Regulatory Environment for Business Growth
The quality of the regulatory environment is a key factor shaping the international competitiveness of New Zealand firms. New Zealand regulation rates highly on international comparisons, but business concerns persist and small adjustments can have significant effects on firms right across the economy.
- The World Bank has assessed New Zealand as the best place in the world to do business, and our competition policy and its enforcement are also highly ranked.
- Surveys of New Zealand businesses identify employment, occupational safety and health, environmental and ACC legislation, and tax as the areas of greatest concern. Recent adjustments in employment regulation have placed more restrictions on businesses, while changes to the Resource Management Act have been designed to ease the path for new investment.
- As globalisation gathers pace, there is increasing convergence across countries in improving the design of regulation. New Zealand must keep pace with this if its businesses are to retain their international competitiveness.
The Regulatory Environment - Areas for Focus
Maintaining the Quality of Business Regulation
- The Ministry is responsible for the design and oversight of a range of business regulation - including competition policy, regulation of financial markets, insolvency law and the protection of intellectual property.
- While these regulatory regimes are recognised as being of high quality, they need ongoing review to keep up with evolving international best practice and changing economic conditions. An important influence is the increasing globalisation of regulation.
- Institutional capability is a big issue for a small economy that must, nevertheless, support the full range of regulatory functions. Regulatory design should take account of available institutional capability, but we also need to look to opportunities to collaborate internationally in the implementation of regulation, particularly with Australia.
Monitoring the Administrative Burden of Regulation
- The administrative burden imposed by regulation is frequently raised by business as a problem. We need a more systematic and objective means to assess how this burden is changing over time, how proposed regulation will affect compliance costs and which aspects of which particular regulation impose the highest burden.
- The Ministry is investigating the use of the "Standard Cost Model" originally implemented in the Netherlands and being considered by a number of OECD countries, including Australia and the UK. This could help identify features of regulatory design and implementation that can be adjusted to benefit economic performance, while maintaining adequate protection of social and economic objectives.
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