A select committee has recommended several amendments for the controversial Regulatory Standards Bill, though Opposition parties continue to express deep concern that it places private interests above public good.
The legislation, which has been called everything from an attempt at improving “transparent and principled law-making” to “quite bizarre” and a “power grab” for the “old boys’ network”, was the subject of tens of thousands of public submissions this year.
It sets out “principles” for regulation. They don’t have legal effect – meaning not following them isn’t unlawful – but are intended as a guide for lawmakers and officials as to what is considered responsible regulatory practice. Legislation would be assessed as to its consistency with the principles, though any findings would not be binding on Parliament.
The bill, stewarded by Act’s David Seymour, has been contentious for a list of reasons, including concerns that it prioritises private property rights, is unnecessary, and doesn’t properly account for Te Tiriti o Waitangi.
It is part of the National-Act coalition agreement, which says the parties commit to “legislate to improve the quality of regulation, ensuring that regulatory decisions are based on principles of good law-making and economic efficiency, by passing the Regulatory Standards Act as soon as practicable”.
Coalition partner NZ First has previously expressed a desire for changes to the legislation. The party’s leader, Winston Peters, wouldn’t say in an interview with the Herald in July whether the bill reflected principles of good lawmaking and economic efficiency.
He instead repeatedly said his party would wait to see what came from the select committee process. NZ First was contacted for comment on Friday.
The legislation has been sitting before Parliament’s finance and expenditure select committee since passing its first reading in the House in May. The committee reported back on Friday, recommending “by majority” that it be passed.
The report included several recommended amendments, including clarifying some of the principles laid out in the legislation.
These include changes to a principle that legislation “should not take or impair” property without the owner’s consent unless there is a “good justification” and “fair compensation” provided by the party benefiting.
This principle caused some concern among commentators that the legislation could lead companies to require compensation if their property is negatively impaired as a result of legislation or regulation.
However, other legal experts and the minister have largely dismissed this concern, saying no new legal obligations or rights that are enforceable in court are created by the legislation.
The committee has suggested the clause could be made “clearer”, so it applies only when there is a “high degree of impairment, not simply any impairment”. “Severe” impairment would be required under the committee’s recommendation.
A new principle has been recommended by the committee to reflect that “good law-making should recognise the importance of planning for the implementation of legislation while it is being developed”.
Another provision has also been suggested to make clear that nothing in the bill would stop other additional principles not expressly mentioned from being considered when legislation is created.
The committee also wants the legislation to more clearly articulate that any legislation that provides redress for Treaty of Waitangi claims is excluded from consistency assessment requirements.
Another concern with the current legislation relates to the formation of a Regulatory Standards Board, which would be the entity to consider the consistency of legislation with the proposed principles. Members of the board would be appointed by the Minister for Regulation, raising questions about the degree of independence the board would have.
To address this concern, the committee said the bill should include a clause stating “the board must act independently (and is not responsible to a minister) in relation to performing its functions”.
The Regulation Minister would also no longer make appointments, under the committee’s proposed change, with that power instead transferred to the Governor-General on the recommendation of the minister.
Seymour told the Herald that the addition of “severe” to the impairment principle would allow “trivial effects on property to be overlooked”.
“This will make the Bill easier to administer, and ensure declarations of impairment are taken seriously when they are made.”
He said work was underway on guidance for all terms in the principles, including what constitutes severe impairment.
“I’m very happy with where the Select Committee has landed. The changes to the principles are net helpful, and the changes to how the Regulatory Standards Board is appointed, at the request of New Zealand First, will increase its independence and effectiveness.”
Seymour said passing the bill was a goal of the Government’s this quarter.
There are two “differing” views included in the report from the Labour Party and the Greens, with both Opposition parties expressing concern about the legislation.
Labour called it a “deeply flawed and ideologically driven bill” which sought to “entrench into New Zealand lawmaking a set of principles that puts private interests above public good and property rights before community wellbeing”.
It highlighted that the vast majority of nearly 160,000 submissions on the bill were opposed to it, and criticism came from a wide variety of different sections of society.
Among a series of themes Labour included in its response was that it was “ludicrous” for the legislation to purport to be reflecting good regulatory principles without mentioning the Treaty of Waitangi.
“Te Tiriti is our founding document and is the basis of the relationship between the Crown and Māori. Adherence to its principles is a fundamental part of our constitutional framework – including in the lawmaking process. The exclusion of Te Tiriti is an egregious failure and an affront to Māori.”
It said the principles selected were “not broadly accepted as an appropriate basis for lawmaking”.
“Most contentious is the statement that the law should not have the effect of impairing property. While rights to property are recognised in law, the promotion of this principle to that of a guiding light in lawmaking effectively gives it constitutional importance. It places property rights above other rights in the lawmaking process.”
Labour said giving primacy to the protection of property rights from impairment and the expectation of compensation “plays into the hands of corporate interests that this Government has shown itself supportive of”.
The Greens made clear in their comments that the party, if in power, would repeal the legislation and abolish the Ministry for Regulation.
“We consider that the Regulatory Standards Bill will have a negative impact on protections for Te Tiriti, people, and planet and create a tsunami of unnecessary yellow tape [yellow being a favoured Act party colour], which is why we oppose it unequivocally.”
It was critical of what the party said was a lack of meaningful engagement with Māori during the development of the bill.
“The omission [of] references to Te Tiriti o Waitangi, and ... many provisions of the bill, particularly the principles, [risk] damaging the interest of Māori and could further entrench the structural discrimination faced by Māori.”
With regard to the views that the legislation should reference Te Tiriti in its principles, Seymour has previously said he hadn’t heard an argument about why it should be referenced.
“All these people sort of mindlessly say, ‘you must have the Treaty of Waitangi because it’s our founding document’.
“All of that is true, but they aren’t really able to give a practical example of why making the Treaty a principle in this particular law will change the amount of red tape New Zealanders face.”
NZ First’s Peters has suggested on several occasions that his party wanted changes to the bill.
Asked in July whether he believed the bill would ensure good lawmaking and economic efficiency, Peters told the Herald his party was waiting for the select committee report.
“You’re talking about the fundamental process of democracy that has come down over hundreds of years of development and reform. Good lawmaking processes have certain content to them.
“They include consulting the people. They include ensuring that the people responsible are those who will be elected by the people who, if they’re not satisfied with them, can dismiss them at the next election or even sooner.
“These are all fundamentals. This is a huge issue that we’re talking about here. It’s no minor matter.”
He said no one was arguing that the current bill would be the one that would be passed into law.
Jamie Ensor is a senior political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist this year for Political Journalist of the Year at the Voyager Media Awards.