David Seymour’s regulation decimation could learn a thing or two from Iceland

OPINION

In the rugged landscapes of Thingvellir National Park, just outside Iceland’s capital Reykjavik, lies a reminder of a simpler time in governance.

During a visit many years ago, I was struck not just by Thingvellir’s natural beauty but by its historical significance: Thingvellir was the site of Iceland’s parliament from the 10th to the 18th century.

It was a parliament unlike any we know today. Meetings were held outdoors, and the assembly convened only once a year.

But the most amazing thing I learnt about this ancient parliament was the role of the elected lawspeaker. This poor fellow had one task, which was simple and yet monumental: to recite all of Iceland’s laws… from memory.

When parliament reconvened the following year, if the lawspeaker had forgotten a law, it was no longer a law. This tradition, which lasted for centuries until Iceland’s laws were finally written down, imposed a natural limit on the complexity of laws and regulations.

Reflecting on this ancient practice, I cannot help but contrast it with the state of our modern regulatory systems. Today, we face a labyrinth of acts, regulations and forms that govern almost every aspect of our economy and society.

The hale and hearty wilds of Thingvellir in Iceland could teach us the value of simple laws. Photo / Anna Gorin, Getty Images

Businesses navigate a maze of health and safety regulations, environmental standards and employment laws, each more complex than the last.

No one could remember all our laws. Few people would even know what laws exist. Certainly, nobody could recite them in their entirety.

In part, the complexity of the regulatory state is the price we pay for living in a more developed world than, say, medieval Iceland. And yet, there is a widespread sentiment that matters could be much simpler, and cheaper.

Act leader David Seymour, the new Minister for Regulation, has the task of streamlining regulation. He will establish a new Ministry of Regulation from the ruins of the disestablished Productivity Commission.

Seymour’s vision, as championed during the campaign, is for a regulatory system that is efficient, transparent and, most importantly, sensible. But how will he go about simplifying our complex regulatory state? The answer lies in the structure of the new ministry.

Its key functions will be to evaluate new Government proposals to legislate or regulate, assess them against principles of good regulation, and make recommendations on whether they should proceed. These principles cover problem definition, cost-benefit analysis, regulatory design, workability and simplicity.

For existing regulations, the ministry will conduct rolling reviews of red tape, department by department. The minister will first declare a priority sector for review. The ministry will then assess all regulations in that sector over six months, including primary legislation and secondary rules. It will consult widely to identify problematic regulations.

Act Party leader David Seymour, pictured during the election campaign. Now he's about to pilot a new ministry aimed at slashing allegedly Byzantine bureaucracy. Photo / Alex Cairns

Following that stage, the minister will publish a report for the relevant portfolio minister, identifying regulations to cut. Within three months, that minister must approve removing those regulations or explain why they should remain. If the portfolio minister agrees, the Minister of Regulation will introduce an omnibus bill to repeal the red tape.

There are overarching transparency mechanisms to ensure deregulation happens. The Minister of Regulation will publish an annual audit of deregulation commitments and timelines across Government.

Overall, the new ministry will institutionalise assessment of regulatory quality and drive reform through transparency and accountability. But to succeed, it will need co-ordination across Government.

The ministry’s sector-by-sector regulatory reviews could be highly disruptive. Affected agencies are likely to resist what they regard as interference in their affairs.

For example, reviewing health regulations could antagonise the Ministry of Health. The only way around this will be a collaborative approach, without compromising the goal of better regulation.

There are risks of regulatory overlap and confusion if responsibilities are not clearly delineated. For instance, workplace safety regulations could fall under the auspices of both the Ministry of Business, Innovation and Employment and the new Ministry of Regulation. There must be clear rules regarding who will be accountable.

The purpose of the Ministry of Regulation is sound, but the path to better regulation will not be straightforward. It goes against a regulatory culture that has grown over decades and cannot be uninstalled overnight.

Ultimately, the ministry’s success will depend on cultural change in the public sector to see regulations as living systems requiring continual review and improvement. This change could take years to permeate the Wellington bureaucracy, and will require buy-in from those leading the process.

As strange as it sounds, there are some ongoing lessons from medieval Iceland.

Of course, the lesson is not that all laws need to be memorised. That would be as silly as saying modern parliaments should meet in the open.

Rather, Thingvellir’s enduring lesson is that good laws and their application need to be as simple as possible. We cannot memorise everything – but perhaps laws should be memorable. Or at least sensible.

This is especially important today. The complexity of our world has necessitated the introduction of more and more laws. And this is what makes the new Ministry of Regulation so important.

So, let us all wish Seymour success in his new role, with hope he’ll bring some of Thingvellir’s ancient wisdom to the complex world of modern regulation.

Oliver Hartwich is the Executive Director of The New Zealand Initiative.