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Recommendations


Cabinet Paper: Enhanced Regulatory Impact Statement Requirements

Hon Lianne Dalziel, Minister of Commerce
[ Last Updated 26 January 2007 ]


32. It is recommended that the Committee

  1. 1. Note that Cabinet agreed to changes to strengthen the regulatory impact analysis requirements on 17 May 2006 (POL Min (06) 9/13 refers).
  2. 2. Agree to require that:
    • departments include questions and/or discussion of each of the substantive RIS sections (or a draft RIS) at a level that is reasonable given the stage of the policy development process in all discussion documents for proposals that require a RIS;
    • where a draft RIS is not used, the discussion document should state that the substantive RIS sections have been covered off;
    • the RIAU 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; and
    • departments include the final RIS when circulating Cabinet papers for departmental consultation.
  3. 3. Agree that the following tests be used to determine which proposals will be reviewed by the RIAU.

    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; 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).
  4. 4. Agree that the RIS preparation requirements be changed so that a RIS should only contain a summary of the required information, should focus on analysis of the options, and should be of the format set out in the appendix.
  5. 5. Agree to amend the "Regulatory Impact and Business Compliance Cost Statement" section of the Cabinet paper by renaming the section "Regulatory Impact Analysis" and requiring that the section 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.
  6. 6. Agree that, for the purposes of determining 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.
  7. 7. Note that the Ministry of Economic Development will work with the Ministry of Foreign Affairs and Trade to clarify the international treaty exemption and will report back in the second report for the Quality Regulation Review on 31 March 2007.
  8. 8. Agree that the budget night legislation exemption to the RIS requirements be amended to read that a RIS is not required "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".
  9. 9. Agree that tax policy proposals be exempted from the requirement to complete the implementation and review section of the RIS.
  10. 10. Agree to extend the RIS publication requirements to apply to all RISs.
  11. 11. Agree that all of the above proposals will take effect on 1 April 2007.
  12. 12. Note that, as is the current requirement, the RIAU will ensure that the RISs it reviews incorporate health, environmental, economic, social, and cultural costs and benefits.
  13. 13. Agree that a Cabinet Office Circular be issued that updates the RIS requirements.
  14. 14. Agree that this paper be published on the MED website.

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