Comment
A. Requirement to Prepare Draft RIS for Consultation
9. To implement the requirement to prepare a draft RIS for consultation, I propose to require that departments include questions and/or discussion of each of the substantive RIS sections (or a draft RIS) in all discussion documents for proposals that require a RIS, not just those that go through Cabinet. This will ensure that thinking about the problem, options, and impacts of those options occurs early in the policy development process. The discussion document (or draft RIS) would not need to include a full assessment of the predicted impacts of options, but rather would provide a summary discussion at a level that is reasonable given the stage of the policy development process and/or questions on what the department already knows about the problem, objectives, range of options to solve the problem, predicted impacts of the options, and implementation and review options. This would assist departments in gathering information on each of these aspects. Where a draft RIS is not used, the discussion document would need to state that the substantive RIS sections have been covered off.
10. The RIAU would comment on discussion documents that are expected to result in proposals that are likely to have a significant impact on economic growth to advise on whether the design of the discussion document is likely to result in an adequate final RIS. I also propose that departments be required to include the final RIS when circulating Cabinet papers for departmental consultation.
B. Focusing the RIAU on Those Proposals with Significant Potential Impact on Economic Growth
11. To implement the change to focus the RIAU on proposals with significant potential impact on economic growth, I propose the following tests.
- To be considered for review by the RIAU, proposals must affect:
- the ability or incentives of businesses to innovate, invest or operate; or
- competition in markets, the ability to enter markets, or the structure or make-up of any markets; or
- the degree of international connection between New Zealand and overseas markets, particularly the single economic market between New Zealand and Australia; or
- the cost or availability of infrastructure or related services; or
- the availability of, or access to, finance for business growth.
- In terms of significance, all proposals with large impacts on any of the above factors will be reviewed by the RIAU. "Impact" includes both benefits and burdens, and can be measured by qualitative or quantitative data, including the monetary impact on the economy or the number of businesses affected. The RIAU will only review proposals with lesser impacts on the above factors if they are:
- novel or contentious, or in a novel or contentious area; or
- likely to have a disproportionate impact on a sector, region or part of the economy;1 or
- likely to create inconsistency between New Zealand's domestic law and the Trans-Tasman Mutual Recognition Arrangement; or
- likely to restrict economic activity (for example, proposals that ban or require licensing for a business or economic activity).
12. The RIAU will produce guidance material that explains the tests further, including guidance on the definition of "large" and how the tests will be applied.
13. The RIAU will continue to review all consultation-stage Council of Australian Government RISs with trans-Tasman implications (regardless of their significance) as per the protocol between the Australian Office of Regulation Review and RIAU.
C. Requirements for Proposals That Are Not Reviewed by the RIAU
14. The RIAU will not review proposals that are not likely to have a significant impact on economic growth. Departments will need to take responsibility for their own regulatory impact analysis and ensure they meet the adequacy criteria (including the enhancements agreed to by Cabinet on 17 May 2006). Some departments will incur costs as a result of strengthening their internal processes.
D. Reducing Duplication between the RIS and Cabinet Paper
15. DPMC, in consultation with other central agencies, is planning to undertake some work on improving the quality of the presentation of Cabinet papers and policy advice. Potential changes to the Cabinet paper format may be considered as part of this work. In the meantime, to minimise duplication between the RIS and the Cabinet paper, I propose to clarify in the requirements for RISs that the RIS should focus on providing a summary of the required information and should focus on the analysis of the options, including why the preferred option is best, with less background and elaboration. The Cabinet paper should take account of the regulatory impact analysis that has been undertaken.
16. To properly embed the focus on analysis of options into the RIS and reduce the length of the RIS headings, I propose to amend the RIS format. I propose that the Business Compliance Cost Statement (BCCS) be incorporated into the RIS, which continues the focus on minimising business compliance costs. The proposed format is set out in the appendix.
E. Regulatory Impact and Business Compliance Cost Statement Section of Cabinet Paper
17. I propose to amend the "Regulatory Impact and Business Compliance Cost Statement" section of the Cabinet paper by renaming it "Regulatory Impact Analysis" and requiring that it state:
- whether the department confirms that the principles of the Code of Good Regulatory Practice and the regulatory impact analysis requirements, including the consultation RIS requirements, have been complied with;
- whether a RIS has been prepared, whether the RIAU considers the RIS to be adequate (or, if the RIS is not reviewed by the RIAU, whether the department considers it to be adequate), and if a RIS has not been prepared, why not; and
- whether the final RIS was circulated with the Cabinet paper for departmental consultation.
F. Clarification of Ambiguities and Updating the Rules around When a RIS Is Required
18. I propose to clarify that in the statement of when a RIS is required, "statutory regulations" has the same definition as "regulations" under section 2 of the Regulations (Disallowance) Act 1989 and that changes to "regulations" that go to Cabinet for noting require a RIS.
19. The international treaty exemption is outdated given the work of MED and the Ministry of Foreign Affairs and Trade (MFAT) on a proposal to incorporate the core RIS information into the National Interest Analysis (NIA). MED will work with MFAT to clarify the international treaty exemption and will report back in the second report for the Quality Regulation Review on 31 March 2007.
20. The budget night legislation exemption is not achieving its objectives. To address these issues, I propose to change the budget night exemption's wording as follows (changes italicised).
| Current |
Proposed |
where it is to give effect, in terms announced in the Budget, to a specific Budget decision, where the decision is to:
- repeal, impose, or adjust a tax, fee or charge; or
- confer, revoke, or alter an entitlement; or
- impose, revoke, or alter an obligation
|
where it is to give effect under Urgency, in terms first announced in the Budget, to a specific Budget decision, where the decision is to:
- repeal, impose, or adjust a tax, fee or charge; or
- confer, revoke, or alter an entitlement; or
- impose, revoke, or alter an obligation
|
G. Application of New Requirements to Tax Policy Proposals
21. I propose that tax policy proposals be exempted from the requirement to complete the implementation and review section of the RIS, because of the generic tax policy process. This involves consultation on implementation of legislative changes. It also provides scope for the identification of remedial issues and review of legislation when this is leading to unanticipated concerns.
H. Publication Requirements
22. Currently all RISs to which a BCCS is attached are required to be published on the responsible department's website and a dedicated MED website, included in the explanatory note for bills that are introduced into the house, and attached to the press statement announcing the new policy. To increase transparency, I recommend that all RISs be published, rather than just those to which a BCCS is attached, which is the current requirement. There may be instances where it is undesirable to publish RISs or parts of RISs. The criteria set out in the Official Information Act 1982 will guide decisions as to whether RISs or parts of RISs should be withheld.
I. Transitional and Implementation Arrangements
23. It is proposed that all of the proposals in this paper will come into effect on 1 April 2007. The RIAU will prepare and disseminate guidance prior to 1 April 2007. This guidance will include further definition of the tests that determine which RISs the RIAU reviews and will cover the need to consider impacts on health, environmental, economic, social, and cultural costs and benefits. As part of this, a Cabinet Office Circular will be issued.
24. A regulatory impact analysis reference group of senior officials led by the Deputy Secretary responsible for the RIAU will be formed and will meet periodically to discuss the implementation of the RIS regime. The group will include officials who represent the economic, environmental, cultural, health, and social sectors.
Back to Top