Hon David Seymour
Minister for Regulation

Most of New Zealand's problems can be traced to poor productivity, and poor productivity can be traced to poor regulations.

The OECD Product Market Regulation Indicators shows the quality of regulation in New Zealand is in freefall. From being ranked 2nd in 1998, we are 20th in this year’s survey. Data shows several key categories of market regulation governing Kiwis are well off the OECD average, hindering competition and growth. It’s no coincidence that New Zealand experienced strong productivity growth in the 1990s, when deregulation was last on the government’s agenda, but has fallen behind since.

The cost is hard to quantify, but we can say confidently that billions of dollars are sapped from New Zealand’s economy every year from regulatory burden. In 2015, an NZIER study estimated the cost for businesses to comply with tax and regulatory requirements at $5 billion, or around 1.3% of GDP. Over half of that wasn’t including tax regulation.

That was a decade ago, the cost to New Zealand’s economy will have only increased.

Difficult compliance and poor regulation is costing New Zealanders time, money, sanity, and the country billions each year. It’s not just that red tape and regulation has disempowered people and businesses, it is replacing the No. 8 wire, can-do kiwi attitude with a culture of fear and compliance.

I think of some of the great New Zealanders – Sir Edmund Hillary for example. Would we be able to produce another world-beater like him now? Or would the areas he climbed growing up be taped off for health and safety now?

We can blame the regulatory state for replacing real responsibility. Regulation has become a giant scheme to prevent anyone ever having to take a risk or make a real decision. So long as you tick all the boxes on the lending form, put out enough orange cones, and have a suitable ‘procedure’ written for everything your organization does, you have covered your responsibilities.

It’s time for another period of de-regulation, with actions to make sure future governments don’t fall into the same old routine of stacking up regulations. There are thirty-odd departments making regulation, we reasoned, so why not one to delete it? There is a whole Treasury Department devoted to spending what’s been taxed off you, so why not one to manage regulation of the property you still have.

I’m proud to stand as New Zealand’s first Minister of Regulation, with a Ministry whose job it is to look for red tape to cut. I think it’s fair to say they’re in demand and they’re going to be busy, but they’re going to make New Zealand a better place.

On the 1st of March 2024, I set up the Ministry for Regulation with three tasks. One, to cut existing red tape with sector reviews. Two, to improve the scrutiny of new laws. Three, to improve the capability of the regulatory workforce.

Today I announced consultation will begin on a piece of legislation that will bring the same level of discipline to regulatory management that the Public Finance Act brings to public spending.

The Regulatory Standards Bill will be to regulation what the Public Finance Act is to public expenditure. If passed, it will put in statute the principles that Government must adhere to when making regulations. We’re introducing a principle that the regulated party should be the centre of impact analysis. Officials will need to ask themselves - will this rule make the boat go faster or is it just another barnacle on the ship?

The proposed principles are:

1. The importance of maintaining consistency with the following aspects of the rule of law:

• the law should be clear and accessible
• the law should not adversely affect rights and liberties, or impose obligations, retrospectively
• every person is equal before the law
• there should be an independent, impartial judiciary
• issues of legal right and liability should be resolved by the application of law, rather than the exercise of administrative discretion.

2. Legislation should not unduly diminish a person’s liberty, personal security, freedom of choice or action, or rights to own, use, and dispose of property, except as is necessary to provide for, or protect, any such liberty, freedom, or right of another person.

3. Legislation should not take or impair, or authorise the taking or impairing of, property without the consent of the owner unless:

• there is good justification for the taking or impairment
• fair compensation for the taking or impairment is provided to the owner
• compensation is provided to the extent practicable, by or on behalf of the persons who obtain the benefit of the taking or impairment.

Government departments won’t be able to regulate to simply scratch an electoral itch, they’d need to follow a set of principles that prevents unnecessary regulation.

You might have read this morning about the Red Tape Tipline, a new portal set up by the Ministry for Regulation to allow the public to get in touch with their red tape horror stories.

We want to hear from the tradies, farmers, teachers, chefs, engineers, you name it. If there’s red tape in your industry that needs cutting, we want to know about it. The Ministry might not be able to resolve every issue that’s brought to its attention straight away, but we are keen to understand more about people’s experiences with the regulatory system.

The Ministry has been and will continue to target different areas with sector reviews. They’ve started off with the Early Childhood Sector, where issues with affordability and availability of early childhood education, and the complexity of its regulation, led to urgent calls from the sector to conduct a review. We heard reports from centres around the country where teachers and carers are spending their time dealing with regulators and writing reports and plans on absurd things like the risk of apples falling from a tree in the playground.

In the agriculture and horticulture sector, we heard that red tape stops farmers and growers from accessing products approved by other OECD countries. The Ministry is also progressing a review of the red tape that prevents access to these products. It can take nine years and wrangling government agencies to get approval for some products that other OECD countries are already using. If we want to be the world beaters that we like to think of ourselves as, that has to stop.

My aim is to restore public trust and confidence in the New Zealand regulatory system by being a voice for high quality regulation within the Government, lifting the quality of regulation, circulating good practice quickly, and raising the capability of regulators.

Finally, we’ve got a mechanism to do this. What I want from all of you, the businesses that are actually doing the work, building the economy, bringing prosperity to our communities, is to tell us what you want. We’re here to help.

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