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Guide to Cabinet's Impact Analysis Requirements

7. Exemptions from providing a Regulatory Impact Assessment

Impact Analysis is encouraged and always recommended in the development of advice on any form of government policy initiative. However, a Regulatory Impact Assessment is not required for certain types of regulatory proposals.

Exemptions are granted by Treasury. You must apply to the Regulatory Quality Team for an exemption and provide evidence of being granted that exemption to Cabinet.

7.1.  Grounds for an exemption

The grounds for an exemption are grouped under the following categories:

  • technical or case-specific
  • minor impacts
  • discretionary.

Technical or case-specific exemptions

Proposals do not require a Regulatory Impact Assessment if they meet any of these conditions:

  1. suitable for inclusion in a revision Bill (as provided for in the Legislation Act 2012)
  2. suitable for inclusion in a Statutes Amendment Bill (as provided for in Standing Orders)
  3. would repeal or remove redundant legislative provisions
  4. provides solely for the commencement of existing legislation or legislative provisions
  5. solely a request to authorise spending in Appropriation or Imprest Supply bills
  6. solely a request to confirm secondary legislation that has already been made
  7. implements deeds of settlement for Treaty of Waitangi claims, other than those that would amend or affect existing regulatory arrangements
  8. brings into effect recognition agreements under the Marine and Coastal Area (Takutai Moana) Act 2011
  9. essential (the minimum necessary) in order to comply with existing international obligations that are binding on New Zealand.

These exemptions relate to the particular circumstances of a regulatory proposal. They include technical adjustments to improve the enforceability or clarity of existing law and transitional arrangements.

The 2017 changes to these exemptions include updated wording to better reflect their original policy intention.

Minor impacts exemption

Regulatory proposals that have no impacts, or only minor impacts, on businesses, individuals or not-for-profit entities do not require a Regulatory Impact Assessment.

This is the most commonly used exemption. It is sometimes referred to as the “catch-all” exemption - the proposal does not fit the conditions of the other exemptions, but given the circumstances, it is likely to have “no or minor” impacts.

The meaning of “no or minor impacts” is subjective. Often common sense will dictate whether the impacts of a regulatory change are actually minor. Ultimately this interpretation is decided by the Regulatory Quality Team based information provided by, and/or discussion with, the agency.

A wide variety of proposals fall under this exemption. Common themes include:

  • technical adjustments that do not fall under the technical or case-specific exemptions but are likely to no or very low impacts
  • changes to the internal administrative or governance arrangements of the New Zealand government which are likely to have no or very low impacts outside of government (eg, the transfer of responsibilities, staff, or assets between government agencies)
  • changes to statutory governance arrangements being implemented through a Treaty of Waitangi settlement where these changes are likely to have no or only minor impacts.

You may encounter marginal cases, or instances where the nature of the changes makes it less certain what the impacts will be. In these situations, the minor impacts exemption is more likely to apply where the proposal meets one of the following conditions:

  • it has localised impacts, or the implications are limited to a small group of affected people or parties
  • it clarifies an area of current law, or amends the purpose statement of legislation, consistent with the objectives of that regulatory system
  • it codifies, rather than changes, an existing practice
  • the Net Present Value is expected to be low over the medium-term (when all of the impacts can be monetised).

Conversely, the minor impacts exemption is unlikely to apply where the proposal's effects include any of the following:

  • having regional or national impacts or widespread implications;
  • substantially altering the nature or objectives of the relevant regulatory system;
  • creating or amending the legal rights or responsibilities of government agencies or agency chief executives
  • affecting policy processes which are public facing (eg, consultation requirements).

This does not preclude the proposal from being exempt on other grounds.

Discretionary exemptions

A Regulatory Impact Assessment may not be required where both of the following are true:

  • formal Impact Analysis is not the best and most cost-effective way to ensure that Ministers have access to relevant information to inform their decisions, and
  • your regulatory proposal fits within one of the following situations:
    1. the relevant issues have already been adequately addressed by existing Impact Analysis
    2. a Regulatory Impact Assessment would substantively duplicate other government policy development, reporting and publication requirements or commitments
    3. the government has limited statutory decision making discretion or responsibility for the content of proposed delegated legislation.

The relevant issues have already been adequately addressed by existing Impact Analysis

This is most likely to arise where:

  • final decisions are being made post-consultation, where Impact Analysis has already been provided to Cabinet before that consultation
  • decisions are being made about the content of delegated legislation that had some previous consideration when the enabling power to make delegated legislation was proposed.

A Regulatory Impact Assessment would substantively duplicate other government policy development, reporting and publication requirements or commitmentsThis is likely to include:

  • situations where a business case is required for a project involving substantial capital investment
  • the preparation of a discussion document
  • the preparation of an extended National Interest Analysis.[2]

The government has limited statutory decision making discretion or responsibility for the content of proposed delegated legislation

This is intended to cover situations where the government is essentially approving proposals developed through and established policy process done by an external party.

Discretionary exemptions may granted subject to conditions, such as the inclusion, provision and/or publication of specific information. For example, the elements of the Impact Analysis framework may be required to be incorporated into a discussion document or Better Business Case.

Note

  • [2]In accordance with the Cabinet Manual and Standing Orders 397 to 400, all multilateral treaties or “major bilateral treaties of particular significance” concluded by New Zealand require the preparation of a National Interest Analysis (NIA). Drafting Guidelines produced by the Ministry of Foreign Affairs (MFAT) in collaboration with the Regulatory Quality Team require that, for treaties with regulatory impacts, the NIA also includes all the requirements which would otherwise be considered in a Regulatory Impact Assessment (becoming an “extended NIA”). A separate, standalone Regulatory Impact Assessment is therefore not required when an extended NIA is prepared.
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