New Zealand needs regulatory reform, now. 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 but has fallen behind since. The Government needs to get out of the way and let people get on with things.

It might seem ironic for a politician to be writing this, but it goes right back to the ACT Party’s reason for being. As written in the Party’s constitution “(ACT) exists to promote and implement better policy for all New Zealanders, particularly through reducing the role of government and increasing the role of free markets.”

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

Addressing New Zealand’s decades-long productivity problem is needed to make it easier for businesses to innovate and grow. It doesn’t mean turning industries into the wild west, but if the compliance burden caused by a regulation outweighs the benefits, then it shouldn’t be in 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.

The Ministry is focused on lifting quality across all regulatory systems and supporting agencies with regulatory responsibilities to align with good regulatory practice.

Restoring Public Confidence in Regulation

Bringing our regulatory system up to speed requires reformation of existing inefficient and over burdensome regulations, ‘red tape.’ The Ministry has been and will continue to target these areas with sector reviews. They’ve started off with the Early Childhood Sector. 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.

Over time a regulatory system should produce a greater stream of benefits or positive outcomes than costs or negative outcomes. Regulation should only be imposed or increased when the Government is satisfied that it will deliver net benefits.

I am currently working on developing a regulatory standards bill, which will assure high quality regulatory decision making across all of Government. The 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?

Our job 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

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