Letter From The Leader
Friday, April 1 2011

The Purpose of the Regulatory Standards Bill

There has been much objection to, and criticism of, the Regulatory Standards Bill – formerly ACT’s Regulatory Responsibility Bill – by media and commentators. So I would like to set the record straight for members and supporters alike, as to what exactly this Bill will achieve.

Many cite the fact that 22 Government Departments have objections to this Bill as a reason why it should not be supported. I, on the other hand, firmly believe that having so many Government Departments object probably means this Bill is on the right track. It shouldn’t surprise us that many politicians and bureaucrats will resist having greater transparency and accountability applied to their law-making and regulatory processes. But greater discipline on law makers is the only way to improve the quality of the laws and regulations that tie up citizens in red tape.

The Bill is primarily a transparency and accountability measure. Ministers bringing forward new laws and regulations must certify whether they comply with long-standing regulatory principles of the type that are already Cabinet requirements. If not, and they still wish to proceed, they must explain why any departures are justifiable in a 'free and democratic society'.

That is a greater discipline than exists at the moment, but still provides Ministers a good deal of leeway. By itself, the requirement might not be very effective in reducing the flow of low quality laws and regulations which entangle our community in red tape, and slow the potential growth of incomes and wealth in our community.

This is why the Bill increases the discipline further by allowing members of the public to ask a court to make a declaration that a law or regulation is incompatible with its provisions. Such a declaration might embarrass a sponsoring Minister or Government, therefore creating an incentive to ensure more careful crafting of laws and regulations. However, it would make no difference in itself to the legal effect of the law and regulation.

Of course, many would-be plaintiffs might decide that the remedy provided by a successful action is too weak to justify its costs and risks, which is why it is fanciful to suggest – as some have - that such a limited remedy would 'create a lawyers field day'. A similar provision in the UK has not had this effect. In contrast, poor quality legislation demonstrably does lead to on-going litigation.

Since the provision is unlikely to lead to a great deal of litigation, its purpose is, instead, to induce officials, Ministers and the Government to think harder about a law or regulation in the first place, given the potential for a subsequent embarrassing court declaration. The more they do this, the less the risk of subsequent litigation, and the better will be our lawmaking.

The suggestion that such a mild discipline would redefine the relationship between Parliament and the courts in any material way is also fanciful. The law would remain in place regardless of a judicial declaration of incompatibility, and Parliament's position as supreme law maker would be unchanged. The courts in countries such as the Australia and the United States have far greater constitutional powers.

Some claim that the Bill has received a fusillade of criticism from some of the country's best legal minds. This is nonsense. The mild nature of what the Bill proposes speaks for itself. I don't believe the critics could claim to be the country's best legal minds, whereas the taskforce included and consulted some of the country's top legal and constitutional experts in preparing its report.

The principle that the Crown should compensate property owners when it takes their property in the public interest is a fundamental common law principle that has been part of English law at least since Magna Carta. It has always been a core part of New Zealand's Public Works Act. Dr Michael Cullen acknowledged, in a seabed and foreshore context, that to take property without compensation is theft.

The objection that paying compensation would 'freeze the existing distribution of wealth' is a misconception. The compensation principle does not apply to taxation, and welfare spending need not be affected.

Finally, the objection that the Courts should not be asked to judge whether departures from legislated principles are ‘justifiable in a free and democratic society’ ignores the fact that this is accepted practice under the New Zealand Bill of Rights Act. I fail to see why it can be accepted practice in one context but not in another.

The tabling of the Bill in the House will give the public a chance to make submissions on it. I have an open mind on how the Bill might be improved, including suggestions for increasing the disciplines it seeks to impose.

Poor quality laws and regulations are imposing undue burdens on the community and we need better solutions. The experts on the taskforce have given it their best shot. If someone can improve on that, I would be delighted.

Hon Rodney Hide
Leader, ACT New Zealand

ENDS

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