Seymour's red-tape monster: My Regulatory Standards Bill submission

An ideological bludgeon to be wielded against regulation that is in the public good

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My name is Ryan Ward.

My background: I am a Senior Lecturer in the Department of Psychology at the University of Otago. I have expertise in the history and social and political context of worldwide and New Zealand drug policy. I also have expertise in experimental design and research methods.

I strongly oppose this bill. The bill has been described as being about “transparent and sensible” regulation, holding ministers to account, and protecting the public from government overreach. In contrast to these descriptions, it is clear from the bill that it will set up a regime that is ideologically defined and dictated, will mire ministers and government departments in a whole new morass of bureaucratic requirements, and will hamstring any efforts by government to regulate in the public interest. Instead, the public will be at the mercy of corporate interests.

This appears to be the sole purpose of the bill, as it was initially drafted by the Business Roundtable, now the New Zealand Initiative. It seeks to put in place a system that makes passing regulation in the public interest so onerous and politically damaging that government departments will not even attempt to do so. The result will be a regulatory environment that is heavily shifted in favour of business interests at the expense of the public good.

There are two main aspects of the bill which will lead to this result: 1) the principles of responsible regulation, 2) the Regulatory Standards Board.

1. The Principles of Responsible Regulation: The principles, while they have been portrayed as common-sense principles, are in actuality deeply ideological. The Rule of law principle is fundamentally opposed to the idea that there are systemic factors that lead to inequalities which require differential treatment under the law to correct. Requiring all people to be treated “equally” before the law means that legislation that attempts to correct for systemic inequities will be judged as irresponsible and will be harder to justify.

   The principles prioritise property rights above all else and indicate that any time property is taken or “impaired” (a definition that is unclear) that the owner should be compensated for the property loss or impairment. The legal status of corporations in New Zealand together with part (iii) of this principle indicates that either the government, or the taxpayers will be required to compensate business if their property is taken or impaired by regulatory action. Given the fact that much of what constitutes regulation in the public interest and that is enacted by government might meet the definition of “taking or impairing” some aspect of corporate property (for example profits), this means that anything the government does to regulate in the public interest could be subject to this regulatory takings clause. This is unacceptable and will lead to an unwillingness by government to pass needed legislation if it might impact businesses or corporations.

   The other principles augment the individualist and libertarian framework of the bill, but the principles of the Rule of law and Good law-making are particularly egregious given the conduct of the sponsor of the bill in his official capacity as Minister and the legislative moves by his party. Much of the legislation that has been sponsored by his party and passed by the government violates both of these principles, in that it applies retrospectively and has been passed without proper consultation of any affected parties. Putting aside the questionable nature of these principles as the be all and end all of good law making, which other submitters have covered in detail, it is staggering that this bill sets out standards of law making that the Minister and his party seem uninterested or unwilling to follow themselves but intend to force upon all other lawmakers and legislation, both extant and proposed in the future.

   In addition, in a grotesque bit of irony, this bill itself violates the principles set out in Good law-making, in that its drafting process appears not to have consulted appropriate parties, considered the relevance and effectiveness of other existing legislation, considered whether the public interest requires the issue to be addressed, considered any other options that can address the issue, and considered who is likely to benefit (businesses and corporations) and who is likely to suffer a detriment (the public) from the legislation. In short, this bill breaks its own rules for good law making. It would be farcical if the possible outcome was not so serious.

2. The Regulatory Standards Board: The bill sets up an unelected board, hand-picked by the Minister for regulation, which is granted sweeping powers of inquiry over all levels of government, for the purpose of gathering information and compiling reports as to whether legislation meets the guidelines for good law making. It is clear that this Board will serve as the public face of the ideological position of the principles, with reports and media releases haranguing and criticizing law makers and ministries for suggesting laws and regulation that falls afoul of the principles. They will also have the power to require compliance with any number of time-consuming and burdensome tasks under the guise of gathering information for their reports. In this way, although the bill is framed as being to cut “red tape” it will introduce much more red tape, pointless bureaucracy, and targeted weaponization of administrative privilege to slow down and kill legislation and regulation that falls outside of the narrowly-defined ideological limits of the principles. Indeed, the bill seems custom-designed to cripple the ability of government to govern (the NZ Initiative paper it is based on is called Constraining Government Regulation), an unsurprising goal given the ideological position of the ACT party. Furthermore, only the Minister for Regulation and the Attorney General can offer guidance on how the principles are to be interpreted, setting up a hugely variable interpretive system depending on the political and ideological alignment of the individuals who occupy these positions at any given time.

   For these reasons, even though the bill is “non-binding” it will result in a phenomenon known as “regulatory chilling” where Ministers and government bodies will be hesitant to pass legislation and regulation in the public interest for fear of running afoul of the Regulatory Standards Board and having their image tarnished in the public sphere. This means that the board will have a de-facto veto on any legislation that doesn’t align with their principles and they will not be required to answer to anyone aside from the Minister for Regulation. This means that regardless of the desires of the public, the board may do what it wants and the public can have no say. This political pressure will encourage legislation to include the principles of responsible regulation, which will lead to the problems discussed above. What we will be left with is a legislative environment that is heavily tilted towards corporations and away from the public interest.

The Regulatory Standards Bill has been attempted three times in the past 20 years and has been rejected by Parliament all three times. The current version of the bill is not substantively different than previous ones. It does not address the concerns that have been brought up with previous versions. It has been deemed unnecessary by the sponsoring Minister’s own ministry. It duplicates legislation already in place and is at odds with other regulatory guidelines. If adopted, it could require the government and taxpayers to pay businesses and corporations for laws that protect them from being taken advantage of by those same businesses and corporations. It does not adhere to its own principles of responsible regulation. Far from being an objective measuring stick for all legislation, it provides an ideological bludgeon to be wielded against regulation that is in the public good.

I recommend that the bill be rejected and not considered again. This is a pointless vanity exercise and a libertarian fever dream that has no place in Aotearoa.