Government's Compliance Cost Strategy
The government announced its compliance cost work programme in October 2000, with the adoption of a four-pronged strategy:
- To publish a new business compliance cost statement as part of all new legislation. This will clearly state the costs government is imposing on businesses, giving business better opportunity to have a say on those costs as part of the select committee process;
- To follow up on the 1998 Recommendations of the Commerce Select Committee Inquiry into Compliance Costs by November 2000;
- To establish industry test panels, where necessary, to audit the likely compliance costs and workability of any proposed new regulations;
- To seek the advice of business on ways to reduce compliance costs through the establishment of a Ministerial Panel on Business Compliance Costs.
Quality of Regulation
This government is committed to fair and cost-effective regulation. The following principles underpin the objective of reducing compliance costs:
- Compliance cost assessment should be an integral part of the policy development process;
- The reduction of compliance costs is a dynamic process. It includes ongoing monitoring of existing legislation, regulations, and rules, as well as assessing the impact of any substantive changes;
- Recognition that compliance costs are a charge against the scarce resources of the private sector;
- Compliance requirements need to be assessed critically to ensure they are absolutely necessary to achieve policy objectives;
- Compliance cost assessment is recognised as a clear departmental responsibility and, as such, should be an integral part of departmental management accountability.
A number of changes have been made to improve the quality of regulation. The government is holding itself to account through the RIS and BCCS process. From 1 April 2001, all policy proposals submitted to Cabinet, which have compliance cost implications for business, should include a BCCS in the RIS. The RIS and BCCS are published and included in the Explanatory Note to Bills introduced into the House.
A unit within the Ministry of Economic Development (MED) has been established to review the regulatory impact and business compliance cost statements. The Business Compliance Cost Unit (BCCU) monitors all statements prepared and comments where they raise issues of good practice or appear not to meet the standards set. Most importantly it has an education role to ensure these statements are better prepared and to teach departments about the importance of compliance cost minimisation.
Follow up from Select Committee
In November 2000, departments reported back on the 1998 Select Committee recommendations related to their departments and legislation.
Test Panels
The government has been using test panels as and when necessary in developing legislation. Early indications are that they are a useful tool. MED is drawing up guidelines for departments on how best to structure and use test panels to their best effect.
Business Compliance Cost Panel
The government, in keeping with its partnership approach, has sought the advice of business on reducing compliance costs. The Ministers of Finance and Commerce appointed 11 business people to advise the government. The Panel was appointed in December 2000.
The Panel was asked to:
- Identify the areas where unnecessary and excessive compliance costs occurred;
- Prioritise areas for action; and
- Provide workable and practical solutions.
The Panel was not asked to critique, analyse or balance the views of business.
The Panel gathered the views of business through:
- 11 regional meetings;
- The release of a discussion document and questionnaire;
- Analysing 86 questionnaire responses and 98 submissions;
- Sector group and government agency meetings;
- A review of New Zealand compliance cost initiatives past and present; and
- A review of international initiatives.
The Panel presented its report in July 2001. It made 162 recommendations.
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