Appendix 1: Further information on New Zealand's regulatory management system
The Treasury is responsible for managing and monitoring New Zealand's regulatory management system. We report to both the Minister of Finance and the Minister for Regulatory Reform, who share the ministerial responsibility for the regulatory reform portfolio. Our system role is complemented by the State Services Commission and State Sector Performance Hub's focus on overall state sector performance.
Where we have come from
The government has had some form of regulatory impact analysis (RIA) requirement on the flow of regulation since 1998. The RIA system has developed and evolved over time. It now has broad coverage and is widely accepted by departments, and expected by Ministers. The best departments have incorporated RIA into their standard policy approach, both improving the quality of their advice and reducing the compliance burden of the regulatory impact statement (RIS) process. The Treasury offers both ad hoc assistance and formal training to departments to help lift capability.
Formal regulatory stock management requirements are a more recent development. Since the early 1990s, there has been a number of compliance cost reduction initiatives run by the former Ministry of Economic Development, including omnibus bills to remove red tape, but no systematic requirement on departments to undertake on-going reviews of their regulatory stock. Since the Treasury gained the regulatory management oversight function in 2008, we have begun to build a stock management system which now consists of:
- Best Practice Regulation assessments of key regulatory regimes
- regulatory scanning of existing legislative instruments on an ongoing basis
- annual regulatory plans of expected new regulation, or review of existing regulation
- Regulatory Review Programme, and
- Omnibus Reform Bills.
The development of this system is characterised by experimentation and learning. Working in consultation with departments, we try approaches to see if they work and adjust as we go to improve effectiveness. There is an on-going challenge to strike the right balance between developing an effective stock management system while managing the compliance costs we impose on departments.
New developments
The new initiatives agreed by Cabinet on 4 March 2013 complement our existing approaches to improving regulatory performance. The expectations for regulatory stewardship set a direction for lifting our performance and provide a benchmark for measuring capability and outcomes, such as through departments' annual Regulatory System Reports.
The proposed legislative disclosure requirement, also agreed by Cabinet on 4 March, will indicate the key quality assurance processes that a piece of legislation has been subject to in its development, and highlight features or impacts that warrant particular scrutiny. The requirement for a disclosure statement will be implemented by administrative means ahead of the enactment of the legislation, in order to inform the passage of legislation. The new obligation is likely to apply to all Bills submitted to LEG Committee for approval from July 2013. Treasury will be issuing guidance on preparing disclosure statements in May 2013.
In addition, Treasury is currently updating the Regulatory Impact Analysis (RIA) Handbook, and a revised version will be released by 1 July 2013. Changes to the Handbook will address areas where improvements in RIA analysis are needed and support agencies in meeting the new disclosure requirements.
In light of the above Cabinet decisions, Ministers will no longer need to certify compliance with the commitments in the Government Statement on Regulation: Better Regulation, Less Regulation in papers containing regulatory proposals. The agency disclosure statement included in RISs also no longer needs to indicate whether any of the policy options are likely to have effects that may not align with the commitments in the government statement.
The diagram below illustrates how the expectations for regulatory stewardship and the new disclosure requirement fit within existing approaches for improving New Zealand's regulatory performance.
