2007 in Review
2007 has been a particularly busy and challenging year for the RIAU. Here are a few highlights of what we have been doing over the last year and also a few lessons from our experience:
Implementing the enhanced Regulatory Impact Analysis regime
The enhanced RIA regime was introduced in April 2007 after a long period of preparation. The enhanced regime is designed to enable more rigorous assessment of proposals which are likely to have a significant impact on economic growth. It puts a greater emphasis on the actual analysis throughout the policy process for regulatory proposals (including the discussion document stage), rather than simple disclosure. Compared to the previous regime, the RIAU is better placed to add value earlier in the process and do so more comprehensively.
Also, we have put in place a self-regulatory regime for those proposals which are not economically significant. This means that departments take on more responsibility for the quality of policy work, while the RIAU has more resources for those economically significant proposals.
We have over the past year formally reviewed a number of significant proposals. Our experience working with departments under the new regime has generally been positive. There has been a notable improvement in the quality of analysis and compliance with enhanced RIA requirements including analysis at the discussion document stage. Nevertheless there remain some recurring issues which have been brought to our attention. In general, we feel that more effort is needed to make sure that the problem definition is accurate and addresses the fundamental issues. Moreover, there needs to be more analysis and particularly quantification of benefits and costs. In some proposals we received, formal cost-benefit analysis is appropriate and can add value to the process, but for various reasons has not actually been undertaken.
The RIAU has produced a number of guidance documents to assist analysts and managers in policy formulation and regulatory impact analysis, and have been developed with the broader aims of regulatory reform in mind. These include guidance on regulatory compliance and assessing policy options. These guides are available on the Ministry of Economic Development website.
Completing the QRR
Another major project that we have completed in the last year is the Quality Regulation Review (QRR). This Review was announced by the Government in May 2006. The final reports for the QRR were released in September 2007, following two earlier reports in October 2006 and April 2007.
The final report concluded that the current regulatory environment for business is in fairly good shape, but that there is scope to improve the way rules are communicated to business, implemented and enforced. The Review has made good progress in addressing a number of specific issues raised by business. For example, ACC and Inland Revenue have agreed to improve coordination of data collection and share information on business.
Improving New Zealand's regulatory environment is a continuous process. There is still much to be done after the review. The Government's post review approach to ensure the quality of New Zealand's regulatory environment focuses on four objectives:
- Ensuring the quality of new regulation
- Improving the quality of existing regulation
- Developing a culture of good regulatory practice; and
- Building the capability of regulators and business.
There are a number of initiatives flowing on from the Review. The MED, for instance, is looking at an ongoing programme of sector studies to ensure continuous improvement of the regulatory environment and a two year trial of a Business Cost Calculator to quantify the compliance costs of regulation.
We are also making good progress, with the collaboration of other departments, on the proposed Regulatory Improvement Bill. The Bill contains changes to legislation identified by departments during the Quality Regulation Review with the objective of reducing compliance costs on business and improving the regulatory environment.
Other matters
We have also undertaken a number of projects which aim to contribute to quality of policy work. One of them is updating the occupational regulation framework, which was first published in 1999. We are due to report to the Minister of Commerce soon on possible ways to progress this matter.
Another is the Stock of Regulation project. We are at an early stage of research into determining the impacts of the stock of regulation as a whole, considering the ways of measuring its impacts, and the identification of a range of measures available to manage its impact on businesses and improve the overall quality of the regulatory environment in New Zealand.
Author: JC Somers
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