Regulatory Standards Bill - Submission of The Opportunities Party

The Opportunities Party (TOP) is a political party founded in 2016. It exists to enact policy that affords every Kiwi equal opportunity to pursue their potential, in ways that are socially, economically, and environmentally sustainable. It aims to address challenges at a fundamental level, rather than tinkering at the edges.

 

We wish to make the following comments:

If passed into law this Bill promises some combination of two possible outcomes. Neither is desirable.

• It causes no meaningful change in regulatory behaviour but adds a layer of duplication to the regulatory process that imposes compliance costs to every piece of primary and secondary legislation. This is the outcome anticipated in the advice of the Ministry of Regulation.
• It changes regulatory decisionmaking in line with its stated principles, which are incomplete and fail to properly account for the wide range of legitimate regulatory objectives future governments might pursue. Over time this would decrease the overall quality of New Zealand regulation. This is a particular concern for secondary legislation and potential judicial reviews of it. 

The proposed principles are inappropriate

There is nothing inherently wrong with the Bill’s core objective of preventing unjustified “takings or impairment” by the state. Indeed, citizens of common law jurisdictions benefit from perfectly adequate rules and norms that achieve this end and trace their genesis back past Magna Carta. However, the Bill errs by unduly elevating one specific conception of the purpose of regulation above other legitimate interests. 

• The Bill’s focus on the financial impacts of regulation fails to account for the myriad other impacts that regulation could have on individuals and communities, for example public health outcomes or environmental harms. 
• The Bill fails to describe the financial impacts it seeks future governments to compensate individuals for. It is unclear for example the extent to which intangible assets, opportunity costs and uncertain anticipated returns are covered. This would appear to impose a near limitless liability, though perhaps fortunately not a binding one. 
• The Bill unduly privileges a very specific status quo. By focusing on the prospective financial impacts of regulation it fails to account for the costs imposed by regulatory decisions in arriving at the current point in time; for example the very real costs of historical dispossession of land. 
• The Bill flattens regulatory considerations of all kinds into a single narrow spectrum of regulation and de-regulation. It fails to account for the realty that the objectives of regulation are myriad and vary significantly based on the subject matter. Regulatory best practice (for example as set out by the OECD) fully accepts that different subject-matter warrants the application of different starting points and frameworks for analysis. For example, rigorous application of the precautionary principle might be appropriate for the handling of novel pathogens, but somewhat less so for the introduction of low-risk foods, and not at all for commercial software development. 

 

We wish to make the following recommendation:

Withdraw this Bill. 

Improving regulation-making processes and enhancing the accountability of the executive to Parliament are worthy objectives. They should be advanced through a less nakedly ideological frame and take account of the full range of societal interests in the outcomes of regulation. Ideally they should involve substantive and meaningful prior engagement with the public at large, beyond the scope of what has thus far been undertaken and with a view to genuinely capturing a consensus view of regulatory best practice. 

The failure to meaningfully attempt to generate consensus means that if this Bill is passed it will inevitably eventually be repealed and the institutional arrangements it establishes will be unwound. Reversals of this sort impose direct costs on taxpayers, but also cost New Zealand dearly in terms of uncertainty. This directly increases the cost of capital for necessary business and public investment.