Minister's Announcement: Quality Regulation Review - Final Report

The government is tightening up its own processes to minimise the potential impacts on business of new rules, and will fast-track legislation to fix anomalies found in a raft of existing regulations, Commerce Minister Lianne Dalziel says.

Lianne Dalziel today announced the final report of a 15-month review to address regulatory barriers to business growth.

"We have already been able to fix many issues that businesses told us about, with more in the pipeline. But, more importantly, there's been a sea change in the way we go about developing new rules. We're learning to look at this from the business perspective.

"When businesses deal with government, they don't see IRD, ACC, or OSH; they see 'the government' – and they quite rightly ask why they have to give 'the government' the same information again and again.

"By talking directly to business we were able to get very specific feedback about how regulation looks from their viewpoint and have been able to build their needs into the strengthened Regulatory Impact Analysis regime. This will ensure that future regulation will identify the problem and look at all potential options for resolving it."

"Along with the improved RIA, the long list of fixes already undertaken, and those to be dealt with in an omnibus Regulatory Improvement Bill approved by Cabinet, the business consultation website used in the review is being retained so business will continue to have direct access for giving feedback on rules that affect them, and we're soon to start a two-year trial of a Business Cost Calculator so we can quantify the compliance costs of regulation."

Lianne Dalziel said the review confirms that New Zealand's regulatory environment is in good shape – which fits with the World Bank's assessment of New Zealand as second in the world for ease of doing business – but there is room to improve the way rules are communicated to business, implemented and enforced.

"Getting regulation right is a matter of continuous improvement. Quality regulation has to be able to keep up with a changing world – with economic, social and technological changes. That takes more than a one-off review. It takes a change in the way we think about regulation and the way we work with business, and that's what we've achieved."

Quality Regulation Review - Questions and Answers

Background documents, including a sector studies report, cabinet papers, and a full list of the changes to regulations implemented since the start of the review are available on the Ministry of Economic Development website.

What is the Quality Regulation Review?

Work on the QRR commenced in May 2006 following the Prime Minister's statement to Parliament in February announcing that the government would address regulatory barriers to business growth. Carried out over 15 months, the review investigated ways of eliminating duplication, inconsistencies and uncertainty where multiple regulatory frameworks intersect; and looked at improving government's own processes for assessing and monitoring the impact of regulations.

What made this review different from others?

The review took a business-centred whole-of-government approach to examine overlaps in regulations, looking at the impact of regulation across the economy and within four key sectors - hospitality, retail, horticulture and the wine industry.

Business has been closely involved in the review process. Business networks, e.g. Chambers of Commerce, Business NZ, New Zealand Council of Trade Unions and industry associations have acted as a conduit for business input to the review. 130 individual businesses in the four sectors were interviewed about what they see as priorities and issues. The Minister heard from focus groups nationwide and we have received submissions from individual businesses through the Business Consultation website.

How has the QRR addressed the way regulatory frameworks intersect within industries and at the individual business level?

We often look at how one regulation works across the economy but seldom at the cumulative impact of all regulation on one sector or industry – for example:

• The Department of Building and Housing, Department of Internal Affairs, the Ministry for the Environment and Local Government New Zealand are collaborating to help sort out issues where the Resource Management Act and the Building Act coincide.
• The Department of Labour (DoL), the Environmental Risk Management Authority (ERMA) and the Accident Compensation Commission (ACC) are working together on the interaction of Health and Safety in Employment (HSE), Hazardous Substances and New Organisms (HSNO), and ACC legislation.
• The Department of Labour and Minister of Justice will soon be releasing a paper on the relationship between the Shop Trading Hours repeal Act, the Sale of Liquor Act and the Holidays Act on Easter weekend and how that might be addressed.

Looking at both angles has developed a richer perspective of the impacts on business and a better understanding of how we can best resolve any concerns. Many of the ongoing work programmes that have been established as a result of the review are addressing these interface issues.

What has the QRR achieved?

Government has better information on what's important for business. We've been able to streamline some activities that affect business - for example:

• An omnibus Regulatory Improvement Bill fast-tracking a number of legislative changes will be included in the government's legislative programme;
• ACC and Inland Revenue have agreed to improve the coordination of data collection and share information on businesses;
• the adjustment date for excise and the Alcohol Advisory Council of New Zealand (ALAC) levy paid by the wine industry are now aligned;
• ERMA and DoL have developed information and tools to assist HSNO compliance in the farming and horticulture industries;
• options are being investigated for delivering co-ordinated health and safety advice and information through business mentoring and coaching programmes; and
• the Ministry of Health is working with the health sector to reduce contractual and legislative requirements placed on suppliers of health-related services (including duplicated audit requirements)

Other initiatives are pending, such as a review of the interface between the HSNO and Biosecurity Acts.

How has the QRR strengthened government's regulation-making processes?

The QRR helped strengthen the government's internal processes such as the Regulatory Impact Analysis (RIA). Since April 1, 2007, all proposed regulatory interventions have been getting more rigorous scrutiny before they end up on ministers' desks for decisions. RIA is the internationally accepted mechanism for ensuring proposed regulations are justified, cost-effective and do what they're supposed to. In order to test analysis early in the process, each government agency is required to include in discussion documents a Regulatory Impact Statement, (RIS), or at least pose the questions that would enable a RIS to be developed. This strengthens the incentives on government agencies to consider the impacts of regulations before they are considered by the government. Businesses are encouraged to participate in this stage of the policy development.

MED has prepared guidance material for government policy analysts on how regulatory flexibility can be considered and adopted at the regulatory design stage; and, in consultation with other government agencies, has developed guidelines on regulatory compliance for use by policy analysts, Cabinet Ministers and regulators.

What happens next?

The government's post-review approach to ensuring 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 of business.

The Ministry of Economic Development is to implement 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. The government will examine the feasibility of introducing Standard Business Reporting (as used in the Netherlands and Australia) whereby businesses can submit financial data to several government agencies in just one transaction, cutting the time and effort spent preparing and filing reports to government.

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