Transparency, not ideology: The case for the Regulatory Standards Bill - Bryce Wilkinson

Our regulatory process needs more sunlight. Governments need to be upfront about the trade-offs they make when regulating, Bryce Wilkinson says. Photo / 123rf

THREE KEY FACTS:

• The Regulatory Standards Bill aims to improve the quality of regulation in New Zealand so regulatory decisions are based on principles of ‘good law-making and economic efficiency’.
• The Ministry for Regulation received almost 23,000 submissions on the Bill - about 80% of them in the final four days of the consultation period this week.
• The Bill, yet to be introduced into Parliament, is part of National and Act’s coalition agreement

Misinformation about the pending Regulatory Standards Bill is rife. Currently, there is no Bill, only a departmental discussion document. Submissions closed on January 13.

A Bill will need to be written, put to Cabinet, and taken to Parliament for a first reading. Public submissions to a Select Committee will follow. The public is not being shut out.

As to content, critics have attacked the proposed Bill as an ideological scheme to shrink government. That is fantasy. The proposal is about something far more straightforward: better informing New Zealanders about what their government is doing and why.

What does the proposal really do? It requires laws to be tested against long-standing legal principles and the net benefits for New Zealanders to be professionally assessed. Lawmakers are free to depart from these principles at any time. In so doing, they should declare the departure and give their reasons.

What if a minister declares compliance but someone disagrees? An independent board is to assess such complaints. But its findings are non-binding. Parliament can choose to do nothing. It remains sovereign as lawmaker.

In short, the proposal is primarily about helping Parliament and the public to be better informed.

This is why criticisms of it as a ‘dangerous ideological’ drive towards limited government are arrant nonsense. The proposed measures simply require governments to be upfront about the trade-offs they make when regulating. That requirement is non-partisan.

Hopefully, in some cases, greater transparency will change public opinion and thereby Parliament’s decisions. To oppose that is surely to oppose democracy.

It is common knowledge that our regulatory processes need more sunlight. Governments of all stripes have supported Cabinet guidelines with similar requirements, but compliance has been too mixed.

The proposal would raise the stakes for non-compliance. It makes these tests a Parliamentary requirement rather than a Cabinet requirement. And it incorporates a non-binding review process.

Why is it important? Laws and regulations touch every part of our lives. Bad regulations hurt real people. Look at housing. Restrictive land rules have helped drive prices through the roof, making homes unaffordable for many families and causing over-crowding for many who rent.

Or take the ban on personal injury lawsuits under ACC. While well-intentioned, removing this discipline likely made workplaces more dangerous by reducing accountability for negligence. The response has been a barrage of costly and sometimes ill-justified workplace safety rules.

Some critics attack the emphasis on principles like the rule of law, liberty and property rights as radical. But these aren’t new ideas - they’re bedrock principles of our legal system going back centuries. What is arguably more novel is their neglect.

The argument that protecting property rights only helps the wealthy doesn’t stand up to scrutiny. Yes, wealthy people own more assets, but low-income families surely suffer more when their security, property and freedom to work are ill-protected. They cannot afford to replace a stolen car or move to a safer neighbourhood. Protection for personal safety, autonomy and possessions is not a parochial matter.

Why do governments resist this? One obvious reason is that greater transparency is inconvenient. For example, it makes it harder for a government to push through partisan laws that favour a particular group at a greater cost to other New Zealanders. It would give opposition parties and the public more ammunition in such cases.

Within the public service, greater openness should bring more discipline to the partisan advocacy, that is intrinsic to its structure. Agencies must fight for their patch or silo - whether it is health, education, welfare or transport. Transparency is not always their friend.

The proposal aims to counter the inherent resistance to transparency. If we want people to trust the system, they need to understand the thinking behind decisions.

What about emergencies? The proposed requirements aren’t onerous. Future governments can still act decisively when needed - they just need to explain why. This balance between flexibility and accountability makes practical sense.

What about the compliance costs? The tests are ones that governments should apply Bill or no Bill. If passing such a Bill raises costs, that might be a good thing.

What about the claim that New Zealand has too many adverse outcomes because there is too little regulation? This misses the point. The proposal is about quality, not quantity. It permits more regulation, justified or not. It just tries to make ill-justified regulation harder by making that more transparent.

This isn’t radical stuff. It’s common sense, built on principles that have served us well for generations, but are now too easily ignored.

The bottom line is that this will be a modest Bill. It does not tie Parliament’s hands. It asks governments to be more open about when and why they depart from fundamental principles and tests. Compliance should enhance our democracy.