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Guide to Cabinet's Impact Analysis Requirements

5. Developing a regulatory proposal

Impact Analysis is required for any government policy initiative that includes consideration of regulatory options (that is, options that will ultimately create, amend, or repeal primary or secondary legislation).

Cabinet papers that include a regulatory proposal must be accompanied by a Regulatory Impact Assessment, unless an exemption applies (see Section 7 Exemptions from providing a Regulatory Impact Assessment).

This includes papers submitted to Cabinet seeking:

  • decisions to introduce legislative changes that are merely enabling (the substantive decisions as to whether and what sort of intervention will be made later), including creating or amending a power to make secondary legislation
  • decisions to create, or amend, a statutory authority to charge third parties to cover the costs of a government activity (ie, cost recovery proposals)
  • the release of discussion documents that include options that may lead to regulatory change
  • “in principle” policy decisions and intermediate policy decisions, particularly those where regulatory options are narrowed down (eg, limiting options for further work/consideration)
  • a negotiating mandate for, concluding, or seeking approval to sign, an international treaty with regulatory impacts
  • to inform Cabinet of a Minister's decision to make secondary legislation under an enabling power in an Act.

A Regulatory Impact Assessment must be provided when papers are submitted to Cabinet committees for policy approval. In rare circumstances, the policy proposal and draft legislation may be submitted together. In these cases, the usual procedure is for the paper to be submitted to the relevant Cabinet policy committee rather than directly to the Cabinet Legislation Committee (LEG).

During the parliamentary process, it often becomes necessary to amend a bill. The policy content of the amendments may be such that further approvals from Cabinet are needed for new policy or to alter existing policy approvals. If so, the original Regulatory Impact Assessment should be updated to indicate how the changes affect the agency's Impact Analysis (eg, how they alter the nature and/or magnitude of the impacts).

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