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Agency Disclosure Statement

This Regulatory Impact Statement (RIS) has been prepared by, and is the responsibility of, the Treasury. It analyses a legislative option, and a range of supporting non-legislative measures, intended to encourage better quality legislation.

Limits on the Options Analysed

The core analysis in this RIS is limited to measures based on those recommended in an earlier RIS prepared by the Treasury, entitled "Regulating for Better Legislation - What is the Potential of a Regulatory Responsibility Act?". The analysis is therefore founded on, but does not revisit all of, the matters covered by the earlier RIS.

This earlier RIS, dated 2 February 2011, considered 5 different regulatory options for encouraging better quality legislation, and explained why "Option 5" was Treasury's preferred legislative option. Subsequently, the following commitment was included in the 2011 National-ACT Confidence and Supply Agreement:

"The Regulatory Standards Bill will be included in the continuance motion for the new Parliament, and the Minister for Regulatory Reform will work closely with the Minister of Finance to achieve a mutually agreed outcome, based on Treasury's preferred option (option 5)."

The range of legislation covered by the analysis is limited to legislation proposed or made by the Executive (the government and its agencies). Extending the coverage to include other legislation, such as Local, Private or Members Bills, is not considered, as the responsibility for their preparation falls on the sponsoring member, and Parliament sets expectations for its members through internal rules, such as Standing Orders.

Limitations of the Analysis Undertaken

The nature and rigour of the analysis of options is limited by the need to rely on subjective judgement about the nature and size of the potential behavioural impacts.

That reliance arises because:

  • there is limited international experience and analysis of similar legislative requirements in similar institutional settings for us to draw upon; and
  • we have no reliable way to predict:
    • the nature and extent of the Parliamentary and public use of the proposed disclosures for Bills and delegated legislation; or
    • the dynamic effects of requirements and expectations that seek to encourage, but cannot force, changes in the attitudes, behaviour and capabilities of politicians and public officials.

The attempted quantification of costs is limited to the expected costs of direct compliance with any obligations proposed. It does not include estimates of further costs that departments may voluntarily decide to incur to improve the effectiveness of their underlying QA processes, or that external parties may decide to incur to make use of the additional information published.

  • Cost estimates for the production of disclosure statements are ballpark figures that draw on existing information about volumes of new legislation, and information about completion times provided by a small number of agencies that produced test disclosures for some pieces of recent legislation.
  • Cost estimates for other support arrangements in Packages 1 and 2 are judgements informed by brief discussions with the agencies or people involved.
  • Cost estimates for elements of Package 3 are highly speculative, as it identifies areas for development, with further work needed to define specific initiatives.

Consistency with Matters in the Government Statement on Regulation

None of the measures considered in this RIS are likely to have a direct impact on business costs, existing property rights or market competition.

Note that, in principle at least, almost any of the suggested measures could be progressed without passing legislation. The Government is not currently prevented by law from doing any of these things, and no legal sanctions are suggested for any failure to comply with the proposed obligations. The case for a legislative response therefore rests on our judgement that:

  • placing the proposed obligations in legislation provides a more credible, enduring commitment to comply that will underpin desirable behavioural change; and
  • this advantage is sufficient to exceed the potential disadvantages (the risk of locking in requirements that are not as useful as hoped, and the risk of unexpected judicial involvement).

Interactions with other Legislative Initiatives

The analysis assumes that the chosen package would effectively replace the existing Regulatory Standards Bill, presently being considered by the Commerce Committee.

Some of the legislative proposals here would make use of provisions and terms set out in the new Legislation Act 2012, such as the definition of legislative instruments and disallowable instruments, and the statutory role of the Parliamentary Counsel Office.

Further Policy Work Required

If elements of Package 3 are progressed, further policy work will be required to identify the specific actions to give them best effect. Ideally, that further work would be integrated into the wider Better Public Services reform agenda for the state sector.

Jonathan Ayto
Principal Advisor,
Regulatory Quality Team,
The Treasury
29 January 2013

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