Comment
7. The key messages to the business community regarding the Review have been that "we are in this together" and that "no issue is too small" for consideration in the Review. To help ensure that the Review identifies the issues of greatest importance to business, the identification of issues and proposed solutions has been driven by business, rather than departments and officials. Wherever possible and sensible, solutions to issues have been implemented as they arise (i.e. "fast-tracking"), rather than waiting until the end of the Review. The government is also committed to ensuring that the key learnings from the Review for the design, implementation and administration of future regulation are captured and inform government mechanisms and processes. Annex One provides a brief summary of progress on projects being undertaken as part of the Review.
Achievements
8. As noted above, the government is not waiting until the end of the Review to implement solutions to the regulatory issues identified, but is implementing solutions as the issues arise wherever possible and sensible. The Taskforce has been promoting "fast-tracking" administrative and managerial responses for issues raised by submitters, where this can be effective. In the February 2007 Progress Report, it was noted that Cabinet has already agreed to a number of proposals that address some of the issues raised during the Review, and that a number of initiatives are being implemented by Ministers and their departments already. Annex Two summarises the achievements to date, including those that are expected to be delivered prior to July 2007, and the legislative amendments identified already for inclusion in the Omnibus Bill. The solutions vary in nature and scope, and include:
- direct responses to individual businesses – by the completion of the Review, all submitters will receive a response to the issues they raised. Where possible, this will be in the form of the proposed solution (e.g. clarifying regulatory requirements). However, it is important to note that it will not be possible for departments to resolve all of the issues raised by submitters. In a number of cases, the outcome desired by the submitter may not be consistent with the purpose of the relevant regulatory framework. Furthermore, the ability to resolve this issue may often be outside the influence of central government;
- changes to administrative processes and procedures – e.g. ACC and Inland Revenue have agreed to work together to investigate and implement where possible, ways to improve the coordination of data collection and share information on businesses;
- communication and information dissemination initiatives – e.g. the Department of Labour is developing guidance on how to manage the health and safety of contractors; and the changes to the www.biz.org website, which will be launched in August 2007;
- inclusion of issues in existing reviews and departmental work programmes – e.g. Inland Revenue is proposing that the issues of what constitutes an invoice for GST purposes and the requirement to pay PAYE twice-monthly for employers engaged in the horticulture sector be added to the government's Tax Policy Work Programme and considered under the Generic Tax Policy Process;
- the establishment of new work programmes – e.g. the Ministry of Health is undertaking a project to review the contractual and legislative requirements for audits of health and disability service providers; and Cabinet has agreed to a detailed work programme to be undertaken by the Department of Building and Housing (DBH), the Department of Internal Affairs (DIA), the Ministry for the Environment (MfE) and Local Government New Zealand (LGNZ) to resolve issues around the interface between building and resource consents processes [CBC Min (07) 3/8 refers];
- legislative enactments – e.g. following the passage of the Customs and Excise Amendment Bill in February 2007, the due dates for the excise levy and the Alcohol Advisory Council of New Zealand (ALAC) levies paid by the wine industry are now aligned to 1 July;
- proposals for further legislative amendments – the companion paper entitled, Quality Regulation Review – First Tranche of Legislative Amendments outlines the first set of proposals for minor legislative amendment arising from the Review. In addition, departments working in other areas where, subject to further analysis, legislative amendment may also be proposed as the appropriate solution (e.g. the Building/Resource Interface Study work programme agreed by CBC in February 2007 [CBC Min (07) 3/8 refers]); and
- changes to government mechanisms and processes for developing legislation and regulation – e.g. changes to the Regulatory Impact Analysis requirements, which came into effect on 1 April 2007.
9. In addition to the areas noted above, there are two further areas where it is useful to note progress in the context of the Review. First, the Review process has highlighted a number of issues that are already being addressed through legislation, information provision or process changes. While these initiatives have not been initiated by the Review, they nevertheless directly address issues raised during the Review.
10. Second, the Review has resulted in a number of insights and useful reminders for departments in terms of their perspectives and processes for developing, implementing and evaluating regulation, and in particular:
- a recognition and understanding of the importance of information provision by departments; and
- departments actively seeking to work together to identify solutions, and ensure they continue to improve the regulatory environment.
11. These types of insights and shifts in departmental thinking will be critical for ensuring constant vigilance in maintaining New Zealand's high standard of regulatory quality, and a commitment to continuous improvement.
Further Progress
12. A number of departments have made good progress in finding solutions to issues raised during the Review. Annex Three provides a summary of the responses provided by departments to the specific regulatory issues identified in the February 2007 Progress Report [CBC Min (07) 3/7 refers]. However, I consider that more can be achieved before the Review's completion in July 2007.
13. However, a key reason why the rate of progress on the Review to date has been slower than expected is that departments are working on their responses to the Review in addition to already heavy workloads on a number of other government priorities. Therefore, they have had to make choices about relative priorities. Where work arising from the Review represents new, unplanned, and unresourced work for departments, in many cases it simply has not been given high enough priority.
14. To make the type of progress we need to ensure New Zealand's regulatory environment is fit to achieve our economic goals and priorities over the next decade, Ministers need to consider the relative priority of the work for their departments under the Review against the other outputs expected from their departments, and provide clear direction to departments on what should be progressed as a matter of priority prior to July 2007.
15. The specific areas I consider should be progressed before the next stage of the Review are summarised below. I recommend that relevant departments undertake the further work and report to the Ministerial Group overseeing the Review on 28 May 2007 so I can include the solutions as part of the Quality Regulation Review - Final Report, by 31 July 2007.
Resource Management Act
16. A number of issues relating to the Resource Management Act (RMA) were raised by businesses during the sector study interviews. I recommend that the Minister for the Environment report on:
- the outcome of the recent enhancements to the provisions in the RMA for dealing with vexatious submissions; and
- the adequacy of the existing disciplines on local authorities in setting charges under the RMA and the Local Government Act 2002, including charges for resource consents, development charges and annual fees.
Labour Market Issues
17. The Department of Labour has been undertaking a range of work aimed at identifying and implementing improvements to the processes for managing and resolving employment relationship problems. To date this work has identified concerns with awareness about and the effectiveness of the current arrangements, particularly for managing performance issues or probationary periods, and concerns about costs as a driver of outcomes in disciplinary and dismissal procedures. Currently planned work due to be completed by the end of June 2007 is highlighted in Annex Two.
18. In parallel, the Department is undertaking a mediation practice review to ensure the Department's mediation services are best practice and will implement any recommended changes, in consultation with stakeholders, from August 2007. The Department is also reviewing other dispute resolution and workplace related institutions that deal with labour issues to identify any potential improvements to meet the objectives of Government and relevant legislation.
19. Following the work outlined in paragraph 18 a more substantive policy review (in June and July 2007) will consider options such as:
- implementing a Code of Employment Practice for disciplinary and dismissal procedures under section 100A of the Employment Relations Act;
- reviewing the impacts that costs have on problem resolution, including the costs of lawyers and other advocates (in particular the impact of "no-win / no-fee" contingency arrangements), and whether further information about costs would improve dispute resolution; and
- improved communications activities about how to effectively manage employment relationship problems.
20. The above options will improve the functioning of the current system by improving awareness of the available options and providing greater assistance to employers and employees to work within the current policy settings. I recommend that the Minister of Labour report to Cabinet by 31 July 2007 on options to improve the functioning of the employment relationship problems resolution system.
21. The online tool for assisting businesses with their entitlement calculations under the Holidays Act represents significant progress in addressing the issues raised by business. I propose that the Minister of Labour report to Cabinet by 30 June 2008 on the implementation and effectiveness of the online tool, including any recommended changes to the tool.
Hazardous Substances Management
22. The proposed changes to the Hazardous Substances and New Organisms Act 1996 (HSNO) and the work on the compliance and enforcement regime should help to address the compliance costs for business under HSNO. In addition, I recommend that the Ministers for Biosecurity and the Environment report back on:
- progress on the project looking at the interface between the Biosecurity Act 1993 and HSNO Act with respect to the importation of new organisms, recognising this project is awaiting a Court of Appeal decision on honey imports; and
- possible simplification of the licensing requirements under HSNO to remove any unnecessary costs to business associated with renewing licences, and to remove any duplication of licensing requirements.
Local Government and Regulation
23. A number of issues raised by submitters relate to local authorities' performance of their regulatory functions. There are suggestions of inconsistent interpretation, application and enforcement of the legislation they administer that affects business. These issues cross a number of areas, including the RMA, Building Act and food safety. The underlying concern is not inconsistencies caused by local differences, but different interpretations of statutory requirements and how council capability may impact decision-making. While many of the issues raised will be addressed by the work programme agreed as a result of the report on the Resource Management Act/Building Act Interface study findings [CBC Min (07) 3/8 refers] some issues fall outside the scope of that work. I therefore recommend that the Minister of Local Government (lead), Minister for Building and Construction, Minister of Housing, Minister for the Environment and the Minister for Food Safety report on:
- whether there are any issues relating to local authorities' performance of their functions that have been identified by stakeholders in the Review that will not be addressed by the current work programmes, and options to address those issues, if appropriate; and
- whether or not these issues are a consequence of local authority capacity and capability, and how these issues might best be addressed.
24. In addition, from a broader quality of regulation perspective, I recommend that the Minister for Local Government report on the adequacy of the existing disciplines on local authorities around developing, implementing and evaluating their own regulation.
25. To provide a local government perspective on how best to address the inconsistency issues raised in the Review, LGNZ has agreed to work with its member local authorities to identify where local authorities are having difficulty implementing legislation or regulations due to inconsistencies in the legislation, and where local authorities have needed to introduce regulatory measures to deal with gaps in central government legislation or regulation. LGNZ note that they, and individual local authorities, have raised many of these issues with central government departments in the past and, in some cases, there are current work programmes underway, which will help local authorities address inconsistency issues.
Liquor Licensing
26. While the Ministry of Justice's view is that the issues raised by submitters in relation to liquor licensing are significant policy issues, I believe a number of changes could be made that would make a material difference for business, but not change the risk profile of those businesses or weaken the overall controls on liquor licensing. Hence, I recommend that the Minister of Justice report on:
- options for simplifying the licence requirements for winemakers who do not sell wine for consumption on their premises;
- whether the mechanisms for approving and issuing special licences under the Sale of Liquor Act 1989 are achieving the intended objectives; and
- options for late licence renewal applications and for businesses to continue to trade while the renewal application is being considered.
27. In addition to the above reports for 28 May 2007, I also recommend that the Minister of Justice incorporate a review of the following issues into the Ministry of Justice's ongoing work on reviewing licensing laws:
- Consider removing the requirement for advertisements in the newspaper when reapplying for an on or off (premise) licence and replace this with better onsite information about what people should do if they have a complaint;
- Consider abolishing on and off (premise) re-licensing and general managers re-licensing; and
- Consider extending the length of the on and off (premise) licence following the probationary period from 3 to 5 years.
Interface between the Sale of Liquor, Holidays and Shop Trading Hours Acts
28. The experiences over the Easter period demonstrated again that there are inconsistencies between the Sale of Liquor Act, Holidays Act and Shop Trading Hours Act, in relation to the hours and days on which businesses may operate, and the days which should be treated as statutory holidays. Therefore, I recommend that the Ministers of Justice and Labour report on how these inconsistencies could be resolved.
Business Statistics
29. The Department of Statistics has a number of initiatives in place to minimise respondent load and reduce duplication. However, given the concerns of business I recommend that the Minister of Statistics report on:
- ways of improving communication with businesses regarding the use and value of the information they provide, as well communicating the value of statistical information to businesses and sectors more broadly; and
- the extent to which the current suite of initiatives being undertaken by the Department of Statistics will deliver real reductions in respondent load at the firm level.
ACC and IRD Information Sharing
30. To address concerns about information sharing and coordination within government, I recommended that the Minister of ACC and Minister of Revenue report on opportunities for speeding up work to investigate, and implement where possible, initiatives to improve the coordination of data collection and data dissemination, and the sharing information on businesses (with their permission), and extend these initiatives to also include the Department of Statistics and the Companies Office.
Exports and Imports
31. To address business concerns with procedures related to exporting and importing, I recommend that:
- the Ministers for Biosecurity and Food Safety report on the progress of phasing in the updated standards for plant exports, taking into account the potential structural separation of the New Zealand Food Safety Authority from the Ministry of Agriculture and Forestry (MAF); and
- the Minister for Biosecurity to report on projects to redesign the way biosecurity import standards are set, taking into account the structural integration of Biosecurity New Zealand and MAF Quarantine Service by 1 July 2007, including reporting on the priority of addressing the lack of level 3 quarantine facilities in New Zealand for importing plant material.
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