The government’s next 100 day plan is out: number 15 is a commitment to a second “regulatory sector review to identify and remove unnecessary red tape”. 

What does this actually mean?

The details of the role of Ministry are currently somewhat uncertain. The Bill to create and guide the Ministry is under development and undergoing internal consultation within the coalition government. 

However, on 18 June, the Minister and Chief Executive appeared before the Finance and Expenditure Committee and gave some more detail about what would be involved. We summarise this for you below.

Regulatory Standards Bill

The Regulatory Standards Bill is intended to create a new regime for the development of regulations. It will have a role in reviewing both new and existing regulations.

The Minister is fond of comparisons with the Public Finance Act 1989 and Treasury. Like the PFA, he sees the new Bill as providing a set of principles and a framework for the setting of regulations across Government, allowing the Ministry to be the “public advocate” for good regulations.

The principles of review

The Minister says his Ministry will be driven by economic analysis - seeking to define what it believes are the actual problems the regulations are attempting to solve, and considering whether the benefit of setting a regulation outweighs the cost of doing so on the individuals or sector being regulated.

Many of the Minister’s comments highlighted his view that regulations are as something which prohibits the use and exchange of private property and development generally. He was pressed on this by members of the Committee - particularly as the first sector under review is Early Childhood Education.

Role in government

The Ministry will be a central agency. As such, the Ministry intends to work across the broad programme of government to seek to create consistency in the setting and developing of regulations.

To assist with this:

1. There is an intention to create an obligation in the Cabinet circular so that the Ministry is consulted by other government departments in the early stages of development of any new regulations.
2. For existing regulations, it seems that the Minister’s plan is to put a series of decisions to Cabinet proposing to change or remove rules and regulations that don’t ‘stack up’ to the new principles developed under the Regulatory Standards Bill. We expect this is the role of ‘sector reviews’.

Whether the Ministry will do more than provide advice on new regulations, however, remains unclear. The Minister stated that the Ministry will not have a veto power over new regulations, but intends to provide the infrastructure for more consistent regulations (again drawing on the analogy with the PFA and Treasury).

What this means for you

The Minister plans to review a new sector every quarter.

1. A review of the animal compounds and veterinary medicine sector is next on the horizon.
2. The Minister expressed interest in reviewing the finance, medical licensing, and agricultural sector next year.

Sector reviews will be demand driven. The Minister encouraged sector representatives to approach them with concerns. They are specifically looking for information about the barriers created by the regulation, and how this has a negative effect on those being regulated, as well as the consumers or users of the sector.

While some questions remain about the exact powers of the Ministry and Minister for Regulations, the time is ripe for getting in front of the Ministry with concerns about over-regulated sectors.

We will continue to watch this space closely and bring you updates, especially as the Regulatory Standards Bill opens for public or sector consultation.

Get in touch

In the meantime, if you would like to discuss the impact of regulations on your business, or possible opportunities as the new Ministry gets underway, please get in touch with one of our experts.

Special thanks to Alice Mander for her assistance in writing this article.