KEY POINTS:
ACT Leader Rodney Hide's attempt to pass a law cutting red tape looks set to be shot down by MPs because they fear it could see Parliament's law making questioned in the courts.
The Regulatory Responsibility Bill went into select committee for examination with near unanimous support from MPs, but it has emerged with a recommendation for it to be thrown out.
Mr Hide has campaigned hard for the bill which proposed reducing the regulatory burden faced by businesses and blocking laws or regulations taking away property or common law rights, without due reason or compensation.
However the commerce select committee said it did not think the bill would not work as it would create legal headaches.
It instead called for a "high-level expert taskforce" to look at alternative options to cut through red tape.
Businesses have long complained about being tied up in overly bureaucratic rules and the committee said the bill was popular.
"We acknowledge the significant public support demonstrated in submissions on this bill for improving the process and framework for making and reviewing regulation," the committee's report said.
"We considered carefully the 189 submissions we received, and sought advice on a number of options for progressing this bill. However, there was little agreement amongst us and submitters as to the appropriate details for such a framework."
The committee said it considered three options:
*A regulatory impact statement when a Government bill was introduced or when regulations were tabled. This would predict the impact and cost of regulations. At present it is a Cabinet requirement that the explanatory note to most laws have such a statement.
*A regulatory impact statement and a ministerial certification as to whether the proposal complied with Cabinet guidelines.
*Proceeding as Mr Hide's bill suggested by requiring that those drawing up laws and regulations too be "guided" by certain principles such as no reduction in property rights, personal security and liberty without compensation.
It also proposed much tougher regulation impact statements and regular review of all existing legislation to see if it was working and what it was costing.
The committee said writing regulation impact statements into law would create "litigation risks", which means the MPs feared people testing in the courts whether proper process had been followed when passing laws.
The committee said it may be better to put regulation impact reviews into standing orders. These are the rules of Parliament which courts are reluctant to get involved with.
The report said MPs considered they did not have enough information to endorse any option.
The committee called on the Government to set up a high level taskforce reporting back on other possible ways of cutting red tape.
"We consider that the bill as introduced should not proceed. Although we are supportive of improving regulatory review and decision-making processes, we consider that more work is needed before any such legislation should be considered," the report said.
The bill has little chance of proceeding as the committee has four Labour MPs, four from National and one independent.
There was no minority report, which indicates the vast majority in Parliament want the bill thrown out.
- NZPA
