Editorial: Red tape review just tinkering

The business sector's enthusiastic response to a review aimed at cutting red tape must gratify the Government. Business leaders had good reason to be underwhelmed by other aspects of the Budget, and to be dismayed by the slow march of corporate tax reform. They could easily have regarded a review of regulations as a sop. As it is, their support is likely to be severely tested as the taskforce process lumbers on - and as it becomes clear that this will, at best, be an exercise in tinkering.

Commerce Minister Lianne Dalziel has made the parameters of the review quite clear. It will not, she says, traverse "policy" areas, the likes of the Employment Relations Act, taxation and the Resource Management Act. Yet they were among the issues topping the list of small-business concerns, according to Ministry of Economic Development research. They are also leading examples of the ongoing compliance requirements that so irritate business. Putting them out of bounds becomes even more limiting, and ultimately self-defeating, when it is considered the regulation taskforce will be marshalled by the very same ministry that identified their significance.

Instead, the review will focus on peripheral matters. It will look, for example, at the overlapping requirements of different government departments in the area of occupational health and safety, and consider a more efficient way of assessing the impact of policies at the start of the development process.

Never mind that tackling the former should be well within the wit of the relevant departments, while the latter sounds like the obvious cue for a watchdog agency, similar to Canada's Red Tape Commission, to vet legislation before it gets to Parliament. Certainly, nothing in the scope of the review suggests an exercise that has been designed to extend for more than a year.

Equally relevant is the fact that the Government has no compunction in dismissing out of hand any findings that conflict with its own thinking. The McLeod tax review's fate offered graphic evidence of that. A repeat rejection would be predicated on the World Bank's assessment, for the second year running, that New Zealand is the best place in the OECD for "ease of doing business". That reckoning probably referred more to setting up a business than ongoing problems. Nonetheless, a 10 per cent increase in the number of small- and medium-sized businesses last year pointed, albeit during prosperous times, to a relatively benign regulatory set-up.

Cutting compliance costs has, in fact, become a mantra for business leaders. The Government claims to have eliminated 139 of these expenses. It sometimes seems that business will not be satisfied until none exist. This, again, is ammunition for the Government if the sector becomes disenchanted with the review process, or its conclusions.

There is much to suggest the review will achieve little. And that will mean it has wasted the time and effort of government departments and the businesspeople who answer Ms Dalziel's call to become involved. For the bureaucracy, those hours and that energy would be better employed tackling skills shortages, sluggish productivity and other more pressing issues. For business, there may be missed opportunities, sometimes with implications for job creation.

A government of ideal make-up would make this sort of review redundant. It would include people with the background and nous to know what is holding business back, and how to rectify that. This review, one of many instigated over the past few years, conveys its own message about this Government's limitations. As does the fate of previous taskforces, and the probable destiny of this one.