5 Conclusion
When government is evaluating regulation, it is crucial that the total costs and benefits to society are considered, as far as possible, rather than focusing on fiscal costs to government or compliance costs to business or consumers and ignoring less explicit costs (ie, falling victim to fiscal illusion). To increase the likelihood of this happening, and of thereby reaching a higher quality decision, we need to consider the incentives on all those involved in the decision-making process, as well as assessing fundamental design issues such as education and enforcement to ensure the desired outcome is feasible.
The standard mechanism for achieving these objectives is through a regulatory quality regime requiring consideration of all of the above factors and providing for processes to ensure such consideration actually occurs and is properly communicated to decision-makers and other stake-holders. This regime needs to be fully integrated into governmental processes and reinforced from the highest levels of government. New Zealand has made progress towards such an outcome, but still has room to improve.
The most significant areas for possible improvement in regulatory design in New Zealand appear to be in enforcement and oversight of the Regulatory Impact Statement regime and carefully designed extensions, such as stronger requirements to build monitoring and evaluation strategies into new regulatory proposals, and extending the scope of the regime to cover types of regulation that do not involve statutes or Orders in Council (the new bylaw impact requirements are an example).
Achieving high quality regulation requires incremental progress on a number of mutually supporting initiatives, with continued reinforcement of the underlying messages and careful building of the necessary institutions and practices. That progress will have to occur in the context of increased interaction with Australian practices through institutions such as the Council of Australian Governments and the obligations of the Trans-Tasman Mutual Recognition Arrangement.
Ultimately the environment must require who “are too willing to believe that there is a legislative and regulatory answer to every problem” to establish both the significance of the problem and the merits of the solution and its alternatives both before they proceed and after the event (Lochner, 2000:841).
