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Media Statement: Regulatory Impact Analysis (RIA) Evaluation Report

4 July 2013
Page updated 18 Mar 2014

Opening remarks to the Report launch, the Treasury 4 July 2013


Thank you very much for coming this afternoon for this presentation on the results of this year's external evaluation of regulatory impact analysis.

We are pleased to have Alex Sundakov, Ben Gerritsen and Isabella Gawith from Castalia Strategic Advisors to present their findings.

I will hand over to them in a minute, but I just wanted to say a few words about the background and context.

Over the last three years, Cabinet has considered nearly 500 Regulatory Impact Statements.  This is a major undertaking and I recognise the amount of work that this represents. Ministers take notice of what RISs say, and MPs and other stakeholders do read them carefully.  The task is worthwhile. 

Good regulation makes policies work. The RIA regime aims to improve the quality of advice given to Ministers, and ultimately improve the quality of decision-making in government.  It should encourage an evidence-based approach to policy development which helps ensure that all practical options for addressing the problem have been considered and the benefits of the preferred option not only exceed the costs but will deliver the highest level of net benefit.  Regulatory Impact Analysis should look at all the impacts of proposed policy, even where they are uncomfortable, so Ministers don't have to make decisions without all the available facts.

Cabinet reconfirmed its commitment most recently in March this year, as part of the regulatory stewardship expectations for departments.

These expectations outline how departments should be designing and implementing regulatory regimes, and their stewardship role in administering those regimes.

Specifically, they say that Ministers expect that departments will not propose regulatory change without (and I quote):

"clearly identifying the policy or operational problem it needs to address, and undertaking impact analysis to provide assurance that the case for the proposed change is robust and careful implementation planning, including ensuring that implementation needs inform policy, and providing for appropriate review arrangements"

Looking at that in more detail, before we propose new regulation, we need to test whether the problem it's supposed to sort out couldn't be better solved by a non-regulatory arrangement. We need to know benefits will outweigh the costs, that the regulatory solution will be proportionate to the problem, that it provides the right incentives, and that there won't be unintended consequences.

It's also important that there's been an appropriate consultation process – not just for the sake of the quality of the advice, but for the sake of transparency and helping everyone understand what you're doing.

Once the regulations are in place, our job isn't done. It's our duty to review how effective we're being. That means taking a hard look at whether the policy is having the impact we thought it would.

All of this should come through in the Regulatory Impact Statement (RIS).

The Treasury is committed to helping departments improve the quality of the RISs they provide to Ministers.  This latest evaluation report shows that there is some way to travel, and sets out some practical ideas for improvement.

Treasury will continue to offer advice and assistance to agencies by coming to Panel meetings, training staff, and of course by offering feedback on regulatory proposals.

We are about to publish a revised version of the Regulatory Impact Analysis (RIA) Handbook. Our aim in this is to provide you with useful advice about RIA requirements and how to fulfill them drawn from what we've learned from experience since 2009 (when the previous edition was published).

Commissioning this review is part of the ongoing push to raise standards. This is the fifth independent review of regulatory impact analysis. This year's report is based on 65 of the RISs that were submitted to Cabinet during 2012.  I know that the individual evaluations have already been circulated.  I hope that today's presentation and discussion on the general themes will provide you with the tools and encouragement to continue lifting your performance.

James Sergeant
Regulatory Impact Analysis Team


The 2013 Regulatory Impact Analysis Evaluation is available at:
http://www.treasury.govt.nz/publications/guidance/regulatory/riareview

 

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