulation in New Zealand. The bill aims to increase the transparency of regulation making and the accountability of regulation makers. In essence, the bill has three components. Firstly, it provides a benchmark for good regulation through a set of regulatory principles that all regulations should comply with. Secondly, it provides transparency by requiring those proposing and creating regulation to certify whether the regulation is compatible with the principles. Thirdly, it provides monitoring of the certification process.

We know that every New Zealander is affected by regulation in a number of ways. Some regulation is important. It helps us live safer lives, get treated fairly, protect and manage our environment, have a competitive and efficient economy, and much more. However, regulation also has costs and can have unintended effects. That is why improving the quality of regulation is a priority for this Government. We believe that better regulation and less regulation are essential to assist New Zealand to become more internationally competitive and a more attractive place to live and do business.

We are committed to introducing new regulation only when we are satisfied that it is required, reasonable, and robust. We will review existing regulation in order to identify and remove requirements that are unnecessary, ineffective, or excessively costly. In fact, since being elected, the National-led Government has begun a programme of reviews of the effectiveness of important regulatory regimes, particularly those that have a significant impact on productivity. We have simplified employment law. National’s employment law package encourages employers to hire new staff, reduces compliance costs, and gives greater choice around holidays. The voluntary 90-day trial period has created 13,000 jobs in small and medium sized businesses. We have extended this period to all employers.

We have simplified the Resource Management Act to balance our economic opportunities with our environmental responsibilities. We have simplified building regulation. Our Better Building Blueprint is making it easier and cheaper to build good quality homes and buildings. We are amending the Building Act to encourage a “build it right first time” approach, keeping builders accountable and streamlining the consent process to make it cheaper for homeowners.

Better and less regulation has made, and will continue to make, New Zealand more productive and prosperous. I look forward to the Regulatory Standards Bill coming to the Commerce Committee so we can discuss how this bill can improve the quality of regulation in New Zealand. Thank you.

CLARE CURRAN (Labour—Dunedin South) Link to this

I am pleased to take a call on the first reading of the Regulatory Standards Bill. I too have listened to some of the discussion in the House this afternoon. As members no doubt know, Labour is opposing this bill. We support the principles of better and more efficient regulation and also good lawmaking. However, we believe that this bill seriously fails to meet and achieve this aim. It will create compliance costs for Government departments through the certification process and the annual report, and it blurs the line between the judiciary and the executive.

We certainly, as I said, stand for the improvement of regulation and lawmaking. Much of the work done by the previous Minister of Commerce, the Hon Lianne Dalziel, aimed to achieve that, and we are still seeing many of the bills that are part of that process coming before the Commerce Committee.

We are saying today that this is a confusing and ineffectual bill, which will not lead to better legislation, but will instead clog up the courts with cases arguing the meaning of vague principles. This bill fails its own proposed standard of clarity of legislation and will force the already over-encumbered judiciary to take on the role of policy analysis for all Government legislation. New Zealand lawmaking, although it could be better in some cases—in particular, the super-city legislation, for example—is generally already of a reasonably high standard, which makes this unnecessary and potentially very expensive legislation. This bill is a solution that is searching for a problem, and it is a poor solution at that.

The Hon Rodney Hide and the ACT Party tried to get this bill through Parliament before now, in the form of the Regulatory Responsibility Bill in 2006, but it was rightly rejected by the Commerce Committee as being overly complicated, unnecessary, and even unconstitutional. Now we have it back. The New Zealand Herald has described the bill as ill-considered, the Maxim Institute calls it a wolf in sheep’s clothing, and Treasury itself, in the regulatory impact statement, says it believes it would be ineffective and unnecessary. Constitutional law expert Richard Ekins, of the University of Auckland, went as far as to say that this bill is “hostile to our democratic constitutional order.” Why, then, is the Minister bothering to bring this deeply flawed bill back to the House?

I will read out some of the principles of the bill, in a nutshell. The bill sets out the principles of responsible regulation. It will apply to all legislation—including a newly and widely defined category of “legislative instrument”, derived from Australian federal legislation—to ensure that all instruments of the lawmaking or legislative character of central government, not merely administrative, are covered. It will provide a process for certifying that proposed new regulation is compatible with legislative principles, which will be done by those responsible for creating or administering it. It will provide a role for the High Court to declare whether a provision of any regulation is incompatible with one or more of the legislative principles unless, under clause7(2), the “incompatibility … is justified to the extent that it is reasonable and can be demonstrably justified in a free and democratic society.” For regulation made before the date the bill comes into force, some declarations may be made only after 10 years from that date.

The principles central to this bill are vague, they are based on a failed ideology, and they are legally suspect. There is a principle, under clause 7(1)(c), that no legislation is to “take or impair property” but, if it does, it must be necessary in the public interest and the owner will receive full compensation. As Brian Fallow of the New Zealand Herald has pointed out: “On the face of it this would debar Parliament from doing anything redistributive.” I will read another couple of quotes from his article of Thursday, 24 March: “It is what Yes, Minister’s Sir Humphrey Appleby called the politician’s syllogism: Something must be done. This is something. Therefore this must be done.”

He also said that “One of the Regulatory Standards Bill’s central principles against which legislation is to be measured, if taken literally, would tend to freeze the existing distribution of wealth. It says legislation should not ‘take or impair … property’ unless it is necessary in the public interest, the owner receives full compensation and that compensation is provided, to the extent practicable, by or on behalf of those who benefit from the taking or impairment.” As he said, “On the face of it this would debar Parliament from doing anything redistributive. That would depend on what content the courts gave to the concepts of taking, impairment, full compensation and the public interest. Those are just some of the concepts in the bill which it makes no attempt to define and delimit—leaving that to the courts.” That is why Labour is not supporting it.

I have another important point, and I would be interested to know from any future speakers from the other side of the House just what they will do in the future; I know they are going to support the bill to go to a select committee. Mr Fallow ended his article by saying: “The Government is only committed to supporting the Regulatory Standards Bill as far as select committee consideration. Labour is expected to oppose it. So it may well never see the light of … day.”

Considering the disdain that the Hon Rodney Hide has for the supposedly bloated Public Service, why is he introducing legislation that will increase the compliance and reporting costs of public entities? Treasury already carries out regulatory impact statements for new legislation, a mechanism the previous Labour Government improved to help ensure efficient and necessary regulation. With the new Productivity Commission also having some oversight in this area, any further legislation is completely unnecessary and a waste of the taxpayer’s money. Under this bill the relevant Minister and public entity will be required to undertake a certification process, with regular reviews and annual reporting by that entity. There is also the very real prospect of litigation by outside parties, if a judge is to make a declaration of incompatibility.

Considering that this Minister has continually proclaimed his intention to cut red tape, I cannot understand the rationale behind this bill, because it promises to significantly increase compliance costs for our already overstretched Public Service. The role of the judiciary under this legislation is of concern, as it will require those in the legal profession to become skilled at policy analysis with regard to regulatory law. Judges will be asked to interpret the poorly defined principles of this bill and how they apply to any new law. Because of the requirement of judicial oversight of all new legislation using these principles as the guideline, the judiciary will have incredible power over Parliament with regard to lawmaking and policy. The bill could politicise the courtroom as judges will be required to make political value judgments.

Initially, this legislation will apply to only new bills, but after 10 years existing regulation will be open to reinterpretation by the courts, and potentially we could see judges reinterpreting provisions in older laws to make them consistent with the principles of this bill. Is that democratic? It will essentially change the meaning of a law that was passed by a previous Parliament. I can already see some big corporates planning their cases to challenge regulations imposed under old law, and that process clogging up our courts further.

Labour is not opposed to improving the lawmaking process. We spent much of our last term improving legislative analysis through the regulatory impact regime, and the Hon Lianne Dalziel oversaw the Quality Regulation Review, which focused on improving regulatory barriers to business growth. This House has already passed the Regulatory Improvement Bill, the like of which will be passed annually to ensure regulation is efficient and necessary. We support good law, but we do not support this bill.

JONATHAN YOUNG (National—New Plymouth) Link to this

I am very pleased to stand and speak to the Regulatory Standards Bill. Regulations are important. They balance private interests with public interests. Regulations are important to establish how our society interacts, how it coexists, and how it shares its resources in a fair way, which, as I said, enhances personal rights and opportunities without infringing on the personal rights and opportunities of others. Finding that balance is what legislative work such as this bill is about. But regulations can become outdated and become unnecessarily onerous. There are times when the construction of our legislation needs to be reviewed and there are times when we need to be looking at those regulations as well and bringing some changes to them. The Hon Rodney Hide and the Hon Phil Heatley in April this year looked at some areas of fisheries and aquaculture legislation and regulation and announced the removal of 176 unnecessary regulations from the law books. The Hon Mr Hide said that many unnecessary regulations were allowed to remain on the law books and legislation has not been updated to keep up with the times. It is important that we have these review processes.

I particularly like the principles of responsible regulation set out in this bill, and we have heard other speakers talk about these. Clause 7(1) states: “The principles of responsible regulation are that, except as provided in subsection (2), legislation should—(a) be consistent with the following aspects of the rule of law: (i) the law should be clear and accessible: (ii) the law should not adversely affect rights and liberties, or impose obligations, retrospectively: (iii) every person is equal before the law: (iv) issues of legal right and liability should be resolved by the application of law, rather than the exercise of administrative discretion:”. These principles underpin the creation of our regulations and our legislative process. They are our baselines. They are the foundation that gives boundaries and context to the regulations we create, to ensure they are fit for purpose.

The National-led Government is firmly focused on lifting New Zealand’s economic performance. Only by lifting our economic performance can we create jobs, boost incomes, improve living standards, and provide the world-class public services that Kiwi families need. National recognises that we need to address and remove, where possible, barriers to growth and things that will stop our businesses moving ahead and stop them continuing to grow and to develop. We believe that better regulation and less regulation is essential to help New Zealand become internationally competitive and a more attractive place to live and to do business. We live in a very competitive world, and it is very important that we do not place upon ourselves undue encumbrances of outmoded, outdated, and onerous regulations. This bill is moving towards the end of those sorts of unnecessary weights that hold us back and hold us down. I am very pleased to stand in support of this bill.

RAYMOND HUO (Labour) Link to this

I would like to start my contribution to the first reading of the Regulatory Standards Bill by quoting some thoughtful comments made by leading legal experts and relevant stakeholders. Law commissioner and former chief statutory draftsman, George Tanner QC, says that the bill would fail to meet the test of responsible regulatory management, even based on the bill’s own principles. Auckland University’s Dean of Law, Professor Paul Rishworth, says that it could clog up the courts and draw officials into legal battles. New Zealand Herald commentator, Brian Fallow, says that the principles are abstract, constitutionally unorthodox, and substantively unsound. Even Treasury’s evaluation of the bill does not support it. According to Treasury, there is no clear advantage over other available methods in using legislation to promote regulatory quality, other than legislation being necessary to provide for the new role of courts. Further, Treasury rates the potential to induce change in behaviour as low, the risk of unintended outcomes as high, and the potential to reduce costs as very limited. No wonder Alex Penk, policy and research manager at the Maxim Institute, described the bill as a wolf in sheep’s clothing.

Labour opposes this bill. I have five main reasons for opposing this bill. The first one is that this bill changes the role of Parliament and the courts, and requires certification by Ministers and chief executives. This means that the chief executives in effect certify whether they would enact a particular law. The certification regime therefore virtually puts chief executives in the position to politicise themselves and arms them to veto Government policy in a way that is inconsistent with our constitutional arrangements. Secondly, the bill would be applied to new laws, but after existing for 10 years it can apply to existing regulation as well. This could empower the courts to reinterpret provisions in other laws to make them consistent with the principles prescribed in this bill, thus changing the original intention of Parliament when the law was enacted. Thirdly, many of the principles are redundant as they are provided for in other legislation—for instance, the imposition of taxes except by or under an Act, which is already the case. Therefore, the principles contained in this bill are ideological, vague, and create legal uncertainty. Fourthly, this bill will create not only create legal uncertainty but extra compliance costs for public entities, which will now face more onerous annual reporting requirements. Finally, this bill aims to fix an exaggerated problem. The regulatory impact statement states that although New Zealand lacks its own indicators of legislative quality, the best international surveys available suggest that New Zealand does not have fundamental problems with legislative quality when compared with other OECD countries.

Looking at the content, the bill has three key components—firstly, certification; secondly, judicial declarations of incompatibility; and, thirdly, interpretation to ensure legislation conforms to those principles. The bill establishes a so-called benchmark for good regulation through a set of seven regulatory principles. All regulations, including primary, secondary, and tertiary legislation, excluding instruments made by local government, should comply with these principles. The bill aims to provide transparency by requiring decision makers to certify whether the regulation they are proposing is compatible with the principles. Finally, the bill provides a check on the certification process by allowing the courts to provide declarations of incompatibility, where they believe the principles have been breached. However, this power is declaratory only, with no direct ability to overturn or amend the offending legislation, which, luckily, is consistent with the separation of powers doctrine.

I have three further concerns. The first one is that the Regulatory Responsibility Taskforce failed to justify why this bill is even necessary. There is very little evidence to show why a vigorous or intensive approach is required, as opposed to the other options suggested by the Commerce Committee. Based on the calls from both National and ACT MPs, there is no convincing argument as to why legislation is required to ensure better legislation. The second concern is that the bill uses open-textured language that will lead to uncertainty of meaning. According to George Tanner QC, it attempts to define good lawmaking by reference to a set of simple principles, and in doing so it obscures the complexities inherent in them and creates the same lack of clarity and uncertainty that it seeks to prevent. My third concern is with regard to the role of the judiciary. Sir Geoffrey Palmer pointed out in a recent article that neither judges nor the legal profession are proficient in policy analysis of the type that leads to regulatory legislative proposals. In this respect, the bill actually confers on the judiciary a new role for which they are not equipped. Our already overburdened court system should not be further encumbered with overseeing regulatory legislation.

I had the pleasure of reading a well-researched article offered by a senior lecturer at the faculty of law of Auckland University. Richard Ekins argued that this bill is unconstitutional and authorises courts to review the detail of policy, illegitimately constraining Parliament and calling into question the validity of much secondary legislation. Of particular interest is clause 7(1)(b), which states that legislation should “not diminish a person’s liberty, personal security, freedom of choice or action, or rights to own, use, and dispose of property, except as is necessary to provide for, or protect, any such liberty, freedom, or right of another person:”. A substantial number of legislative Acts do actually diminish a person’s liberty or freedom of choice. Mr Ekins cited an Act entitled the Bakeshop Act 1896 (NY), which prohibits any person from employing another to work in a bakery for more than 10 hours per day, or 60 hours per week. That Act would depart from clause 7(1)(b) of this bill, for it restricts the freedom of contract of employer and employee, and is not necessary to protect any existing liberty or freedom of the employee or any other person. The legislators might attempt to justify the Act by reference to the health of the worker, or the need to protect him or her from economic exploitation. It would be open to the courts to consider this rationale, and to decide that the legislation is an unjustifiable limit on liberty. The article went on to say: “The bill also states, in paragraph (c), that legislation should ‘not take or impair … property’ unless this is necessary in the public interest; and full compensation is paid, such compensation to be paid if practicable by those who benefit from the taking.” Mr Ekins argues that the principle conflates “takings” and “impairment”: “The fact is that limiting how one uses property attracts full compensation. The point of the principle is to make it very expensive to limit how property owners may act, for any property owner who suffers loss from regulatory change is entitled to be made whole. Thus, if Parliament wishes to ban dangerous weapons, it must buy them.”

MELISSA LEE (National) Link to this

It is a pleasure to rise to speak to the Regulatory Standards Bill in its first reading. New Zealand needs to lift its economic performance, and on this side of the House we are firmly focused on that. Only by lifting our economic performance can we better the lot of all Kiwi residents in this country, Aotearoa, by creating jobs, improving incomes for New Zealanders, improving living standards, and improving the public services that Kiwis actually deserve. This is especially so because New Zealand is a very small country. It is a small country compared with some other big countries, such as the United States, for example. We are at the bottom of the globe, far away from many of our trading nations. Hence, we are economically disadvantaged by being so far away, and we need to attract and retain the talent pool that is increasingly mobile around the world. We have heard about many Kiwis leaving our shores for better jobs overseas; we need to be able to retain them. We need to attract them and retain them.

Skills, technology, entrepreneurship, and capital are all things we need to grow so that our economy continues to grow. New Zealand needs to grow. Although the Opposition leader seems to think that our recession actually ended in 2009, we know how difficult it has been for most New Zealanders, and we need to improve the lot of New Zealanders. That is exactly what the National-led Government is doing.

To give us a competitive edge we also need a better policy environment than can be found anywhere else in the world. Cutting red tape and regulations is an integral part of this Government’s drive for stronger economic growth, making it easier for New Zealand companies to do what they do best. To help them along, the Government has put in place an annual programme to clean up regulation. It has simplified a number of laws—I think it was some 170 laws—and has established a Productivity Commission. It is not just businesses that are affected by regulation; everyday New Zealanders are also affected by regulation in all areas of their lives. We want regulations to help to ensure that we all live in a safer country, that we have safe lives, that we get treated fairly in this country, that we are all equal under one law, that we protect and manage our environment so that our children can also enjoy it in the future, and that we have a competitive and efficient economy that will achieve a better living standard for all Kiwis. We have already removed 170 unnecessary regulations from the law books, amended more than 20 Acts of Parliament, and are in the process of amending another 13 Acts.

The work of the Productivity Commission will also lift New Zealand’s economic performance in both the public and private sectors. Established in April this year, the two inquiries it will undertake are in housing affordability and international freight services. Both of these areas affect New Zealand’s international competitiveness. The commission will report back early next year, and I look forward to that.

The Regulatory Standards Bill has its origins as a member’s bill back in 2006, as previous speakers and the Minister for Regulatory Reform, who introduced the bill, have said. Although the Commerce Committee considered it back in 2008, it was deemed not ready to be passed in this House. I believe we should support this bill, because there needs to be transparency in regulation making. The accountability that this bill promotes is what we are doing, and what we do every day. I support this bill. Thank you.