What reports has he received on the Government’s progress in cutting red tape and reducing compliance costs for businesses and consumers?
It was very important for the Government to make progress in cutting red tape and reducing compliance costs, because they had got completely out of hand under the previous Labour Government. The Ministry of Economic Development issued its first report measuring the Government’s progress since 2008, which estimates that the Government is on track to reduce compliance costs by around $250 million. This will be partly offset by an estimated $50 million of new costs, relating mainly to strengthened rules for financial advisers, anti - money-laundering measures, and farm animal identification and tracing. So we are making some progress. We have a great deal more to make, and I acknowledge the significant contribution of the Minister for Regulatory Reform, Rodney Hide.
Why is it important to reduce red tape and improve the quality of regulation?
One reason it is important is that New Zealand has run a real-life experiment from about 2004 onwards in what happens in an economy when poor quality regulation and red tape is allowed to get out of control. It strangled the country’s export sector and helped to drive the economy into a speculative bubble, which has leg-roped our opportunity to make more economic progress now. Good quality regulation improves the lives of citizens, encourages investment, helps to create more jobs, and lifts incomes. We have a great deal more to do in that respect.
What steps has the Government taken to reduce compliance costs and improve regulation for businesses and consumers?
Well, we could go through a list of the huge efforts we have had to make to untangle the mess left by the last Government, but there are a number of examples of positive measures the Government has been able to take. We have streamlined resource management regulations, abolished gift duty, eased financial reporting requirements for small businesses, and reduced air passenger waiting times at customs by introducing the SmartGate passport control. These are just some of the measures designed to free up time for business and the public and allow them to get on with their lives.
What further plans does the Government have to improve regulation and cut red tape?
Probably the most important but unglamorous part of the plan has been to change the culture of reflex regulation that had built up within Government departments over the last 10 years, when they had got into the habit of thinking that every problem had to be fixed with a new regulation. We have encouraged them to plan their regulations each year, to sort out which ones are prioritised to encourage economic growth, and to drop those that are unimportant. But there is much more to do. The Government has specific changes under way to the Building Act, the Resource Management Act, and the Securities Act, and we intend to publish progress reports annually.
Is the Minister aware that the lack of proper regulations, also known as red tape, has made New Zealand an easy target for overseas criminals using the company registration process to set up bogus companies to facilitate money-laundering, tax evasion, and fraud internationally?
I understand there has been some concern in that respect, and there have been measures taken recently that we are yet to legislate—
There is a bill coming before the House to deal with some of those issues. The Government has spent quite a bit of time in getting international anti - money-laundering requirements into place, and that will also help.
How long will it be before the Government introduces regulations, also known as red tape, to introduce new law to close these loopholes in the company registration process and stop the damage being done to our reputation as a good place to do business?