Aiming to increase transparency and improve the quality of legislation, this bill it is one of the most controversial pieces of law to be introduced by this Government.
Many view it as a successor to the defeated Principles of the Treaty of Waitiangi Bill. The Regulatory Standards Bill is being championed by Act Party leader David Seymour who is also currently Deputy Prime Minister and Minister for Regulation.
It is open for public submissions until 1pm, Monday 23 June.
As usual, I’ll be discussing what the bill is about, who supports it, who’s against it, and what I think about it.
The bill is tied to the Ministry for Regulation (MFR), established by the Coalition Government in 2024 to assess the quality of existing and new legislation.
The three main things this bill would do is establish a “benchmark” set of six principles for new laws, require reports on whether laws are consistent with those principles, and create a Regulatory Standards Board to consider whether laws are consistent with these principles.
The bill desribes the board as independent. The board reports to the Minister for Regulation (or equivalent), the same minister appoints most of its members, and it gets it resources from the MFR.
The six principles are: rule of law; liberties; taking of property taxes, fees and levies; role of courts; and good law-making.
The rule of law, as described by this bill, addresses some tenets of democratic society, such as that laws should be clear and accessible, the should apply equally to every person, judges should be independent, and legal rights should be sorted out through applying laws rather than through discretion.
The liberties principle says that laws should not unduly diminish someone’s personal freedoms or property rights, unless this is necessary for someone else’s freedoms and rights.
The taking of property principle says laws should not allow anyone to take or impair property without a good reason. And if property is taken, the owner should get fair compensation. The bill does not define what “property” or “impair” mean.
The taxes, fees and levies principle says laws should only impose fees for goods or services to cover the cost of providing those goods and services.
It applies a similar standard to levies (fees that are paid by members of a group to distribute risks or benefits), saying the amount charged for a levy should be related to the benefits of the group and costs of providing the benefit.
The role of courts principle re-states the existing system in which it is up to the courts to interpret laws. It also says that government officials should only get power over rights, liberties and obligations if their power is well-defined and subject to appropriate review.
And finally, the good law-making principle covers the most ground, addressing the costs and benefits of laws.
This principle says people should be consulted when laws will affect them.
It says laws should be evaluated against certain criteria, including whether they are in the public interest, whether existing laws and other options already address the issue at hand, and who will benefit or suffer as a result of the law.
It also says laws should be proportionate to the issue they address, they should be efficient, and the benefits should outweigh the costs.
The bill proposes that when introducing laws, ministers or other lawmakers responsible for them must include a statement about whether they are consistent with the principles above. And if not, they must include an explanation of why not.
These requirements would not apply to certain legislation, including: bills authorising government spending; bills that repeal no-longer-needed laws; Treaty of Waitangi settlement bills; quick amendments to existing laws that don’t have time for the regulatory standards process; small pieces of legislation that are made by the Speaker of the House, or the courts, small pieces of legislation regarding the military; and laws the Minister for Regulation says are fine.
The bill explicitly states that it does not come with rights or obligations that are enforceable in a court of law. It says failure to comply does not affect the ability to make or operate laws. This doesn’t apply to the part of the bill about regulatory reviews, which do come with legal obligations.
Who’s for it?
David Seymour has publicly promoted and defended the bill. On his Facebook page, he outlined why he introduced the bill.
“The Bill means less red tape; more getting on with life and creating wealth in this country.
“It requires politicians and officials to ask and answer certain questions before they place restrictions on citizens’ freedoms. What problem are we trying to solve? What are the costs and benefits? Who pays the costs and gets the benefits? What restrictions are being placed on the use and exchange of private property? Where inconsistencies with the Bill’s principles are found, the responsible Minister must respond to justify the deviation.”
He also told Newsroom the bill would have no effect on any government’s ability to pass any law.
“It does require they publish a Consistency Assessment Statement. The statements show the public if a new law violates their rights and if so, how. Unfortunately, we’re seeing a surge in claims resulting from Regulatory Standards Derangement Syndrome,” he said.
“These claims are wrong. The bill ensures all regulatory decisions are transparent about their basis, whether economic, social, or health-related. Under the bill, if a lawmaker wants to take away your property or freedom, they’ll need to show their working. If they want to pass, for example, a new tax on junk food, they’ll have to outline the expected costs and benefits. The bill won’t stop them from passing the tax, but it will arm voters with better information.”
Dr Oliver Hartwich, executive director of free-market think tank the New Zealand Initiative, wrote an article decrying the condemnation of the bill.
“The government wants to pass a law that would require ministers to explain their regulatory decisions. That is it. Ministers would simply need to show how new rules stack up against basic principles like clarity and fairness.
“Yet somehow, 88 per cent of public submissions on this modest ‘Regulatory Standards Bill’ – nearly nine out of every ten – have condemned it,” he wrote.
“[Seymour’s] Bill would create a framework requiring ministers and government departments to follow clear principles when making rules and regulations, being precise about their objectives and showing they respect property rights. They would have to issue statements explaining how their rules serve the public interest. If they chose to ignore those principles, they would have to say why.
“An independent board would review these statements and report its assessment to the relevant Parliamentary Select Committee. Its assessments would be non-binding. Parliament could ignore all its findings. No court could strike down a law because of this Bill. Democracy would carry on as before.
“It is not dissimilar to fiscal rules that are already in place. New Zealand governments must justify their spending against agreed benchmarks. Nobody claims those rules threaten democracy. Yet the regulatory equivalent has provoked a bizarre backlash.
“Reading the submissions, you would think Seymour had proposed abolishing elections or installing himself as dictator. His critics conjure nightmares in which indigenous rights are erased, the environment laid waste and corporations run amok.”
At the first reading of the bill in parliament, various National Party MPs made short statements in support, including the following:
Cameron Brewer: “I just want to correct one thing, and the perception over here is it’s something that David Seymour’s come up with overnight and on the back of an envelope. But, as one of his previous press releases acknowledged, the long, long work put together goes right back to the Association of Consumers and Taxpayers. It goes right back to Dr Bryce Wilkinson’s book, which laid the groundwork constraining Government regulation. It goes right back to the Regulatory Responsibility Taskforce that refined this very bill back in 2009. It’s got a very long and considered history, and so I congratulate the Minister for Regulation. We look forward to the submissions, and I commend the first reading.”
Ryan Hamilton: “It’ll be great to actually talk about the bill. Some critics have attacked this as being an ideological scheme to shrink the Government. On this side of the House, we actually don’t think that’s a bad idea. We believe in less Government. Let’s take this to the Finance and Expenditure Committee and see what we can do.”
Nancy Lu: “Many New Zealanders have called for a regulatory responsibility law to help restrain the growth of unnecessary and poor quality regulations, so let’s take it to the Finance and Expenditure Committee. Let’s hear from the public. Let us scrutinise this bill.”
Dan Bidois: “Most people would agree that regulation is important but that regulation often does more harm than good. One more important person, moral philosopher, quoted in the 1700s, Adam Smith: ‘The proposal of any new law or regulation of commerce ought always to be listened to with great precaution and ought never to be adopted until having been long and carefully examined.’ It is with that scepticism that we support this bill in the House, and my message to the public is clear: submit to the Finance and Expenditure Committee; I look forward to hearing your submissions. I commend this bill to the House.”
Who’s against it?
Legal academic Eddie Clark described the proposed principles on Bluesky as “like if actual constitutional principles were put through a libertarian funhouse mirror”, and pointed out that they were distortions of existing Legislation Design and Advisory Committee
(LDAC) guidelines.
“The problem with the RSB principle is all the ‘ands’ (and the very odd, idiosyncratic ‘cost should be paid by those who obtain a benefit’ thing. Not just property should generally be respected; that’s a longstanding common law principles. But that compensation inevitably flows from that. It omits the bit that is actually not omit-able: that there may well be policy justification for impairment or taking property without compensation. No, that principle isn’t strictly binding, but it sets an unrealistic and not widely accepted expectation for how internal prelegislative processes will work.
“So if you’re a Libertarian ideologue, you’d look at the LDAC principle and the RSB one and say ‘these are basically the same’, when in fact they’re not. And they’re trying to apply that funhouse mirror to the way officials think about turning policy into law. That’s why it’s objectionable.
“My submission is basically: don’t do this, but if you are going to do this, redraft the principles to be normal world version of the principles in the LDAC guidelines, not through the libertarian looking glass versions. I’m hoping some NZF MPs will bite on the latter.”
Cultural commentator Dame Anne Salmond wrote an opinion piece for Newsroom, in which she described the bill as “a dangerous piece of legislation”.
“First, it lacks a strong democratic mandate.
“As many experts have pointed out, under such an arrangement, taxpayers may be required to compensate tobacco companies for regulations that reduce their profits by seeking to minimise the negative health and economic impacts of smoking; mining, industrial forestry and other extractive industries for regulations that seek to minimise environmental harm and damage to communities; and many other activities in which capital seeks to profit at the expense of others.
“The accumulation of wealth and power by the few at the expense of the many is precisely what is undermining other democracies around the world.
“It is inimical to the very idea of democracy as government ‘of the people, by the people, for the people,’ in which governments are supposed to serve the interests of citizens, not of capital or corporations,” she wrote.
“Act’s attempt to paint this bill as an innocuous attempt to promote good law-making in the interests of citizens is disingenuous, and should be recognised as such.
“Rather, this is a dangerous bill that attacks the fundamental rights of New Zealanders, and democratic principles. It must not be allowed to pass.”
In a Labour Party press release, Labour’s regulation spokesperson Duncan Webb says the bill put “corporate interests ahead of our communities, environmental protections, and Te Tiriti o Waitangi”.
“Under the Regulatory Standards Bill, laws that would keep people healthy and safe, like requiring landlords to heat homes, or limiting the sale of vapes, would be at the whim of whether David Seymour thinks they’re a good idea or not.”
He says it is hypocritical that the coalition Government cut short the consultation period on a bill that claims to improve lawmaking processes.
My cuppa tea
Given the general uproar, I was surprised when I read the bill that it isn’t anywhere near as far-reaching as I’d been led to believe.
If the bill passed, it wouldn’t be the end of our democracy. It wouldn’t irrevocably hold all future laws to David Seymour’s personal standards of libertarianism.
But, I don’t think it should pass. Why? It’s dumb, it’s a distraction, it would make our legislative system moderately worse.
Let’s explore it.
First up, as Act keeps pointing out, this bill doesn’t create any enforceable laws. It says it right there in the bill, anyone can ignore this law without any repercussions. So, what’s the point?
Well, it’s not entirely true that there aren’t any legal repercussions. That statement doesn’t apply to Part 3 of the bill, the part regarding regulatory reviews.
Part 3 says if government ministries and agencies don’t hand over the information MFR needs to create its consistency reports, MFR can take them to the High Court.
Existing laws addressing the release of information will still apply, which I take to include the Official Information Act (OIA) and the Privacy Act.
For anyone who doesn’t know about this beautiful piece of New Zealand law, the OIA says that the public owns all government information, and any member of the public can request the release of information from any government department, agency, organisation or enterprise.
There are exclusions to the OIA. For example, they don’t have to release information if it breaches someone’s right to privacy, compromises certain business negotiations, or puts our national security in danger.
Currently, any government department has the ability to issue an OIA request to any other department, which again begs the question: what does this bill actually add?
I don’t really have an answer for you. Honestly, I don’t get why David Seymour and Act are chasing this so hard.
Act is ostensibly all about reducing inefficiencies, reducing costs. The whole point of the new MFR was to tackle inefficiencies.
But this bill proposes extra bureaucracy and extra cost, for apparently little or no benefit.
For every new law, the agency responsible must include a statement stating consistency with the principles and explaining any inconsistency. The agency gives it to its minister. The minister presents it to the House of Representatives. The agency publishes it publicly on the internet. And then there’s a similar bureaucratic process required for ongoing reviews of each law.
It creates new work for chief executives of other ministries and government agencies. Then the board needs to be paid, and requires money to conduct reviews and create reports.
David Seymour has become the very thing he swore to destroy.
The only thing I can think of, it this seems like a power grab for Seymour’s personal ministry. A way of enshrining it in law so it, or something like it, continues to exist.
Then, there’s the debate over companies being able to take the government to court for compensation when laws cost them money.
Honestly, I’ve read convincing lawyer opinions that say this kind of court action would be possible, and those that say it wouldn’t. Critics say it will undermine the bedrock of our democracy. Seymour says the law is non-binding and those criticisms are groundless. I suspect we won’t find out unless this bill passes and the courts decide its application, but there is a concerning amount of noise being made by legal experts.
Hay has also been made over the fact the Regulatory Standards Bill does not require legislators to consider the principles of the Treaty of Waitangi.
Act already attempted to address this with its Principles of the Treaty of Waitangi Bill, which was handily defeated earlier this year. I think the best case for this current legislation was for Seymour to leave the Treaty out of it. Still, it would be nice to see a re-write that included these important provisions.
One thing that might change my mind would be if, as Eddie Clark suggested, Act were to re-draft the bill to reflect the LDAC principles rather than partisan-influenced principles. But I’d also want to see a point to the bill that was more than just creating more paperwork.
When push comes to shove, the Regulatory Standards Bill does not pass its own test. It’s inefficient, it’s expensive, and it covers areas that are already covered by existing laws and processes.
