Regulation Review Reaches First Milestone - Minister of Commerce Media Statement

Commerce Minister Lianne Dalziel today released a copy of the Quality Regulation Review's first milestone report and said good progress was being made to identify and address barriers to business growth.

The report showed government was taking the concerns of business seriously, she said.

"As a result of the feedback we have received so far I am confident we will make tangible improvements for business, particularly where different regulatory frameworks have overlapping application or more than one regulator has jurisdiction," Lianne Dalziel said.

Lianne Dalziel said the examples that had been put forward - such as co-ordinating health and safety and hazardous substance inspections, or aligning dates for paying excise duties on alcohol products and alcohol advisory council (ALAC) levies - might seem minor, but they were significant in the drive to minimise the impact of regulation on business.

Lianne Dalziel said Cabinet has directed government departments to report back to Ministers by the end of the year on workable solutions to:

• the removal of duplicated or overlapping regulatory requirements;
• the provision of tailored information on regulatory requirements to meet the needs of business;
• the design of "safe harbours", so that if certain conditions are met firms are deemed to comply with the law; and
• more rigorous risk analysis when developing and enforcing laws.

"Some of the specific issues we will look at now include survey requirements on tourism operators; information requirements under the Gambling Act; specific licence requirements for liquor licence holders, such as multiple licence and renewal requirements; and, the provision of information across a range of laws but particularly HSE, HSNO and ACC," Lianne Dalziel said.

Other issues are listed in an annex to the first milestone report.

The government continues to welcome submissions through its website www.businessconsultation.govt.nz on issues that concern business and wants to hear ideas for solving them, Lianne Dalziel said.

It is also addressing issues identified through interviews with business people in targeted sectors - retail, wine, hospitality, and horticulture.

Lianne Dalziel said the pleasing thing about the first milestone report was that the review had confirmed New Zealand's regulatory environment was in good shape and one of the best in the world.

"Nevertheless, there is always room for improvement, particularly in how people and businesses are made aware of the regulatory requirements and how regulation is enforced. We have had a clear message from business that one-size does not fit all, especially when the issue is one of assessing the interest that is being protected and the degree of risk that is posed," Lianne Dalziel said.

Lianne Dalziel said another part of the quality regulation review work involved strengthening the regulatory impact analysis system for government departments proposing new regulation and legislation. This would come into force from April next year.

A two-year pilot programme to test a business cost calculator to assess the impact of proposed regulatory changes would also be trialled from next year, she said.

QRR First Milestone Q&A

What Is the QRR?

The Quality Regulation Review is a Government-initiated review looking at how to make life easier for business. It includes active engagement with business to identify issues and solutions; investigating ways of eliminating duplication, inconsistencies and uncertainty where multiple regulatory frameworks intersect; and improving government's own processes for assessing and monitoring the impact of regulations. The review is based on the principles of efficiency, effectiveness, transparency, clarity and equity.

Why Is the Government Reviewing Regulatory Frameworks?

Regulation and regulatory frameworks play a critical role in shaping the business environment. The Labour-led government's economic transformation agenda seeks to remove constraints on economic growth and continuously improve the quality of regulations.

How Is This Review Different to Other Reviews?

It is taking a whole-of-government approach to examine overlaps in regulations, taking both a horizontal and vertical view of regulation across and within sectors.

What's Happened So Far?

Officials have carried out over 150 interviews across and within industry sectors; the Minister has heard from focus groups nationwide; and we have received submissions from individual businesses through the review website www.businessconsultation.govt.nz. This consultation has already identified a number of areas where work can be done. This is underway and results can be expected next year.

What Happens Next?

The review is working to a 14-month timeframe and is heavily focused on delivering workable solutions to business. Following this first milestone report officials have been asked to report back by the end of December with specific proposals for change and a further milestone report is due in late March 2007. The final report is due on 31 July 2007.

Do the Proposed Changes Make Much of a Difference?

There are many instances where small adjustments would make a big difference and it is often the little things that matter most. It's the cumulative effect of many regulatory frameworks and multiple layers of requirements that cause the problem.

Why Do We Need Regulation at All?

Regulation has an important role in any country for economic, social and environmental reasons. Business people accept that. New Zealand has a high-quality regulatory system, rating second only to Singapore in the World Bank's Ease of Doing Business Survey. Anyone establishing a business in Australia know knows that in New Zealand businesses face fewer compliance requirements and lower compliance costs.

What Is Government Doing about Its Own Processes?

We already have systems in place, but these should and can be improved. We want to be clear to those developing regulation that this government expects sound analysis, effective engagement with affected parties, and regulation only where there is a clear case for it. Regulatory Impact Analysis (RIA) is the internationally accepted mechanism for setting out these requirements and we are strengthening New Zealand's RIA system as part of the review.

Is It Still Possible for Business Get Involved in This Review?

The www.businessconsultation.govt.nz website will continue to be available for submissions from individuals, and existing business networks, e.g. Chambers of Commerce, Business New Zealand, NZCTU and industry associations will continue to act as valuable conduits for input to the review.

Who Is Involved in the Quality Regulation Taskforce?

The Taskforce is led by the Ministry of Economic Development, and includes officials from the Treasury, the Department of Prime Minister and Cabinet, the Department of Labour, the Accident Compensation Corporation, the Department of Internal Affairs, the Department of Building and Housing, the Ministry of Transport, the Ministry of Agriculture and Forestry, the Ministry for the Environment and Local Government New Zealand.

What Are You Doing to Address Compliance Issues?

We're looking at the need for ongoing monitoring of regulatory impacts that may be giving rise to increasing compliance costs. We have also accepted the idea of a standalone group comprising trade unions, business representatives, academics and government officials that will look specifically at implementation and compliance issues. The idea for such a group was a recommendation made by the Small Business Advisory Group in its first annual report in August 2004.

Why Look at the Issue from Both a Vertical and Horizontal Perspective?

Regulatory frameworks often intersect within industries and at the individual business level. We often look at how one regulation works across the economy (horizontal) but seldom at the cumulative impact of all regulation on one sector or industry (vertical); for example, how HSE, ACC, HSNO requirements stack up together and impact on business. By looking at both angles, we will develop a richer perspective of the impacts on business and a better understanding of how we can best resolve any concerns.

How Can We Ensure That Monitoring and Enforcement by Regulators Is Appropriately Targeted?

The diverse groups making up the regulated sector exhibit different behaviours and pose different risks to the delivery of agreed policy outcomes. The enforcement strategies chosen by regulators need to reflect these differences and be based on the actual level of risk posed by the regulated party. This has been highlighted in the review.

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