Regulatory Impact Statement (RIS) Requirement
43. What is a RIS? The RIS is a summary of the key information decision-makers need to know in order to make an informed decision as to which option is best. It sets out a high-level summary of the problem, objectives, options, impacts of those options, reasons why the preferred option is best, implementation and review plans, and the consultation undertaken. The RIS should come across to the reader as a list of the feasible options (including the status quo) and an explanation of how the preferred option was arrived at and why the other options are not preferred, by explaining the conclusions reached in the analysis, the assumptions made, and any weightings applied to different impacts. The RIS is not an advocacy document: it should explain how the preferred option was arrived at, not sell the preferred option.
44. What is the purpose of the RIS? The RIS is primarily a tool to assist decision-makers. By setting out the reasoning that has led to identifying the preferred option, decision-makers can use the RIS to assess whether they are convinced that the preferred option is best (an analysis role). The RIS is also an important document for those who want to understand how the government has reached its conclusion as to whether to regulate and which option is best (a disclosure role).
45. At what stage is a RIS required? A RIS is required at the time "in principle" or final decisions are sought from Cabinet. In some other cases it may be useful to provide a work-in-progress RIS.
46. How do departments/the RIAU determine whether the RIS is adequate? The RIS will be adequate if it includes the information required and it reflects adequate analysis.
47. What information needs to be included in the RIS?
| Section title |
Required information |
| Executive summary |
- One paragraph of no more than 150 words summarising the problem, the preferred option, and the main impacts
|
| Adequacy statement |
- Who has reviewed the RIS (RIAU or name of department that has reviewed RIS) and whether the RIS is adequate according to the adequacy criteria
|
| Status quo and Problem |
- Brief, high-level summary of key features of the current situation - not just features of the current regulation
- Summary of why government action is needed, including why the current arrangements are insufficient to address the problem. This should contain an appropriate level of detail on the status quo's costs and benefits (including compliance costs, risks and opportunities). The root cause of the problem should be identified, not just the symptoms
|
| Objectives |
- The objectives that options are measured against. These should not pre-justify the preferred option
|
| Alternative options |
For each option that is neither the status quo nor the preferred option:
- Brief, high-level summary of key features of the option
- Why it is not the preferred option, including an appropriate level of detail on the benefits and costs (including compliance costs, risks and opportunities)
|
| Preferred option |
- Brief, high-level summary of key features of the preferred option
- Why it is preferred and a statement of all of the proposal's impacts, including an appropriate level of detail on the benefits and costs (including compliance costs)
- A risk assessment with a description of how risks will be/are being mitigated
- Steps that have been taken to minimise compliance costs, if any
- A paragraph that briefly describes how the preferred option would impact on the stock of regulation (existing regulation), including whether the proposal overlaps and interacts with existing rules, whether the proposal makes any existing rules redundant, and whether these rules are being removed or altered as part of the proposal
|
Implementation and review
(note: this section does not need to be completed for tax policy proposals) |
- How the proposal will be given effect, including timetables where available
- Plans for notifying affected parties of what they need to do to comply with any new requirements, if any
- The enforcement strategy that is to be implemented to ensure that the preferred option achieves the public policy objective, if any
- Plans for monitoring and evaluating the preferred option, including key dates if any
|
| Consultation |
- Who was consulted
- What the form of consultation was
- Key feedback from stakeholders and government departments on each of the options considered, with particular emphasis on any significant concerns that were raised about the preferred option, how the department authoring the RIS altered the proposal to address these concerns, and if they did not alter the proposal, why not
- If there was no consultation, the reasons why
|
48. How much detail needs to be contained in the RIS? The RIS should provide a summary of the required information and should focus on the analysis of the options, particularly why the preferred option is best. It is very important that the RIS focuses on the important points. Background and elaboration should be kept to a minimum. The key features of options should be made clear, including how options would work as a whole, but the details of the options should be omitted unless they have a significant bearing on the impacts of the option. At the same time, the reader needs to be able to understand all of the points made, which means that careful drafting is required, including using clear and accessible language. The RIS needs to be clear and assumptions need to be set out clearly.
49. How long should the RIS be? Departments should attempt to keep RISs within four pages. Where this is not practical, four pages may be exceeded.
50. How can I minimise duplication between the RIS and the Cabinet paper? To minimise duplication between the RIS and the Cabinet paper, focus the RIS on the analysis and providing a high-level summary of the important points. The Cabinet paper is more likely to focus on just the preferred option.
51. Does each option need to have the same level of detail for the description of the analysis (e.g. can alternative options have less detail)? The level of detail should be enough to clearly explain to the reader why the preferred option is preferred over the other options. The reader needs to be confident that the preferred option is in fact the best option.
RISs for Supplementary Order Papers
52. As mentioned above (see paragraph 17), the RIA requirements apply, but in a limited fashion, to Supplementary Order Papers (SOPs) that deal with substantive policy issues or are outside the original scope of the Bill. Departments are required to highlight the key changes arising from the SOP in the RIS relating to Cabinet's decision on the original policy. Given timing constraints, there is no requirement to prepare a new RIS. Changes to the RIS should focus on the key features of the proposal contained in the SOP and the resulting costs and benefits. The RIS should not address changes made to the Bill by a Select Committee but should indicate that these changes are discussed in the Committee's commentary. Where a RIS was not prepared for the original policy decision, and the SOP makes substantive changes to the Bill, a RIS should be prepared and attached to the Cabinet submission seeking agreement to the SOP.
53. For SOPs that do not deal with substantive policy issues (e.g. those "breaking up" a Bill), the minor or machinery exemption (see paragraph 15) is likely to apply.
RISs for International Treaties and Agreements
As set out in paragraph 13 above, the RIA requirements apply to all policy proposals submitted to Cabinet that result in government bills or statutory regulations, unless an exemption applies. One of the circumstances in which an exemption from the RIA requirements can be claimed is where the proposal is necessary to implement an international treaty for which an extended National Interest Analysis (NIA) has been prepared and submitted to Cabinet (this means that each time a RIS is required, an extended NIA could be prepared in substitute for the RIS).
To understand the RIA requirements as they apply to the process for becoming bound to an international treaty, you should note the following general Cabinet and Parliamentary steps, which may differ in respect of individual treaties:
- Cabinet agreement is sought for New Zealand to enter into negotiations (unless New Zealand has a prior mandate to enter into negotiations).
- Once negotiations are complete, Cabinet agreement is sought for New Zealand to sign the final text of the treaty (this can vary depending on the terms of the treaty that set out the process for how States become bound). An NIA will be attached to the Cabinet paper. This may necessarily be a draft or partial NIA.
- If the treaty is a multilateral treaty or a "major bilateral treaty of particular significance", the lead government department prepares a National Interest Analysis (NIA) and a parliamentary select committee considers both the NIA and the text of the treaty and reports back to the House. Where it appears that changes to legislation or regulations are likely to be necessary to implement the treaty domestically, the NIA should be an extended NIA, which includes the RIS elements. If becoming party to the treaty is likely to have a significant impact on New Zealand's economic growth, the NIA should be referred to the RIAU who will review the aspects of the NIA that cover the RIS elements.
- Cabinet agreement is sought to become party to the treaty (this step binds New Zealand to the treaty). The NIA is attached to the Cabinet paper (in some cases, this step will be combined with step 2 as Cabinet approval to sign and ratify a treaty may be sought simultaneously)
- Cabinet agreement will need to be sought for domestic legislative changes to implement the treaty.
For the steps involved in becoming party to a specific treaty, please contact the Treaty Officer in the Legal Division of the Ministry of Foreign Affairs and Trade.
The RIS Requirements Potentially Apply in Stages 1, 2, 4 and 5
1 - Where it appears that changes to legislation or regulations are likely to be necessary to implement a treaty, a RIS or extended NIA is required but would necessarily be a partial RIS/extended NIA. It would detail in preliminary form issues such as the objectives of the proposed treaty, how it is likely to be implemented in New Zealand, and the likely impacts (if identifiable). Some of the sections of the RIS/extended NIA would necessarily remain brief or blank.
2 - Where it appears that changes to legislation or regulations are likely to be necessary to implement a treaty, a RIS or extended NIA is required but would necessarily be a partial RIS/extended NIA, though it would be more detailed than the RIS that was prepared prior to negotiations (if one was prepared).
4 - If an extended NIA is attached to the Cabinet paper, a RIS is not required. Otherwise a RIS is required.
5 - A RIS is required unless the proposals were already fully covered by the extended NIA.
Draft RIS Circulated for Departmental Consultation
54. RISs are required to be circulated with Cabinet papers for departmental consultation. Normally the RIS will not be finalised at this point. Departments should actively encourage other departments to comment on the RIS as well as the Cabinet paper so that the RIS can evolve through the departmental process. Departments should see the final RIS in the same way as they see the final Cabinet paper.
Publication of RISs
55. All RISs are required to be:
- attached to or referenced in (for example, provide a link to the Internet page where the RIS has been posted) the press statement announcing any new policy;
- lodged on the responsible department's website, and the dedicated Ministry of Economic Development (MED) website);3 and
- included in the explanatory note to bills that are introduced into the House.
56. There may be instances where it is undesirable to publish the RIS or sections of the RIS. The provisions of the Official Information Act 1982 should guide decisions about whether a RIS, or part of a RIS, should be published.
57. Further detail on the publications requirements is contained in Appendix 3.
When Should the RIAU Be Involved?
58. For proposals that are likely to have a "significant impact on economic growth" (see the tests set out in paragraph 24), departments are required to submit a draft RIS to the RIAU for review for adequacy. Departments need to give the RIAU 10 working days (if possible) to review the RIS. For a timeline, see paragraph 27.
Back to Top