While the Act Party most frequently makes headlines as a culture war insurgent, its raison d'être was to be a party of economic reform that could finish what Rogernomics started.
David Seymour’s newly established Ministry of Regulation harks back to this original calling and has the potential to be a third pillar in the economic governance of New Zealand.
The Act Party leader told Parliament's Finance and Expenditure Committee (FEC) it could sit alongside the independent Reserve Bank and the Public Finance Act in the economic policy pantheon.
Thirty or 40 years ago, New Zealand had few rules for monetary policy. Now, the Reserve Bank Act ensured a transparent and independent relationship, he said.
And, before the Public Finance Act, leaders like Rob Muldoon would run up debt and inflation. If they won the election, they had two years to fix things before the next election.
“Now, thanks to Ruth Richardson, we have much better initiatives around finance and I think we can get to a similar place in terms of regulation, and for the same reasons,” he said.
Seymour said almost every sector had people claiming that regulation was excessive today, which was similar to complaints about fiscal and monetary policy in the past.
Reviews underway
The Ministry of Regulation was officially formed in March and has already begun its first two regulatory sector reviews: early childhood education and agriculture product approvals.
Recommendations from the first review are expected to be presented to Cabinet before the end of the year, with the second review anticipated in February next year.
The proof of the pudding is in the eating. But if the Ministry can lift the quality and efficiency of NZ’s regulations, it could have a meaningful impact on economic productivity.
Sector reviews, which seek out bad and burdensome regulations which already exist, are one part of the plan but it goes much deeper.
The ultimate goal is to improve regulatory behavior at all levels. This means rigorous analysis of costs and benefits for any new regulations, and more capable regulators on the ground.
Seymour’s ministry will assume responsibility for quality assurance of Regulatory Impact Statements from the Treasury and will also play a larger role in training those responsible for enforcing regulations.
He said many people experienced the regulatory workforces as being unprepared to actually help a sector or a community. Instead, they saw them as wielding power for its own sake.
“We hope that by building the capacity of regulators across the government in our role as a central agency, we can improve New Zealanders' experience with regulators,” he told the FEC.
Law change
Central to this effort is the upcoming Regulatory Standards Bill, which will enshrine the principles of good regulation and the new ministry’s legal powers into law.
A template for this bill already exists and was debated in Parliament in 2021 after Seymour introduced it as a member’s bill. It was voted down by the Labour Government.
It set a benchmark for good regulation, required lawmakers to certify new rules met that benchmark, and gave individuals the right to challenge that certification in court.
In 2021, Labour MP Rachel Brooking criticized the Bill’s principles as “controversial and … of uncertain scope and dubious orthodoxy”.
“This bill, if enacted, would add more red tape and confusion. The democratic process of electing politicians is to make policy choices. It is not the role of the judiciary to do this”.
It is not clear whether Seymour plans to bring back a version of this exact bill, or whether something new has been drafted. But he hopes to have it passed by the end of the year.
If he succeeds in realizing his grand vision, it could be the most significant reforms of this Parliament — despite being one of the least commented on.
The working definition of regulation, which will be fiefdom of the Regulation Ministry, covers any restrictions of the use and exchange of private property.
As Seymour puts it: “That is an enormous area of government activity with an enormous impact on New Zealanders' wellbeing that does not have the level of scrutiny, the laws, or the mechanisms that we have for public finance”.
15 Comments
This looks, at least superficially, as though there is going to a requirement to demonstrate the impact of regulation, rather than just being required to take it on trust that "it will be better."
The knock on from that is the models will need to be produced that performance can be measured against: accountability against measurable performance targets, as opposed to vague doctrinal expectations and unmeasurable reassurances.
It might also help depoliticise the public service if there's a need to plan what's done to meet specific objectives, so we don't start a debacle like the amalgamation of the polytechnics without clear objectives.
Of course: no measurable objectives means no measurement and no accountability.
Reversing that isn't going to be popular with the administrative classes: but they need to join the rest of us.
This is a great analysis of what the ministry could be capable of, and I like this approach.
However, just as critical, is will they also be required to demonstrate the impact of deregulation, rather than just being required to take it on trust that "it will be better."
While I see your point I generally disagree on principle. The default should be freedom to do what you want. And that freedom should only be removed when it is shown that harm occurs otherwise.
Your position is arguing control should be the default and freedom only allowed where it is proven to not be harmful. And people with that type of control never want to/will give it up no matter what.
Some things stay the same. Others get repeated, no matter how much we didn't learn last time.
https://www.youtube.com/watch?v=XBN9QTgjos8
One of the best series on politics, specifically the Westminster system, to have been produced. Another one that comes to mind is the one on banking. Not a lot different from today. Don't recall the series or episode.
update
a short clip from the banking episode
That’s because MBIE had a regulatory stewardship team and held the Govt regulation learning/training, as well as the fact it was responsible for about 14 regulatory systems. The expertise was mostly in MBIE, and imo benefited other policy areas MBIE has by cross-pollination. The ideological drivel new Ministry takes that away and ironically silos that expertise. FWIW, I definitely think regulatory policy and standards across NZ are poor and need a high-level strategic view to improving but that could’ve been through MBIE/Treasury having a team skilled to do so, instead of just reviewing and approving regulatory impact statements (or not as the current govt is ramming legislation through without them!)
Seymour’s ministry will assume responsibility for quality assurance of Regulatory Impact Statements
But we don’t care about Regulatory Impact Statements anymore ever since the current government decided to just ignore them and pass everything under urgency anyway, right?
All local and central govt spending should go through socioeconomic cost benefit assessment or regulatory impact assessment & all of which should be peer reviewed and made publicly available before spending decisions are made, however:
There seems little doubt that ACTs interpretation of good regulation is:
a) Economy = 1
b) Social = 0
c) Environment = 0
"before the Public Finance Act, leaders like Rob Muldoon would run up debt and inflation. If they won the election, they had two years to fix things before the next election." - hhmmm not sure that's been working so probably not an ideal comparison. Or perhaps just setting the correct expectation :-D
Also, who is he representing when reviewing regulation, the public or industries that make donations to the government?
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