This document provides a summary of a draft report on New Zealand's regulatory system. It finds that the system is large and complex, with over 200 different regulatory regimes administered by various agencies. While generally functioning, the system could be improved. It lacks flexibility and responsiveness. Regulations are often outdated and inconsistent between regimes. More evaluation and review is needed to improve regulatory effectiveness over time. The skills and implementation of regulators could also be strengthened. The report recommends establishing clearer leadership over the regulatory system and improving monitoring of regulator performance.

1. Summary presentation of draft report
March 2014

2. Terms of reference
• High-level map of regulatory regimes and
regulators
• Guidance to inform the design of new
regulators and regimes
• System-wide recommendations to improve
the operation of regulatory regimes
• Specifically consider improvements to
monitoring of regulator performance
2

3. Sources of information
• 53 submissions
• 92 engagement meetings
• A number of case studies
• Surveys
– 1,526 NZ businesses
– VUW/PSA survey of public servants
– 23 regulator CEs
3

4. Key points
• It’s a big system
• It’s not broken but could be much better
4
200+
DIFFERENT
REGIMES
20 ACTS
REPEALED
IN 2013
NEW IN
2013
2,871
ACTS CURRENTLY IN
FORCE
148
10,000+
WORKERS

5. Agencies with regulatory roles
0.5 n Number of FTEs directly involved in regulatory implementation (approx) → 130 y ← Is the regulatory agency responsible for
implementing regulations that overlap with those
implemented by other agencies?Wa Atomic symbol → Cc
New Zealand
Walking Access
Commission Regulator name →
New Zealand
Commerce
Commission
Establishment FTE count, whole organisation
4.9 180
3 y 7.8 y 0.45 y
Bs Ta Fl
Broadcasting
Standards
Authority
Takeovers Panel
Commission for
Financial Literacy
and Retirement
Income
5 7.8 15.5
8 n 18.3 n 14 y
Ga Pg Pi
Gas Industry
Company
Office of Film &
Literature
Classification
Office of the
Privacy
Commissioner
16 22.7 30
36 y 60 y
Not
available
y 11 n 115 y 89.6 y 77 y 0.575 n 130 y
El Hd En Hi Fi Ep Ma Tr Cc
Electricity
Authority
Health and
Disability
Commissioner
Energy Efficiency
and Conservation
Authority
New Zealand
Historic Places
Trust
Financial Markets
Authority
Environmental
Protection Authority
Maritime New
Zealand
Ministry of Transport
New Zealand
Commerce
Commission
66 68.54 98 107 134 146 148 155 180
129.9 y 28 y 122 n 283 y 280 n
Not
available
y 122 y
Not
available
y 2,350 1 y
Ci Rb Qu La St Co In Ed Mb
Civil Aviation
Authority
Reserve Bank of
New Zealand
New Zealand
Qualifications
Authority
Land Information
New Zealand
Statistics New
Zealand
Department of
Conservation
Department of
Internal Affairs
Ministry of Education
Ministry of
Business,
Innovation and
Employment
214.4 258 447 475.8 1018 1861 2091 2660.5 3,255
Source: Table compiled using regulatory agency responses to a Productivity Commission information request.
Notes:
1. The Ministry of Business, Innovation and Employment include immigration officials in its estimate of staff directly involved in regulatory implementation.

6. Key points
• It’s neither flexible nor responsive to changing
circumstances
• Bespoke – too many unjustified inconsistencies
• Set and forget mentality
– Need more evaluation & review to improve regimes
– Not a lot is known about it (compared to taxing and
spending)
• More attention to skills and implementation (and
impacts of complexity)
• The system needs stronger “ownership”/leadership
4

7. Our approach
• A focus on design
elements
• How these shape
regulator
capability and
behaviour
• To achieve good
regulatory
outcomes
7

8. The system isn’t flexible enough
• We have a ‘set and forget’ mentality until
something goes badly wrong
• Need to evaluate the effectiveness of
regulation more systematically
• Need mechanisms to update regimes more
effectively
– For example, delegating greater rule-making
power to regulators
8

9. Best practice regulations?
• Two-thirds of CEs surveyed didn’t think so.
9
MORE THAN HALF OF PUBLIC
SECTOR CHIEF EXECUTIVES*
AGREE THAT AGENCIES
OFTEN HAVE TO WORK WITH
LEGISLATION THAT IS
OUTDATED OR NOT
FIT-FOR-PURPOSE
17%
STRONGLY
AGREE
26%
NEITHER AGREE
NOR DISAGREE
48%
AGREE

10. There are too many unjustified
inconsistencies
• We have 200 bespoke regimes, with mixture of:
– delegated legislation
– organisational form and governance
– Treaty clauses
– obligations to consult
• A more principled approach will help:
– make comparative performance evaluation easier
– make it easier to set up new regimes
– boost effectiveness of the overall system
10

11. We need to pay more attention to
skills and how regulation is implemented
• Many businesses expressed low confidence in the
skills and knowledge of regulatory staff
• There is a perception gap between chief
executives and frontline staff about:
– the size of skill gaps
– the availability of training
• Need more focus on:
– lifting skills
– improving practice
– sharing across the system
11

12. The checks on regulation
need to be stronger
• More delegated rule-making will require stronger
checks, including greater Parliamentary oversight
(Regulations Review Committee)
• The courts play an important role, especially
through judicial review
• The benefits and costs of appeals needs to be
carefully thought through
• Independence matters – political intervention
inevitable, but needs to be channelled in a way
that maintains integrity of the regime
12

13. Regulators’ performance could be better
monitored and evaluated
• Expectations on monitoring departments are
weak
– Monitoring does not add value to regulators
– Not meeting the needs of Ministers
– Needs to be more active and valued
– Respective role of monitoring departments and
boards confused
• Treasury and SSC need to take a more active role
in setting expectations, and monitoring
departmental regulators
13

14. The regulatory system as a whole
needs a leader
• Role of minister responsible for regulation
should be more clearly defined
• Need to set strategic objectives for the
regulatory system as a whole
• Will require better and better-resourced
support from central agencies
14

15. Next steps
• 13 March 2014: Public release of draft report
• 8 May 2014: Final date for public submissions on
draft report
• March-May 2014: Engagement with participants
and refinement of inquiry results
• 30 June 2014: Final report delivered
15
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