Curran Clare: Regulatory Standards Bill — First Reading 
Curran Clare: Regulatory Standards Bill — First Reading 
[Volume:673;Page:19766] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I am pleased to take a call on the first reading of the Regulatory Standards Bill. I too have listened to some of the discussion in the House this afternoon. As members no doubt know Labour is opposing this bill. We support the principles of better and more efficient regulation and also good lawmaking. However we believe that this bill seriously fails to meet and achieve this aim. It will create compliance costs for Government departments through the certification process and the annual report and it blurs the line between the judiciary and the executive. 
We certainly as I said stand for the improvement of regulation and lawmaking. Much of the work done by the previous Minister of Commerce the Hon Lianne Dalziel aimed to achieve that and we are still seeing many of the bills that are part of that process coming before the Commerce Committee. 
We are saying today that this is a confusing and ineffectual bill which will not lead to better legislation but will instead clog up the courts with cases arguing the meaning of vague principles. This bill fails its own proposed standard of clarity of legislation and will force the already over-encumbered judiciary to take on the role of policy analysis for all Government legislation. New Zealand lawmaking although it could be better in some cases—in particular the super-city legislation for example—is generally already of a reasonably high standard which makes this unnecessary and potentially very expensive legislation. This bill is a solution that is searching for a problem and it is a poor solution at that. 
The Hon Rodney Hide and the ACT Party tried to get this bill through Parliament before now in the form of the Regulatory Responsibility Bill in 2006 but it was rightly rejected by the Commerce Committee as being overly complicated unnecessary and even unconstitutional. Now we have it back. The  
New Zealand Herald  
has described the bill as ill-considered the Maxim Institute calls it a wolf in sheep’s clothing and Treasury itself in the regulatory impact statement says it believes it would be ineffective and unnecessary. Constitutional law expert Richard Ekins of the University of Auckland went as far as to say that this bill is “hostile to our democratic constitutional order.” Why then is the Minister bothering to bring this deeply flawed bill back to the House? 
I will read out some of the principles of the bill in a nutshell. The bill sets out the principles of responsible regulation. It will apply to all legislation—including a newly and widely defined category of “legislative instrument” derived from Australian federal legislation—to ensure that all instruments of the lawmaking or legislative character of central government not merely administrative are covered. It will provide a process for certifying that proposed new regulation is compatible with legislative principles which will be done by those responsible for creating or administering it. It will provide a role for the High Court to declare whether a provision of any regulation is incompatible with one or more of the legislative principles unless under clause7(2) the “incompatibility … is justified to the extent that it is reasonable and can be demonstrably justified in a free and democratic society.” For regulation made before the date the bill comes into force some declarations may be made only after 10 years from that date. 
The principles central to this bill are vague they are based on a failed ideology and they are legally suspect. There is a principle under clause 7(1)(c) that no legislation is to “take or impair property” but if it does it must be necessary in the public interest and the owner will receive full compensation. As Brian Fallow of the  
New Zealand Herald  
has pointed out: “On the face of it this would debar Parliament from doing anything redistributive.” I will read another couple of quotes from his article of Thursday 24 March: “It is what  
Yes Minister 
’s Sir Humphrey Appleby called the politician’s syllogism: Something must be done. This is something. Therefore this must be done.” 
He also said that “One of the Regulatory Standards Bill’s central principles against which legislation is to be measured if taken literally would tend to freeze the existing distribution of wealth. It says legislation should not ‘take or impair … property’ unless it is necessary in the public interest the owner receives full compensation and that compensation is provided to the extent practicable by or on behalf of those who benefit from the taking or impairment.” As he said “On the face of it this would debar Parliament from doing anything redistributive. That would depend on what content the courts gave to the concepts of taking impairment full compensation and the public interest. Those are just some of the concepts in the bill which it makes no attempt to define and delimit—leaving that to the courts.” That is why Labour is not supporting it. 
I have another important point and I would be interested to know from any future speakers from the other side of the House just what they will do in the future; I know they are going to support the bill to go to a select committee. Mr Fallow ended his article by saying: “The Government is only committed to supporting the Regulatory Standards Bill as far as select committee consideration. Labour is expected to oppose it. So it may well never see the light of … day.” 
Considering the disdain that the Hon Rodney Hide has for the supposedly bloated Public Service why is he introducing legislation that will increase the compliance and reporting costs of public entities? Treasury already carries out regulatory impact statements for new legislation a mechanism the previous Labour Government improved to help ensure efficient and necessary regulation. With the new Productivity Commission also having some oversight in this area any further legislation is completely unnecessary and a waste of the taxpayer’s money. Under this bill the relevant Minister and public entity will be required to undertake a certification process with regular reviews and annual reporting by that entity. There is also the very real prospect of litigation by outside parties if a judge is to make a declaration of incompatibility. 
Considering that this Minister has continually proclaimed his intention to cut red tape I cannot understand the rationale behind this bill because it promises to significantly increase compliance costs for our already overstretched Public Service. The role of the judiciary under this legislation is of concern as it will require those in the legal profession to become skilled at policy analysis with regard to regulatory law. Judges will be asked to interpret the poorly defined principles of this bill and how they apply to any new law. Because of the requirement of judicial oversight of all new legislation using these principles as the guideline the judiciary will have incredible power over Parliament with regard to lawmaking and policy. The bill could politicise the courtroom as judges will be required to make political value judgments. 
Initially this legislation will apply to only new bills but after 10 years existing regulation will be open to reinterpretation by the courts and potentially we could see judges reinterpreting provisions in older laws to make them consistent with the principles of this bill. Is that democratic? It will essentially change the meaning of a law that was passed by a previous Parliament. I can already see some big corporates planning their cases to challenge regulations imposed under old law and that process clogging up our courts further. 
Labour is not opposed to improving the lawmaking process. We spent much of our last term improving legislative analysis through the regulatory impact regime and the Hon Lianne Dalziel oversaw the Quality Regulation Review which focused on improving regulatory barriers to business growth. This House has already passed the Regulatory Improvement Bill the like of which will be passed annually to ensure regulation is efficient and necessary. We support good law but we do not support this bill.