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Army of 10,000 overseeing outdated and poorly written regulation

A 10,000-strong army of bureaucrats is administering as many as 200 different regulatory regimes which often overlap, are outdated, poorly written, or inadequately reviewed before being implemented, says the Productivity Commission in its final report on the impact of New Zealand's regulatory environment on economic performance and productivity.

"New Zealand has a large and complex regulatory system," the commission says in a report that urges much greater leadership from top government agencies, especially the Treasury, because of the potential for too much regulation to act as a dead weight on activity right across the economy and society.

While a variety of mechanisms exist to try and improve the quality of new regulation, the commission says the Law Commission has recently stopped reviewing all legislation for regulatory coherence because of funding cuts, while Parliament's regulations review select committee is a shadow of its former self, with dwindling membership by MPs and insufficient support staff.

The system requiring all new legislation to include a regulatory impact statement, while innovative when first introduced, is not working as intended, the commission says.

The New Zealand Parliament also showed a tendency to a far greater volume of new legislation and regulations than comparable Westminster Parliaments, introducing "on average, 100 to 150 Acts and about 350 Legislative Instruments" annually since the mid-1990s.

"The large stock makes it difficult for ministers and officials to know whether specific regimes are still needed, or are delivering the outcomes that were originally intended," the commission found. "A vigorous and well-focused review programme could help remove unnecessary and inefficient regulation, and fix holes in regimes."

The report also identified "highly variable departmental appointment processes" for regulatory bodies, "including inadequate assessments of the skill needs of boards, poor planning and patchy induction for new board members." Both the Treasury's and State Services Commission's expertise in appointments to departments and state-owned enterprises should be drawn on by agencies seeking to appoint regulators.

In a more wide-reaching proposal, the commission also suggests that policy departments are not always the best judges of the quality of regulatory implementation.

"The commission heard from a number of parties that the best judges of regulatory practice are other regulators, and found these arguments persuasive.

"A system of peer reviews should be established, where panels of senior regulatory leaders, such as current and former chief executives, would examine and provide feedback to regulators, and should become part of the Performance Improvement Framework audits of government agencies overseen by the SSC."

Using polling it commissioned from Colmar Brunton, interviews and a survey conducted by the Public Service Association, which represents government workers, the commission found evidence of a mismatch between the views of regulatory agency leaders and their staff, and between regulators and the regulated.

Staff on the whole disagreed more than they agreed that their agencies were good at learning from mistakes or encouraged challenges to poor practice, while the majority of their managers believed there was good communication and feedback occurring.

"The response of some regulators has been to adapt to their mistake-intolerant environment by encouraging behaviour that minimises the 'threat' of harsh criticism," the report says. "Through time, this strategy has proven successful in reducing criticism, embedding a culture that places a high value on managing institutional risk."

The result was weak evaluation and a 'set-and-forget' mentality that favoured judgements about performance based on recognising mistakes rather than successes. It also found low completion rates for qualifications available to regulatory staff over the last six years.


Comments and questions

And what is happening with this?? I assume as usual nothing, put in a draw, propose another committee to look at the report??

100 to 150 Acts and about 350 Legislative Instruments" annually since the mid-1990s? The fastest legislature in the west strikes again.

10,000 -strong army and a Productivity Commission, is that an oxymoron, or what?

Someone bring back Rodney Hide's Regulatory Responsibility Bill please.

Remember when they simplified the building code? How did that work for ya? And cutting all that red tape around mine safety worked a treat as well. And lightening up on finance companies really helped to grow that industry. I would rather have bureaucrats then a " self-regulating market".

I agree. The PC is itself a bureaucrat palace - with supposedly private sector folk who are now on the gravy train (visiting foreign countries to 'learn', etc - on taxpayer funded business class - I met 2 of them on a flight to London - my b/class was paid through a singapore company!). The USA understands that having a market system requires regulation (because only a fool believes in the 'invisible hand of the market to self-regulate"); hence any growing economy requires a stable & improving bureaucracy. The pity is that the PC chose to not focus on improvement and instead jumped on the numbers game - perhaps this is easier to sell or perhaps it reflects the half-baked ideology of the commisioners?

They didn't simplify the building code. They approved new materials and methods without adequate warning to the public of the risks and dangers which had already become apparent in Canada.

The public then foolishly believed big bureaucracies were still baby-sitting them and taking responsibility for everything.

As soon as the public became aware of the problem, leaky homes became unsaleable. The Government should merely have legislated that local governments are responsible only for health and safety and left the free market to deal with and solve the problems. Unfortunately we then had a Labour Government who converted a temporary disaster into a permanent one by attempting to solve bureaucratic failure with more bureaucracy.

An unregulated market leads to monopoly and terrible service.

You mean like the "good old days" of NZ Post's telecommunications network? Because that was a shining example of terrible service and a monopoly and it was run by the "magic bureaucrats" that somehow make everything better.

Or the Ministry of Works that was the most efficient and cost effective method of getting roads built?

Monopolies can only exist because government allows them. The market has nothing to do with it.

We need to reduce the size of our bloated bureaucracy.

To summarise, the Law Commission has stopped reviewing all legislation because of funding cuts, and as a result, inefficiencies are emerging in the form of both gaps and double ups.

Isn't the message here that we need to INCREASE our bureaucracy?

Agree that from building to telecommunications to media to investment to (ahem) immigration, market models have turned out to be - well - anything but.

Thinking there should be industry bodies or associations that have regulatory authority like intro of the FMA.

But all industries have this.

As well as a tribunal process. An interim stage before high court / lawyers etc. but more weight and authority than ad hoc industry arbitration.

We all know central government beast is useless at regulating all industries and really shouldnt have to. It's always last to Pick up problems too.