For public and regulatory lawyers, the Ministry of Regulation is a source of some fascination. As a brand new ministry, the Minister and officials are somewhat ‘building the plane as they fly it’. 

The Ministry’s recently released strategic intentions, and the launch of its second review, has brought some welcome insights into the Ministry’s intended role. 

The Ministry’s stated purpose is to improve the quality of regulation in New Zealand, which the Minister of Regulations says is in “freefall”. Over the next 12-18 months, the Ministry says it will be prioritising five main areas of work:

• Undertaking two regulatory reviews: Early Childhood Education sector review and, recently launched, the Agricultural and Horticultural Product regulatory systems review
• Improving the way regulatory systems are planned and implemented
• Progressing the development of a Regulatory Standards Bill
• Continuing to build capability and capacity across regulatory agencies, and
• Establishing the Ministry as the central steward of the regulatory system. 

As the Ministry finds its feet, we now have a better idea of the Ministry’s approach to reviews, how relevant industries can have their say, and how the Ministry and Minister of Regulations will fit within New Zealand’s political and legal system. 

Review principles 

The Ministry wants to ensure rules and regulations enable New Zealanders to do “more”. The aim of the regulatory reviews is to find out from those impacted by regulations how they could be or should be improved to support better outcomes for all New Zealanders.

The terms of reference for each review are designed with the specific industry in mind so there will naturally be some key differences in principles and approach. 

However, the two current reviews give us insight into the principles and approaches that the Ministry will likely apply to future reviews. 

1.    What is the problem? 

The Ministry is focused on clearly understanding the problem being addressed by the regulations, and whether the regulatory systems are achieving their stated purpose. General questions each review will cover likely include:

• What market failures or other problems are the regulations seeking to address?
• What market failures or other problems are the regulations failing to address?
• What is the evidence?

2.    Cost and benefit lens 

In defining the ‘problem’, the Ministry is also concerned with whether the benefit of imposing regulations on the relevant industry outweighs the cost. In assessing this, the Ministry will consider who is receiving the benefit, who is bearing the cost, and whether the benefits are reasonable, affordable, and proportionate to the cost.

3.    Ambitious scope 

The current reviews are ambitious. They are both very broad and look at any regulatory system that affects the relevant sector, with a few surprisingly specific carve-outs. For example, both reviews specifically note that they will not consider individual complaints about regulatory staff or about applications. The funding levels of the sectors are also out of scope, except to the degree that funding mechanisms create regulatory impacts or are otherwise relevant to the cost/benefit analysis. As these characteristics are common across multiple regulatory systems, similar exclusions are likely to apply in future reviews. 

As the two current reviews are still in progress, the challenges of this wide scope have not yet manifested. The ambitious scope of these first two reviews may be refined over time.

4.    Consultation and timeline

A key part of each review is consultation with relevant stakeholders. Each regulatory review will be developed with a tailored engagement plan that will take into consideration particular audiences and stakeholders. For instance, while both reviews opened for public consultation, the Agriculture and Horticulture Products review differs slightly in also having a Sector Reference Group to assist. The Sector Reference Group is being used to test the findings, analysis, and options developed throughout the review. It is interesting that the Ministry chose to have a sector reference group for the agricultural and horticultural products review, and not for the early childhood education review. It is currently unclear whether this will be a feature in future reviews.

Now that the engagement phase is complete, the information will be analysed and the findings tested before a report is developed for the relevant ministers. Development of a cabinet paper seeking decisions on recommendations and next steps will follow. 

For the current reviews, from the time the terms of reference were announced, each review is expected to only last seven to eight months. Given the wide scope of the reviews, this appears to be a tight timeframe, perhaps reflecting the Ministry’s focus on minimising bureaucracy. However, time will tell whether this timeline will be extended, or the scope of reviews narrowed to meet the time frame. 

What’s next? 

The Ministry hasn’t announced its third review yet, but it has said that its reviews will focus on regulatory issues of national significance, and it is currently developing a framework to assist in the selection and prioritisation of future sector reviews. However, the Minister of Regulations and the Ministry’s Chief Executive gave some insight into the Ministry’s future focus when they appeared before the Finance and Expenditure Committee in June 2024. They suggested that sector reviews will be driven by public demand, but that they may potentially look at the finance regulatory systems, or medical licensing system next. You can read our article about this here.

Stewardship for regulations and clashes between ministers

According to the Ministry’s statement of intention, its main responsibility is to become a strong voice inside government to make continuous and enduring improvements within New Zealand’s regulatory system. How this will operate in practice and in line with Parliament’s supreme law-making abilities remains to be seen. 

Recent ministerial scuffles may be indicative of what is to come. There are a couple of recent examples, which highlight that this process might not be smooth sailing. Minister for Regulations, Hon. David Seymour recently overrode the advice of the Ministry for Business and Innovation and Minister of Commerce, Hon. Andrew Bayly, recommending the scrapping of fees regulations for the Buy Now, Pay Later sector. And the week before, Seymour had labelled calls for tougher regulation of the grocery sector as “outlandish”, while Minister Bayly lent his support to the suggestion. 

These instances highlight the potential challenges the Ministry - and ministers - may face in navigating the complexity of regulatory reforms, and balancing tensions and different viewpoints within the government.

Get in touch 

If you would like to discuss the impacts of regulations on your business, or possible opportunities as the Ministry plans its next review, get in touch with one of our experts. 

Special thanks to Brooke Clifford and Alice Mander for their assistance in writing this article.