4 Trans-Tasman arrangements
The implications of subsidiarity for assignment of roles and design of arrangements for accountability and participation need to be considered when attempting to harmonise regulatory regimes across borders (Guerin, 2001), given the interactions required between jurisdictions. For New Zealand, the key cross-border arena is the trans-Tasman one.
Managing different depths of harmonisation along the length of the regulatory chain, from policy through to enforcement, is complicated enough in itself, but becomes even more so when different levels of jurisdictions can be involved at different stages. This is already an issue with trans-Tasman harmonisation, for example food standards regulation where state and territory government are directly represented.
4.1 The purpose of trans-Tasman arrangements
It is crucial before getting into the details of designing cross-border allocations of functions within Australasia to determine the objective(s). These could include (this is a non-exhaustive list) achieving economies of scale and scope, avoiding destructive regulatory competition, closer economic or political integration or creating a world recognised centre of regulatory expertise.
In addition, we need to determine what we are trying to optimise – the outcome for New Zealand, for Australia, for Australasia, for APEC or for the world?
The goal(s) of co-regulation in each policy area should be determined before a new structure is established and the more that the answers for Australia (or for each state of Australia) and New Zealand differ, the more significant will be the implications for institutional design. When the objective is a solution that is optimal at a national or local/regional level, subsidiarity would suggest that a trans-national solution is not ideal. Failure to address these issues risks compromising any new structure which could therefore be ineffective or worse than the status quo.
The relevant outcomes and goals will depend on the particulars of each proposal, the interdependencies between them and the longer-term strategic direction of the relationship (for each country).
This makes it difficult to predict broad outcomes. Much more work is required at both the detailed practical level and the higher political level before anything approaching firm forecasts for the extent of future Australasian regulatory arrangements can be developed.
4.2 Potential for gains
New Zealand’s ability to achieve gains from harmonisation with Australia will depend critically on the nature of the problem being addressed, the specific features of the sector concerned and existing constitutional and institutional arrangements in Australia.
It will be crucial to determine at an early stage how much initial and ongoing leverage New Zealand will have and what alternatives exist. Where Australia’s approach is already constrained by constitutional or other inter-governmental arrangements, harmonisation may either be impossible (for example because of differences between Australian states and territories) or constrained to an existing Australian pattern.
It will become increasingly important whether the Australian Commonwealth or States hold the authority to regulate in the relevant sector. The states may frequently be in a position to set the boundaries for the scope and depth of harmonisation. This may more frequently lead to situations where the depth of harmonisation within a particular sector varies significantly (for example trans-national standards, national testing and local enforcement).
It will therefore become increasingly important for New Zealand Ministers, officials and other stakeholders to be aware of the particular Australian constitutional and institutional arrangements in specific sectors prior to engaging seriously in any harmonisation exercise.
In Australia, subsidiarity is usually managed through a combination of strict constitutional frameworks and understandings of varying explicitness established though joint Ministerial and Officials groupings. These bodies, in which New Zealand has full membership and voting rights in relation to any decision involving the Trans-Tasman Mutual Recognition Agreement operate at several levels, Head of Government meetings, Council of Australian Governments (COAG), Premiers’ Conferences, Loan Council, Treaties Council, Ministerial Councils; and other Ministerial fora with four or less jurisdictions involved (Australian Government, 1999).
These complex decision-making arrangements, while lengthy and highly political, nay well be necessary to achieve a consensus that will allow an effective policy to be implemented. They can also, however, serve to make it difficult to alter any joint Australian position once reached.
The lack of any true supranational institutions within the trans-Tasman relationship also leaves scope for difficulties to develop, as any agreements must take the form of either rigid treaty provisions where the choice in any dispute may be to accede to the other party’s wishes or abrogate the entire arrangement, or legislation which is ultimately under the control of only one of the parties.
As far as application of subsidiarity is concerned, Australia’s approach is strongly shaped by constitutional limitations. New Zealand’s ability to shape trans-Tasman institutions from a different perspective is likely to be limited. If it is restricted simply to retaining a degree of national discretion, rather than having true influence on development and implementation of a joint approach, then the trade-offs between joint and independent action may be quite stark.
