Regulatory Standards Bill — First Reading 
Regulatory Standards Bill — First Reading 
[Volume:673;Page:19751] 
Regulatory Standards Bill 
First Reading 
Hon RODNEY HIDE (Minister for Regulatory Reform) 
: 
 I move  
That the Regulatory Standards Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Commerce Committee for its consideration. 
The Regulatory Standards Bill aims to improve the quality of regulation in New Zealand. As a Government we use our powers to regulate to ensure that people live safe lives get treated fairly protect the environment maintain a competitive and efficient economy and much more. But regulation also imposes costs. Excessive regulation can impose unnecessary compliance costs on businesses and individuals and to tier investment and can limit innovation and competition. Decade by decade the quantity of regulation made in New Zealand has increased. Between 2000 and 2009 over 68000 pages of legislation were passed. This equates to creating or amending around 105 Acts and 405 regulations each and every year. Many of the countries we compete with have focused on improving the quality of their regulation with more success than New Zealand has had. New Zealand’s ranking in the OECD product market regulation indicators has fallen from 4th in 1998 to 14th in 2008. As a small isolated country we need to do better if we want to be competitive in the global economy. 
Regulatory quality has been a strong focus for this Government as set out in the  
Government Statement on Regulation 
 of August 2009. We have introduced a number of administrative measures designed to improve regulation as it is made and to improve the stock of existing regulation. These measures include strengthened regulatory impact analysis requirements a programme of regulatory reviews and a Government-wide scan of the regulation on our legislative books. These measures have led to improvements in the quality of regulatory policy advice provided to Ministers. The fact is however that administrative measures alone will never be enough to deliver the level of improvement that New Zealand so desperately needs. Only the Regulatory Standards Bill’s more stringent requirements can bring about a change in the way that Governments think about regulation. 
The Regulatory Standards Bill has its origins in the Regulatory Responsibility Bill which I introduced as a member’s bill in 2006. The Regulatory Responsibility Bill was examined and substantially revised by an expert Regulatory Responsibility Taskforce established by the Government in 2009. The Regulatory Standards Bill is a result of the work of that task force. I would like to thank Dr Bryce Wilkinson who first put forward the case for the Regulatory Responsibility Bill in his 2001 publication  
Constraining Government Regulation 
. I would also like to acknowledge Roger Kerr executive director of the New Zealand Business Roundtable for his tireless work in gaining support for this bill over the last 10 years. 
The Regulatory Standards Bill aims to increase the transparency of lawmaking and the accountability of lawmakers. The bill has three key components: it provides a benchmark through a set of regulatory principles that all regulation should comply with; it provides transparency by requiring those who propose and create regulation to certify whether the regulation is compatible with those principles; and it provides monitoring of the certification process through a new declaratory role of the courts. The bill identifies a set of principles of responsible regulation that all regulation should be consistent with. Regulation is defined to include Acts of Parliament statutory regulations and tertiary legislation but excludes regulation made by local government. 
The principles are distilled from sources such as the Legislation Advisory Committee guidelines common law and Parliament’s own Regulations Review Committee. The principles cover seven key areas including the rule of law the protection of individual liberties the protection of property rights the imposition of taxes and charges the role of the courts the review of administrative decisions and good lawmaking. These principles are guides not binding rules. From time to time breaches of the principles will be necessary. The bill provides for this and this is a key point: it allows Parliament to pass any legislation regardless of whether it complies with the principles. All that the bill requires is that departures from the principles are “reasonable and can be demonstrably justified in a free and democratic society.” 
In order to encourage transparency about whether regulatory practices are consistent with the principles of responsible regulation the bill imposes certification requirements on those who make regulation. Under the bill chief executives and Ministers responsible for proposed regulation must certify whether that regulation is consistent with the principles. Where regulation does not comply with one or more principles the Minister responsible must explain why that non-compliance is demonstrably justifiable in a free and democratic society. If there is no Minister responsible as is the case with some tertiary legislation the responsibility falls to the chief executive. Certification allows others to understand the impacts of proposed regulation and the trade-offs that we have had to make. We can and do have significant impacts on New Zealand businesses and New Zealanders when we use our regulatory powers. It is only right and proper that we should be open about the impacts that our proposed regulations will have. 
The bill provides for the monitoring of the certification process by allowing the courts to provide declarations of incompatibility where they believe the principles have been breached. This power is declaratory only. The courts will not have the power to strike down legislation to issue injunctions against Parliament or the Crown or to award damages to those adversely affected by regulation that is incompatible with the principles. Parliament members will be pleased to learn remains sovereign. The purpose of the declaratory function is to provide an independent informed opinion on whether regulation complies with the principles. The function encourages Ministers and chief executives to certify diligently and in good faith as their certifications are liable to be tested in court. Initially the courts would be able to make declarations only in relation to regulations made after the commencement of the legislation; after 10 years the declaratory power would extend to all regulation. 
In addition to the three key components of the bill in terms of principles certification and monitoring by the courts the bill requires the courts to prefer legislative interpretations that are consistent with the bill’s principles. This provision initially applies only to new regulation but after 10 years applies to the existing stock of regulation. The bill also requires every public entity to use its best endeavours to regularly review all regulation that it administers for compatibility with the principles. The steps that entities have undertaken to review their regulation and the outcomes of the process must be included in their annual reports. 
This bill provides us with better discipline for creating and managing our regulation. It provides transparency in a similar way to the Public Finance Act. That Act imposes certain responsibilities on Government spending. It says that if we are spending public money we should justify it and be accountable for it. The Act has created a cultural shift in the way that money is spent in New Zealand and in the whole mindset on public expenditure. This bill places similar responsibilities on Government regulators. It says that if we are using the Government’s regulatory powers we should justify that and be accountable for it. This transparency will result in higher-quality regulation that has fewer unintended consequences. It will reduce compliance costs and that better achieves policy objectives. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I have been waiting for the opportunity that the Regulatory Standards Bill represents to express my significant level of disappointment at the Government agreeing to allow this bill to go to a select committee for the sake of political expediency. That is all we will get from the Government on this bill. I do not doubt the bona fides of the Minister of Local Government who is introducing this bill. He has stated his position on the record more than once. The history of this legislation goes back to the time when I was Minister of Commerce and he was a member introducing a member’s bill on regulatory responsibility. I admire the fact that he has consistently argued for the same result that this bill represents. 
The Government I think should be a little bit more upfront in terms of its approach to this bill. We know it will vote for the bill to be referred to a select committee at which point its support for it will end. That will mean that good people out there will make submissions on this bill both deeply opposed to it and vociferously in favour of it. We will hear all of those submissions report the bill back to the House and that will be the end of the matter. I think that is not fair. I do not think it is fair to the House the submitters or the Hon Rodney Hide who has put so much of his personal integrity on the line on this particular bill. I am not as inclined as the Government to waste the time of the House therefore Labour will be opposing this bill at its first reading and its referral to a select committee. 
The reason we oppose this bill is the principle that we do not agree with the content of the bill. The bill contains the original flaw that stymied the original member’s bill when it was introduced to the House a few years ago. That original flaw is that it allows the courts into the lawmaking process itself. The Minister can say as much as he likes that the sovereignty of Parliament is protected but we know the courts and we know that if we allow them to make declarations as to consistency they will be entering into the legislative arena and they are not equipped to do so. 
Enabling people to go to court for a statement of non-compliance will hold up the implementation of Government policy. National says that is good. What would have happened to the 100 days of action if the rules that are contained within this legislation had been set in concrete at that point? It would not have been 100 days of action. We know how many days of action it would have been. In fact it would have been 100 days of inaction followed by many more days of inaction followed finally by days of action as proper regulatory impact analysis after regulatory impact analysis was undertaken. I have not gone back to do a count of the bills passed in those first 100 days of this Parliament but not many had regulatory impact statements of any quality attached to them at that particular time. 
Moana Mackey 
: But they said they would. 
Hon LIANNE DALZIEL 
: No the Government did not have them attached. National was elected on a platform and that is what politics is about. National was elected on a platform stating that it would do certain things and there was no way that it would introduce regulatory impact statements in order to back up those changes. So it is OK to have regulatory impact analysis as we end a parliamentary term but heck no way would we have regulatory impact analysis when we are starting our term with 100 days of action! 
People are assuming that it will all be one-sided about who will go to court and create this period of uncertainty. Do members think the union movement would have gone to court over the 90-day bill? Absolutely it would have gone to court. 
As the Minister who spearheaded the Quality Regulation Review I am disappointed that the Government is fixated with form over substance. That is what this bill is. We do not need a law to tell us to follow guidelines that already exist in this country. We just need Ministers who are compelled and absolutely determined to undertake all of their work in accordance with those guidelines and principles. We need Ministers who understand why the processes are important and who require their departments to stand up to the very high standards that they set for themselves. 
I think the National Party should be ashamed of itself. Based on the principles of the Regulatory Standards Bill the bill itself would fail to meet the test of responsible regulatory management. Who said that? Do members think an extreme left-winger said that? It was not. It was George Tanner who was New Zealand’s top statutory draftsman. He was the Chief Parliamentary Counsel here in Parliament. He states that “The Bill uses open-textured language” that will lead to uncertainty of meaning. According to him the bill “attempts to define good law-making by reference to a set of simple principles: in doing so it obscures the complexities inherent in them and creates the same lack of clarity and uncertainty that it seeks to prevent.” Brian Fallow stated that the principles are abstract constitutionally unorthodox and substantively unsound. 
When I launched the Quality Regulation Review which addressed regulatory barriers to business growth I knew we had to have a stronger mechanism in place to make sure that the regulatory impact analysis was being undertaken. I was not able to deliver that from the Ministry of Economic Development’s regulatory impact assessment unit. I could not do that so I met with Michael Cullen. He was the Minister of Finance and we agreed that we would put the oversight for regulatory impact analysis into the heart of Government: Treasury. That is where we shifted it to and that is where it stays. I believe that is where it has always belonged enabling departments to step up to the plate as far as regulatory impact analysis goes. 
We made sure that regulations that were being proposed were necessary and efficient and we required all our departments to really come to grips with problem identification. That is one thing that the regulatory impact statement that accompanies this bill does not do. It does not even have a proper problem definition. How on earth does one fix a problem if one has not identified the problem? 
In terms of setting out the options I want the House to know that Treasury which we have now entrusted to undertake this role does not believe that this option—a bill—is the best option for New Zealand. Are we just doing this for a figurehead reason? Treasury believes that legislation “has a status profile and educative effect that equivalent administrative measures or Standing Orders can’t quite match. But it is also more formal less adaptable to varying circumstances harder to fix or amend in response to problems or changing needs and brings with it the potential involvement of the courts with sometimes unpredictable results.” 
Treasury’s statement continues: “For promoting legislative quality there are limits to what we can expect from a legislative initiative. It is very hard to use legislation to target the quality of policy development and legislative review because the quality of these processes is not readily observed or verifiable by outsiders. It can only encourage behavioural change but the pressures incentives and biases acting on Ministers and officials that lead to poor legislation are strong. Unless it somehow catalyses a new behavioural norm the gains in legislative quality will probably be modest. … The big question marks are really the risk of unintended outcomes and the ability to manage costs if benefits turn out to be far less than hoped. These are the reasons we do not recommend adopting Option 1—the Taskforce’s proposed Bill.” and the modified version we have here today. “The likely approach and effect of court involvement is impossible to predict and we think the interpretive direction creates a particular risk of unintended outcomes.” 
This bill does precisely the opposite of what it states it intends to do and that is why the Labour Opposition will not be supporting the first reading and referral of this bill. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is my privilege to speak to the Regulatory Standards Bill. May I acknowledge the Minister for Regulatory Reform for bringing this bill to Parliament and for the work he has done on the principles around regulations and in terms of improving the way that Parliament works. The previous speaker Lianne Dalziel will rail against this bill proceeding to the select committee. I was not in the last Parliament and I did not get an opportunity to listen to the submissions on the Regulatory Responsibility Bill but I certainly welcome the new bill. I look forward to hearing the submissions to the select committee with an open mind in terms of proceeding with the bill through its process. 
What does this bill do? If we go back to first principles we see that it is about breaking regulations and making more effective laws and regulations as part of this Government’s brief. It is part of the plan that the Labour Party does not have. That plan is to increase our exports. It is a plan about innovation and trade. We have just heard in the last week that the Prime Minister has been to India to negotiate the type of trade agreement that will bring about prosperity for this country. The plan is also about making Government services more effective. That is part of our plan. It is also about effective taxation. Last year’s tax switch was another building block in this Government’s regime to bring about prosperity. The Government’s plan is also about infrastructure spending. So breaking regulations and certainly making more effective lawmaking processes are part of our plan. 
What does the bill do? Cutting red tape and regulations certainly is about driving economic growth. It makes it easier for businesses and New Zealand companies to do better. By doing better they provide better and more opportunities for those who are after jobs. The bill is also about as the Minister pointed out in his speech putting in place an annual programme to clean up regulations. Before the Commerce Committee right now we have a regulatory reform bill whereby we are cleaning up a number of statutes across the legislative menu. It will simplify a number of laws and establish productivity-raising regulations. 
Hon Lianne Dalziel 
: My idea. 
PESETA SAM LOTU-IIGA 
: Ms Dalziel says it is her idea—but we are implementing it. She might have thought about it but we are carrying out and doing the things that will bring about change in this country. 
This bill is about providing better regulation and less regulation. When we think about the competing interests in terms of regulations we know that New Zealanders are affected by regulation every day whether it be the speed limit on our roads or the fact that we drive on the left-hand side of the road. Regulations help to ensure that we live safer lives that we are treated fairly that we protect and manage our environment and that we have a competitive and efficient economy. Those are the things that this Government stands for. But regulation is much much more than that and we know that. As lawmakers we have to be careful because regulations also have costs. They have unintended impacts and consequences and if regulations are poorly conceived and poorly implemented they can lead to significantly higher costs which can hinder our freedoms as individuals and stifle innovation and productivity. 
National will introduce new regulation only when we are satisfied that it is required that it is reasonable and that it is robust. We have gone about our legislative programme whether it is simplifying employment law to encourage employers to hire new staff reduce compliance costs and give choice in terms of holidays and whether it is introducing changes in the Resource Management Act which had become so stifling of creativity and business development that we have had to streamline some of the provisions of that Act. We have allowed for example simplified consents for major projects including—and the member of Parliament for Taupo was here—a $1 billion private geothermal power station in Taupo which was approved within a record 8 months. We have put in place that sort of regulation-busting legislative agenda. 
If we talk about this bill—and I know that the honourable member for Christchurch East did not even refer to the bill once—and look at the principles behind it we see that they are principles that we take for granted but that are not sometimes followed. They are principles of the rule of law. They are principles around our individual freedoms and liberties. They are about protecting private property rights which the Hon Rodney Hide has championed during his career as a politician. They are about the role that the courts play within the democratic process and about what good lawmaking process is. I certainly commend the referral of this bill to the select committee. I look forward to the submissions both for and against the bill. I certainly will treat this bill with the respect that it deserves. 
CHARLES CHAUVEL (Labour) 
: 
 I agree with some of what the last speaker Peseta Sam Lotu-Iiga said about the principles of the Regulatory Standards Bill. They are at least on their face principles that pretty much anybody should support. Obviously legislation should be consistent with the rule of law. The law should be clear and accessible. It should not adversely affect rights and liberties or impose obligations retrospectively. Every person should be equal before the law and issues of legal right and liability should be resolved by the application of law rather than by the exercise of a discretion on the part of officials elected or otherwise. Those principles are incontrovertible and as my colleague Lianne Dalziel said are the basis on which the legal system rests. They are the basis on which all the presumptions around our legislation are construed when the courts exercise their ultimate right to decide what we meant when we made a law. 
Similarly in respect of liberties laws should not diminish a person’s liberty personal security freedom of choice or action or rights to own use and dispose of property except as is necessary to provide for or to protect any such liberty freedom or right of the person themselves or of another person. But in this legislation we again have a fundamental principle or canon of interpretation that the courts will use now when they construe legislation passed by this House. They will read laws down if they appear to offend against those principles. Only if this Parliament were to use the clearest possible words could the courts come to a contrary conclusion. 
Likewise there is a principle contained in the bill around the taking of property: laws should not take or impair or authorise the taking or impairment of property without the consent of the owner unless there is an overriding public interest involved full compensation for the taking is provided and it is provided on behalf of or by the persons who obtain the benefit of the taking. Again no one who has studied our constitution would find that surprising. 
Likewise taxes and charges should not be levied under any administrative provision; they should be authorised only by a principal enactment. The charge should be reasonable in relation to both the benefit the payers are likely to obtain from the goods or services and the cost of efficiency in providing the goods or services. Again that is inarguable. 
In terms of the role of the courts they should always have that authoritative right to determine the meaning of legislation and there should always be a right of appeal on the merits against decisions to a court or other independent body and there should be appropriate criteria laid down for the making of decisions by the court or independent body. 
Finally there are principles enunciated around good lawmaking. Laws should not be made unless to the extent practicable the persons likely to be affected by the legislation have been consulted. Laws should not be made unless there has been a careful evaluation of the issue of the effectiveness of existing legislation and law of whether the public interest requires that the issue be addressed and of any other options including non-legislative options for dealing with the problem. There should be careful evaluation of who is likely to benefit and who is likely to suffer a detriment from the legislation. There should be careful evaluation of the potential adverse consequences of the legislation including the Crown’s potential legal liability that are reasonably foreseeable. The benefits of the legislation should outweigh the costs of it and it should be the most effective efficient and proportionate response to the issue concerned. Again nobody could argue with these principles. They are right and they are self-evident but they exist already in terms of the way hopefully we evaluate legislative proposals. 
One of the problems about the bill and one of the reasons why members on this side have real concerns is that although it seems to state very fair-sounding principles very inarguable principles principles that most would accept without second thought the way in which the principles would then be applied to legislation is the problem. The bill provides that wherever an enactment can be given a meaning that is compatible with the principles it is to be preferred to all other meanings. 
A court can make a declaration of incompatibility between legislation that this House this Parliament may make in future and the principles outlined in this bill if we are to pass it. The problem we then get constitutionally is that if the court does that the declaration of inconsistency has no legal effect. It does not affect the continuing operation of the inconsistent measure and no court may hold any provision of the legislation to be impliedly repealed or revoked. So what is the point? That is really the question here. What is the point in this legislation? Why bother stating principles that already underpin our constitutional arrangements then get a court to say that a future Parliament has breached those provisions but if we do the court’s declaration will not mean anything? What sort of constitutional merry-go-round are we talking about here? What sort of waste of money are we contemplating putting on the statute book by engaging in this exercise? 
I just want to run through some of the criticism that I think has been made justifiably of the bill apart from the problem that I have just identified. First of all the Regulatory Responsibility Taskforce failed to justify why this sort of bill is necessary. There is very little evidence showing why a rigorous or intensive approach is required as opposed to some of the other options that were canvassed by the Commerce Committee when mark 1 of this legislation was considered. There is no convincing argument as to why legislation is required to ensure better legislation as opposed to other means of improving the way that we do things here. When we measure the Regulatory Standards Bill against its own principles it is clear that no responsible legislator could vote for it. 
There is ambiguity in the legislation and again referring to earlier attempts in this area George Tanner QC referred to the open-textured language used which leads to uncertainty of meaning. He said: “It attempts to define good lawmaking by reference to a set of simple principles: in doing so it obscures the complexities inherent in them and creates the same lack of clarity and uncertainty that it seems to prevent.” 
I referred earlier to the difficulty that this legislation will create for the third branch of our government the judiciary. As Sir Geoffrey Palmer has pointed out in a recent article: “Neither the judges nor the legal profession are proficient in policy analysis of the type that leads to regulatory legislative proposals.” In this respect the Regulatory Standards Bill would confer on the judiciary a novel role for which they are not resourced or equipped. I can hear the cries now from parliamentarians and others who do not like the idea of judges expressing a view on policy and content yet here is exactly what is being invited of them by this legislation. We will get all sorts of accusations about the activist judiciary overstepping the mark and overstepping its role yet that is exactly what we would be inviting them to do by the text of this legislation. 
I think ironically this bill will create more compliance costs than it would save. The relevant Minister or the public entity will need to undertake a certification process. There will be regular reviews of all legislation annual reporting requirements by every entity ministerial oversight of the review and then the prospect of litigation being generated by the possibility of an application for a declaration of incompatibility. That all implies massive resources particularly over a 10-year time frame which George Tanner QC referred to as unworkable and unrealistic. 
We have real problems in the legislation. There are better alternatives. The Commerce Committee has already considered those and has said that if a regulatory impact statement and ministerial sign-off on compliance with Legislation Advisory Committee guidelines were taken seriously they would make a real difference here. We should try using what we have improving it and actually adopting the principles that the bill would exhort us to follow. We should look at what we have and decide whether it is workable before we embark on an innovation such as this which will be costly and unworkable. That is my challenge to the Minister. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on the first reading of the Regulatory Standards Bill a bill put up by the ACT Party and apparently being voted for by the National Party. This bill has so many things wrong with it that it is hard to know where to start so I thought I would start in the middle and talk about the issue of takings. I think that is an interesting issue which this bill very much brings to the fore. 
The way that this bill works is that when a bill comes to Parliament the Minister and the chief executive have to sign a piece of paper that says the bill meets the regulatory principles or if it does not there is public interest in it not meeting those principles. There is a set of principles and I want to talk about one of those principles which is the issue in regard to takings and property. Basically the bill states that legislation cannot take someone’s property or impair someone’s property unless that is in the public interest and that person or corporation is compensated in the process. That is essentially what it says. If we were to take some case studies to flesh out what this would mean I think it would demonstrate the problem with this kind of approach to lawmaking. 
For example we can talk about the plain packaging of tobacco products. If a Government were to introduce the plain packaging of tobacco products certain tobacco companies would argue that their property rights had been impaired as a result of that. Philip Morris could come out and say it used to be able to use its Marlboro brand and all the rest of it but it cannot any more so therefore its property rights had effectively been impaired. Philip Morris could say that if the Government thinks there is a public interest case so be it but the Government would have to compensate Philip Morris if the Government were to follow the principles in this bill. That would mean that before the Government could move to introduce the plain packaging of tobacco products it would be required to compensate Philip Morris for the entire impairment of the intellectual property rights around its branding. If this sounds vaguely familiar the reason is that Philip Morris is currently launching a case against the Australian Government under the provisions of a bilateral investment treaty between Australia and Hong Kong that uses exactly the same principles. Over there it is termed “expropriation” or “indirect expropriation” but it has exactly the same meaning. 
My challenge is to the Labour Party actually. While Labour was in Government it signed a whole bunch of trade treaties that had exactly the same provisions which enable multinational companies to sue our Government through bilateral investment treaties. Those provisions are within the China free-trade agreement and a bunch of other bilateral investment treaties have those provisions as well. It seems to me that signing up to trade agreements or passing law that enables corporations to sue Governments for their actions is a very very bad idea. If we were for public health reasons to require the plain packaging of tobacco then I think that would be just too bad for Philip Morris. I do not think we should compensate Philip Morris for the fact that it would lose some money in the process. I say to National that if it introduces this kind of law the onus would then be on the Government whenever we wanted to introduce a regulation that would impair someone’s property rights to compensate them if we were to be consistent with the principles of this bill. I ask whether that is really what the Government wants to do. 
We know the answer to that question and it is that the National Government does not want to do this because this is not the first time that this kind of legislation has come to Parliament. In fact a bill that came to Parliament under the name of Gordon Copeland previously did a similar kind of thing. At the time the National minority view opposed it. Chris Finlayson was leading the opposition to it at that time. He said the amendment would “have far-reaching implications and could well be the cause of a great deal of litigation against the Crown” if we were to introduce this kind of principle. He meant that if we introduce the kinds of laws that say we cannot pass a law without compensating someone whose property is impaired then all of a sudden we could be sued by a whole bunch of corporations whenever we tried to pass legislation that they did not like. The National members of the Justice and Electoral Committee went on to state: “compensation issues should not be simply left to the courts. There should always be a proper statutory basis for compensation.” It should not be left to the the courts and the process through the courts for corporations to sue the Government or Parliament if we try to introduce rules. 
There is a bunch of other rules that we could talk about—for example those on building standards. Building standards are a very relevant issue because New Zealand has just had the leaky houses crisis. One estimate is that the leaky houses crisis has cost our country $20 billion because of the poor regulatory framework that was set up around the building industry. The weak building regulations have had to be strengthened in recent years as a result of the disaster of the leaky housing crisis. There would be those involved in the industry who would argue that if we tried to strengthen building standards and that resulted in their products—for example monolithic cladding; James Hardie’s comes to mind—no longer being used or not being used as much as previously because we had strengthened the building regulations then they could sue us as a result of the impairment of their property. James Hardie’s could say the Government’s new building regulations would result in its monolithic cladding—which was one of the causes of the leaky housing disaster but not the only one—no longer being used because everyone was going for weatherboard and therefore the Government had cost it an awful lot of money and it wanted compensation. James Hardie’s could say that under this Regulatory Standards Bill which Parliament had been silly enough to vote for the firm had the right to sue the Government for compensation because it has closed up the rules around leaky houses. 
The reason that this issue is particularly apposite on this occasion is that the chair of the working-group that put the basis of this bill together was none other than Graham Scott who more than any other person in New Zealand is responsible for the leaky houses crisis. I like to call him our “$20 Billion Man” because he was the head of Treasury when all the relaxation of the building standards was pushed through. Treasury was very active under Mr Scott in relaxing the standards around building. It is in fact the ACT Party and Mr Scott who can be blamed for the $20 billion leaky houses crisis. If there could ever be an example of a situation where regulations are important and necessary the leaky houses disaster is probably the most obvious one. There are many other examples but that is one example of a situation where having good strong regulations can be expensive upfront because it means the houses costs a little more to build but actually is in the long-term best interests of the country—and especially of the people who are now living in rotting houses and having their life savings whittled away because National weakened the standards around buildings back in 1991 with its Building Act. 
If this bill were actually to become law then it would become difficult to tighten up the rules around building standards. If we discovered that a mistake had been made that allowed a bunch of bad products and bad practices to result in a leaky housing disaster and we wanted to tighten the rules those companies that lost money as a result—and some would—could rightly sue the Government for compensation. We can imagine the chilling effect that it would have on the Government if every time that we wanted to fix up a regulatory problem we had to compensate everyone who had lost property or had their property impaired as a result of that process. It would make it much more difficult. 
Think for example about environmental standards which are another classic problem. Climate change—by introducing a carbon tax there are winners and losers. Those people who have carbon-intensive products would sell less of their product as a result of a carbon tax and their businesses would be worth less. They could rightly argue that their property rights had been impaired and therefore could sue the Government for compensation if we tried to restrict greenhouse gas emissions in New Zealand. The Government would have to compensate them. Every business would line up in the courts and seek compensation if these kinds of principles were put into law. 
There is so much that is wrong with this bill and I have focused on just one particular aspect. We could also talk about the way that the judiciary would be dragged into the policy process. We could talk about the way that the neutrality of the Civil Service would be compromised because senior public servants would have to basically sign off on political processes. We could talk about the fact that this bill will not even necessarily help business because it would make the process of lawmaking and regulation much more difficult. But I think that it is worth thinking particularly about the property compensation issues because they have relevance not just for this bill but also for the bilateral investment treaties that Labour and National are both very keen on. Thank you. 
Hon HEATHER ROY (ACT) 
: 
 I am very pleased to rise in support of the Regulatory Standards Bill. The Minister for Regulatory Reform gave an excellent speech about the history that led us to this point and what this bill will do. Listening to the Green member who has just spoken Russel Norman reminded me exactly why this sort of legislation is needed. He took the opportunity when speaking on this bill to have a whack at everything he dislikes. There was some environmental stuff in there. The ACT Party and Graham Scott who probably best understands public policy in this country got a swipe. Russel Norman started off by talking about one of the Green Party’s old favourites—the plain packaging of cigarettes—as if that will make any difference at all to the rate of smoking. 
The basic principles of lawmaking are very often overlooked. I often say that laws should be clear they should be enforceable and they should be routinely enforced. Plenty sadly are not which is why there is a need for this legislation. The first reading of this bill is a very proud moment for the ACT Party and the Minister has worked tirelessly to get the bill to this point. As part of our confidence and supply agreement with National the Regulatory Responsibility Taskforce was put together. The drafting of this bill was the result of the work of that task force following on from the introduction of the Regulatory Responsibility Bill which was a member’s bill. 
It was interesting to hear the Labour Party contributions to debate on this bill. It seems that it is not opposed to having principles; it just does not want to do anything about promoting them. Lianne Dalziel talked a lot about her general agreement with the principles espoused in the bill which is very pleasing. She also talked about fairness though and she gave some reasons why this bill should not go to the select committee. She said it was because of fairness and because she did not want to waste Parliament’s time. When we come back to this House tomorrow it will be a members’ day which is the only opportunity that backbench MPs get to debate their issues. We will see who is most concerned about not wasting Parliament’s time then. We will see as we have seen on every members’ day since last December the filibustering that is going on to prevent one particular bill getting through Parliament. 
Charles Chauvel stood up and said he objected to a number of things. He too talked about the value of the principles but then he gave a long list of objections explaining why the bill should not proceed. It seemed to me sitting here and listening very carefully that they were mainly objections to Ministers doing exactly what should be expected of them. There is nothing wrong with expecting legislation to be fair and clear and there is nothing wrong with expecting legislation to be enforceable and routinely enforced. 
The bill itself sets clear standards that new rules and regulations will be measured against which is very important. The Minister talked about transparency and accountability which are easy words to rattle off but much harder principles to put in place. These standards spell out what good laws look like and what they should do. As lawmakers every one of us in this Chamber has the responsibility to ensure that that happens. For example laws and regulations should treat everyone equally they should be accessible and they should be easy to understand. They should not remove property rights without good reason or without compensation. They should not remove the right to appeal to the courts. 
Secondly the bill would require anyone proposing new laws or regulations to certify that their proposals met such standards. If laws do not meet those prescribed standards the person proposing the law—either a Minister or a member—would need to explain to Parliament why the law does not comply and why the legislation being proposed meets the public interest. Finally if someone believes that a new law does not meet the standards then that person will be able to go to court. The court can then issue a declaratory judgment. So there are checks and balances there is transparency and there is accountability—things that every member in this House at one time or another has stood up either here or on an election campaign stage and talked about. This bill is about putting in place those very things. 
For those who have objections to the bill I have some questions. These are questions that all people drafting a bill should have to ask themselves and are exactly what this law is putting in place. Why is this law or regulation needed? What will it achieve? What is likely to happen if the law is not put in place? What side effects might there be? Unintended consequences are something that we see all too often. Are there any alternatives and what makes this particular legislation the best option? We should ask whether anybody’s legal rights or property rights are being infringed whose they are whether they consent and most important in the issue of property rights whether they are being compensated for this loss. Does the regulation follow the principles of responsible regulatory management? And we should ask when the regulation will next be reviewed which this bill also allows for. 
When I was Minister of Consumer Affairs my major project was to look at consumer law and we ended up with the consumer law reform project. The project took seven of the 12 pieces of consumer law and is amalgamating them. When I looked at consumer law I saw two very good principles-based pieces of legislation: the Fair Trading Act and the Consumer Guarantees Act. There were also a lot of other smaller laws that had been around for a very long time. The one that was the oldest was the Auctioneers Act which was put together in 1928 and still had provisions for people tethering a horse when they went to the stock markets. It has been a very long time I think since horses have been tethered by people taking their stock to market. That Act highlights in a very simple way the principle of the importance of reviewing legislation. 
I proudly stand here today and support the Minister for Regulatory Reform in this initiative to look very carefully at the lawmaking that happens in this House the way it is gone about the need for it and what exactly should happen. We will see as a result of this bill strengthened regulatory impact statements. I frequently asked to see those at select committees when I was in Opposition and was just as frequently told that the regulatory impact statement was not ready yet. For some laws we never saw any. The bill will put in place regular reviews as I have just outlined and that too is very important. It will result as the Minister said in better discipline transparency accountability around public expenditure and much higher quality regulation—something that each and every one of us in this House should bend over backwards to put in place. Thank you very much. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora tatau e te Whare tatau kua hoki mai i uta i tai ki roto i nga pakitara o te Whare me te mohio ano hoki koinei te Wiki o te Reo Maori. Me whakanui i te ahuatanga o te reo Maori kaua mo te wiki engari he pai tonu kia aro atu ki tera o nga whakaaro i tenei wa. Heoi ano me korero Maori i te roanga o te tau kia taea ai te ki kua tangata whenua tonu te reo Maori ki Aotearoa nei. 
Ko taku noa ake ko te ki atu kei te korero tatau mo te Regulatory Standards Bill. Me penei rawa te korero kare te Pati Maori i te whakaae ake ki tenei o nga pire. Me ki atu ko te tino tikanga o tenei pire he whakatikatika he whakapai ake ko te tiketiketanga o nga whakaritenga i Aotearoa nei. He whakapapa tona he whakapapa mai ai ki tetahi o nga pire motuhake nei. Ko te ingoa o tera pire i nga tau kua hipa ko te Regulatory Responsibility Bill. I tae mai tera pire ki tenei Whare Paremata i te tau 2008 engari kare i pahi kare i eke. 
I tona hohonutanga kei te ahua whakaae atu matau ki te whainga o tenei o nga pire kia marama te ture kia tika te ture kia pono te ture. Kia taea ai e wai ranei te whai atu i te ture ki tona tiketiketanga tuatahi. Tera korero tera. 
Tuarua kia kore e pa kinotia te tangata e te ahuatanga o te ture i tona oranga i te rangatiratanga o tena o tena. Ka toru e orite ana te tangata ahakoa ko wai ki raro i te korowai o te ture. Me pera rawa te noho o te motu i raro i te korowai tatau katoa. 
Na he mama noa iho tera te korero engari tona whakatinanatanga kei reira tonu te uauatanga. Penei i te mema te kaiarahi o te Ropu ACT nei ara te Takuta Brash nei i roto i te Whare i te ahiahi nei. Koina tana e whai nei engari koinei taku e ki nei. Ko te korero mo tera korero ara ano tera engari ko tona whakatinanatanga e hoa ma kei reira tonu te uauatanga. 
No reira e toru pea etahi mea hei whakatakoto ki mua i te aroaro o te Whare Paremata i tenei wa. Me huri atu ki era o nga kaupapa i tenei wa. Tuatahi ka pataia te patai kai hea te Tiriti o Waitangi ki roto i nga whiriwhiringa o tenei o nga ture? Kei te whai mai tenei o nga pire me ki i nga tapuwae o te purongo o te Taraipiunara o Waitangi me tana purongo mo Wai 262 i puta i nga ra tata kua hipa ake nei. Ki taku mohio i roto i tera o nga purongo e mea ana kei reira tonu te tirohanga kia noho hoa haere me ki ko te Karauna raua ko te Ao Maori i roto i nga whiriwhiringa a nga tau kei mua i te aroaro. Ana kei reira tonu me ki te huarahi hei mea para ma te Karauna raua ko te Maori a nga tau kai mua i te aroaro. Ko te mate ke i roto i tenei pire kotahi anake te wahanga e korerohia ana ko tera e pa ana ki te Karauna. Kare he korero mo te ahuatanga ki te Ao Maori ara penei i taku e ki nei mo te ahuatanga o te Tiriti o Waitangi. No reira tera tera take nama tahi me ki. 
Tuarua kei roto i te hohonutanga o te pire kei reira tonu e noho taupatupatu nei. Na hei tauira ake mena ka ata titiro ki te hohonutanga o tenei pire ara mo tenei mea mo te tango rawa nei me ki ko te taking of property. Na kei roto i te pire nei kei reira tonu e mea ana a e kore e taea e wai ranei te tango te pupuri mai i nga rawa a te tangata ki te kore taua tangata e whakaae atu ka mutu ki te kore he utunga e whai nei ki taua tangata. Na reira he pai tonu tera whakaaro mena ka tangohia mai ai o rawa a tuatahi me whakaae atu tuarua mena ka pera me whai utu ano koe mo tera momo mahi. Mena ka whai tonu tatau i tera huarahi a mena ka ki tatau mena ka whakaae tatau kia orite tatau i raro i te korowai o te ture nei au e patai nei i te patai - pehea nga ahuatanga o nga kereme tiriti nga whakataunga Tiriti o Waitangi e korerohia nei e wanangahia ana? Mena ka whai tatau i tera momo ahuatanga e kua whai rawa te Ao Maori na runga i nga mahi tinihanga a te Karauna i nga tau kua hipa. No reira he take nui tera hei mea korero hei mea wananga. Ae mena kei raro tatau i te korowai o te ture kia orite te ahuatanga ahakoa ko wai a-iwi Maori nei a-tangata i tona kotahi nei. 
Na ko te take tuatoru me ki ko te ahuatanga o tenei mea o te ata wananga i te tika o te ture. Na me ki ki te wahanga e ki ana good law-making tera wahanga. Kei roto i tera wahanga e mea ana kia ata wanangatia kia watea te ture nga ture katoa kia ata wanangahia kia kitea mai ai ko wai te hunga ka whiwhi hua mai i tera ture me te hunga ka rongo nei i te ngau o tera ture ara ko te hunga kore whiwhi i etahi painga na tera ture. Me penei rawa te korero me whai wahi te tangata whenua ki te ata titiro ki te hohonutanga o tenei o nga wahanga ara kia taea e te tangata whenua te wananga i te tikanga o tena o nga wahi. I te mea tera pea kei roto i nga ture ka kitea mai ai i nga huringa whakamuri mei kore pea e kite i etahi painga o roto i nga ture i nga tau kua hipa ahakoa kei reira tonu nga he rawa o te ture. No reira kei reira tonu tera ahuatanga ara kua hangaia etahi ture i nga tau kua hipa. E hiahia ano tetahi ki te whakatika i era ture ko te mate ke kua kino kua puta mai ano etahi kino o roto i nga ture ka hangaia. No reira tera tera. 
Ka mutu ko te wahi whakamutunga ki a au ko te wahanga e ki ana e ata titiro ana ki tenei mea o te ture kia whakamatauria. Ara kei roto i te ture ka whakamatauria ko te ahuatanga o nga tikanga a te tangata kotahi. Engari karekau he paku korero o roto i te ture mo te ahuatanga o nga tikanga a-kahui tangata. Ka titiro ki te tangata kotahi kaua ki te kahui-a-tangata ara ki te kohikohinga o te iwi tera momo ahuatanga. Me titiro ano ra te Minita ki tenei take. No reira koinei nga take e toru e hei timatanga korero. Tera pea ka rongo nga taringa o te Minita Hide ki enei take. Tera pea ka whakahokia mai ai ki roto i te Whare Paremata a te wa. Mo tenei wa tonu nei kare matau i te whakaae atu ki tona hohonutanga engari ka waiho ake tera take kia tarewa mo te wa. Tera pea na te ahuatanga o te whakahokinga mai o te Minita ka aro pai ki tenei o nga ture. No reira kia ora tatau. 
[ 
Greetings to us the House we who have returned from near and far to be within the walls of the Chamber knowing full well that this is Maori Language Week. Aspects of the Maori language should be celebrated but not just for a week. That thought merits further consideration. Maori should be spoken at greater length during the year so we can say that it has become firmly embedded here in New Zealand. 
We are debating the Regulatory Standards Bill and we of the Maori Party oppose it. The main purpose of the bill is to improve the quality of regulation in New Zealand. It has a genealogy. It came out of a member’s bill called the Regulatory Responsibility Bill. That bill came before this Parliament in 2008 but was not passed and did not make it.  
In essence we agree with the general principles of the bill that the law should be clear apt and honest. But who can pursue the law to its conclusion? That is the first point. I leave that there.  
Secondly aspects of law should not adversely affect an individual in terms of their well-being and autonomy. Thirdly every person regardless of who they are is equal before the law and under its cloak. The nation all of us should exist like that under the cloak and protection of the law. 
Talking about it is the easy part. Implementing it is the hard part. It is a bit like the leader of the ACT Party Dr Brash who is in the House this afternoon. That is what he is after and that is what I am referring to. Talking about it is one thing but putting it into action is where the real difficulty is.  
Therefore there are perhaps three things to put before the House at this point. Let us turn to those matters now. Firstly the question has to be posed about where the Treaty of Waitangi was during the negotiations undertaken for this bill. The bill comes hot on the heels of the Waitangi Tribunal Wai 262 report just released in recent days. According to what I know that report states that the Treaty envisages the Crown-Maori relationship as a partnership in future negotiations. The way ahead for a Crown-Maori relationship in the future is still there. Yet the problem is that in this bill only one side is referred to and that is the Crown. There is nothing about the state of Maoridom. It is like what I have been talking about in terms of the Treaty of Waitangi perspective. So that is issue No. 1 perhaps.  
Secondly there are still debatable issues in the details of the bill. There is an interesting irony for example in the detail of measures in this bill around the taking of property. The bill suggests that property can be taken or authorised to be taken without the consent of the owner if full compensation for the taking or impairment is provided to that person. That idea is a good one if someone’s property is taken but first they must be consulted. If that happens they must be compensated for such an action taken against them. If we continue to go down that road and agree that every person is equal under the cloak of the law then I must ask the question: “What about circumstances relating to Treaty claims and Treaty settlements currently being addressed and debated?”. If the same regulatory standards applied if we followed that kind of reasoning Maoridom would be resourced to the hilt as a consequence of the Crown’s deceitful actions in years past. So that is a huge point to talk about and debate. Yes if we were indeed under the cloak of the law everyone would be equal before the law regardless of who they might be Maori people or others.  
The third issue is the matter of carefully debating the appropriateness of the law—let us say the provisions relating to good law-making. Those provisions suggest that every piece of legislation must contain a careful evaluation about who is likely to benefit and who is likely to suffer a detriment from the legislation and all the potential adverse consequences of the legislation. We urge that local Maori be involved in examining the detail of those provisions carefully to see whether any retrospective steps will be taken to address past issues that clearly fall into the category of bad law-making. That situation still exists in terms of bad laws still being made. One would like to amend those laws but the trouble is that tainted laws have led to other faults appearing in the laws being drafted. So that is that matter.  
Furthermore my conclusion concerns the provisions that look carefully at the aspect of the law to be tested. The bill makes an issue of testing legislation against the concept of individual liberty. Absent from that discussion is any notion of collective rights. The Minister must look at these issues again. These three points are just a starting point for further discussion. Perhaps Minister Hide will pay attention to these issues and in time bring this bill back to the House. For the moment we do not agree with its details and leave it hanging there. Depending on how the Minister brings the bill back we might favour it then. So greetings to us 
.] 
KATRINA SHANKS (National) 
: 
 As the Minister for Regulatory Reform mentioned earlier the main purpose of the Regulatory Standards Bill is to improve the quality of regulation in New Zealand. A key part of this Government’s plan for stronger economic growth is cutting red tape and regulations. The simple fact is that New Zealand has a problem with excessive regulation. These regulations impose real costs on our businesses and unnecessary burdens on individuals. We want to make it easier for New Zealand companies to do business to lift productivity to create jobs to boost incomes to improve living standards and to provide the world-class public services our Kiwi families deserve. National believes that better regulation and less regulation are essential to help New Zealand become more internationally competitive and a more attractive place to live and do business. We recognise that in order to allow our businesses to move ahead to grow and to develop we need to address—and remove where possible—barriers to this growth. 
The Regulatory Standards Bill attempts to provide greater transparency and accountability for the quality of laws and regulations in New Zealand. The bill has its origins in a member’s bill known as the Regulatory Responsibility Bill which Parliament’s Commerce Committee examined in 2008. The committee recommended that the member’s bill not be passed but that the Government establish a high-level expert task force to consider options for improving regulatory review and decision-making processes. The current Regulatory Standards Bill is the result of the work of this task force. 
As my colleagues have mentioned the Regulatory Standards Bill would require all proposed new laws and regulations to be assessed against a core set of accepted regulatory principles based on existing well-established guidelines. This is about improving the quality of regulation in New Zealand. The bill aims to increase the transparency of regulation making and the accountability of regulation makers. In essence the bill has three components. Firstly it provides a benchmark for good regulation through a set of regulatory principles that all regulations should comply with. Secondly it provides transparency by requiring those proposing and creating regulation to certify whether the regulation is compatible with the principles. Thirdly it provides monitoring of the certification process. 
We know that every New Zealander is affected by regulation in a number of ways. Some regulation is important. It helps us live safer lives get treated fairly protect and manage our environment have a competitive and efficient economy and much more. However regulation also has costs and can have unintended effects. That is why improving the quality of regulation is a priority for this Government. We believe that better regulation and less regulation are essential to assist New Zealand to become more internationally competitive and a more attractive place to live and do business. 
We are committed to introducing new regulation only when we are satisfied that it is required reasonable and robust. We will review existing regulation in order to identify and remove requirements that are unnecessary ineffective or excessively costly. In fact since being elected the National-led Government has begun a programme of reviews of the effectiveness of important regulatory regimes particularly those that have a significant impact on productivity. We have simplified employment law. National’s employment law package encourages employers to hire new staff reduces compliance costs and gives greater choice around holidays. The voluntary 90-day trial period has created 13000 jobs in small and medium sized businesses. We have extended this period to all employers. 
We have simplified the Resource Management Act to balance our economic opportunities with our environmental responsibilities. We have simplified building regulation. Our Better Building Blueprint is making it easier and cheaper to build good quality homes and buildings. We are amending the Building Act to encourage a “build it right first time” approach keeping builders accountable and streamlining the consent process to make it cheaper for homeowners. 
Better and less regulation has made and will continue to make New Zealand more productive and prosperous. I look forward to the Regulatory Standards Bill coming to the Commerce Committee so we can discuss how this bill can improve the quality of regulation in New Zealand. Thank you. 
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. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand and speak to the Regulatory Standards Bill. Regulations are important. They balance private interests with public interests. Regulations are important to establish how our society interacts how it coexists and how it shares its resources in a fair way which as I said enhances personal rights and opportunities without infringing on the personal rights and opportunities of others. Finding that balance is what legislative work such as this bill is about. But regulations can become outdated and become unnecessarily onerous. There are times when the construction of our legislation needs to be reviewed and there are times when we need to be looking at those regulations as well and bringing some changes to them. The Hon Rodney Hide and the Hon Phil Heatley in April this year looked at some areas of fisheries and aquaculture legislation and regulation and announced the removal of 176 unnecessary regulations from the law books. The Hon Mr Hide said that many unnecessary regulations were allowed to remain on the law books and legislation has not been updated to keep up with the times. It is important that we have these review processes. 
I particularly like the principles of responsible regulation set out in this bill and we have heard other speakers talk about these. Clause 7(1) states: “The principles of responsible regulation are that except as provided in subsection (2) legislation should—(a) be consistent with the following aspects of the rule of law: (i) the law should be clear and accessible: (ii) the law should not adversely affect rights and liberties or impose obligations retrospectively: (iii) every person is equal before the law: (iv) issues of legal right and liability should be resolved by the application of law rather than the exercise of administrative discretion:”. These principles underpin the creation of our regulations and our legislative process. They are our baselines. They are the foundation that gives boundaries and context to the regulations we create to ensure they are fit for purpose. 
The National-led Government is firmly focused on lifting New Zealand’s economic performance. Only by lifting our economic performance can we create jobs boost incomes improve living standards and provide the world-class public services that Kiwi families need. National recognises that we need to address and remove where possible barriers to growth and things that will stop our businesses moving ahead and stop them continuing to grow and to develop. We believe that better regulation and less regulation is essential to help New Zealand become internationally competitive and a more attractive place to live and to do business. We live in a very competitive world and it is very important that we do not place upon ourselves undue encumbrances of outmoded outdated and onerous regulations. This bill is moving towards the end of those sorts of unnecessary weights that hold us back and hold us down. I am very pleased to stand in support of this bill. 
RAYMOND HUO (Labour) 
: 
 I would like to start my contribution to the first reading of the Regulatory Standards Bill by quoting some thoughtful comments made by leading legal experts and relevant stakeholders. Law commissioner and former chief statutory draftsman George Tanner QC says that the bill would fail to meet the test of responsible regulatory management even based on the bill’s own principles. Auckland University’s Dean of Law Professor Paul Rishworth says that it could clog up the courts and draw officials into legal battles.  
New Zealand Herald  
commentator Brian Fallow says that the principles are abstract constitutionally unorthodox and substantively unsound. Even Treasury’s evaluation of the bill does not support it. According to Treasury there is no clear advantage over other available methods in using legislation to promote regulatory quality other than legislation being necessary to provide for the new role of courts. Further Treasury rates the potential to induce change in behaviour as low the risk of unintended outcomes as high and the potential to reduce costs as very limited. No wonder Alex Penk policy and research manager at the Maxim Institute described the bill as a wolf in sheep’s clothing. 
Labour opposes this bill. I have five main reasons for opposing this bill. The first one is that this bill changes the role of Parliament and the courts and requires certification by Ministers and chief executives. This means that the chief executives in effect certify whether they would enact a particular law. The certification regime therefore virtually puts chief executives in the position to politicise themselves and arms them to veto Government policy in a way that is inconsistent with our constitutional arrangements. Secondly the bill would be applied to new laws but after existing for 10 years it can apply to existing regulation as well. This could empower the courts to reinterpret provisions in other laws to make them consistent with the principles prescribed in this bill thus changing the original intention of Parliament when the law was enacted. Thirdly many of the principles are redundant as they are provided for in other legislation—for instance the imposition of taxes except by or under an Act which is already the case. Therefore the principles contained in this bill are ideological vague and create legal uncertainty. Fourthly this bill will create not only legal uncertainty but extra compliance costs for public entities which will now face more onerous annual reporting requirements. Finally this bill aims to fix an exaggerated problem. The regulatory impact statement states that although New Zealand lacks its own indicators of legislative quality the best international surveys available suggest that New Zealand does not have fundamental problems with legislative quality when compared with other OECD countries. 
Looking at the content the bill has three key components—firstly certification; secondly judicial declarations of incompatibility; and thirdly interpretation to ensure legislation conforms to those principles. The bill establishes a so-called benchmark for good regulation through a set of seven regulatory principles. All regulations including primary secondary and tertiary legislation excluding instruments made by local government should comply with these principles. The bill aims to provide transparency by requiring decision makers to certify whether the regulation they are proposing is compatible with the principles. Finally the bill provides a check on the certification process by allowing the courts to provide declarations of incompatibility where they believe the principles have been breached. However this power is declaratory only with no direct ability to overturn or amend the offending legislation which luckily is consistent with the separation of powers doctrine. 
I have three further concerns. The first one is that the Regulatory Responsibility Taskforce failed to justify why this bill is even necessary. There is very little evidence to show why a vigorous or intensive approach is required as opposed to the other options suggested by the Commerce Committee. Based on the calls from both National and ACT MPs there is no convincing argument as to why legislation is required to ensure better legislation. The second concern is that the bill uses open-textured language that will lead to uncertainty of meaning. According to George Tanner QC it attempts to define good lawmaking by reference to a set of simple principles and in doing so it obscures the complexities inherent in them and creates the same lack of clarity and uncertainty that it seeks to prevent. My third concern is with regard to the role of the judiciary. Sir Geoffrey Palmer pointed out in a recent article that neither judges nor the legal profession are proficient in policy analysis of the type that leads to regulatory legislative proposals. In this respect the bill actually confers on the judiciary a new role for which they are not equipped. Our already overburdened court system should not be further encumbered with overseeing regulatory legislation. 
I had the pleasure of reading a well-researched article offered by a senior lecturer at the faculty of law of Auckland University. Richard Ekins argued that this bill is unconstitutional and authorises courts to review the detail of policy illegitimately constraining Parliament and calling into question the validity of much secondary legislation. Of particular interest is clause 7(1)(b) which states that legislation should “not diminish a person’s liberty personal security freedom of choice or action or rights to own use and dispose of property except as is necessary to provide for or protect any such liberty freedom or right of another person:”. A substantial number of legislative Acts do actually diminish a person’s liberty or freedom of choice. Mr Ekins cited an Act entitled the Bakeshop Act 1896 (NY) which prohibits any person from employing another to work in a bakery for more than 10 hours per day or 60 hours per week. That Act would depart from clause 7(1)(b) of this bill for it restricts the freedom of contract of employer and employee and is not necessary to protect any existing liberty or freedom of the employee or any other person. The legislators might attempt to justify the Act by reference to the health of the worker or the need to protect him or her from economic exploitation. It would be open to the courts to consider this rationale and to decide that the legislation is an unjustifiable limit on liberty. The article went on to say: “The bill also states in paragraph (c) that legislation should ‘not take or impair … property’ unless this is necessary in the public interest; and full compensation is paid such compensation to be paid if practicable by those who benefit from the taking.” Mr Ekins argues that the principle conflates “takings” and “impairment”: “The fact is that limiting how one uses property attracts full compensation. The point of the principle is to make it very expensive to limit how property owners may act for any property owner who suffers loss from regulatory change is entitled to be made whole. Thus if Parliament wishes to ban dangerous weapons it must buy them.” 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to speak to the Regulatory Standards Bill in its first reading. New Zealand needs to lift its economic performance and on this side of the House we are firmly focused on that. Only by lifting our economic performance can we better the lot of all Kiwi residents in this country Aotearoa by creating jobs improving incomes for New Zealanders improving living standards and improving the public services that Kiwis actually deserve. This is especially so because New Zealand is a very small country. It is a small country compared with some other big countries such as the United States for example. We are at the bottom of the globe far away from many of our trading nations. Hence we are economically disadvantaged by being so far away and we need to attract and retain the talent pool that is increasingly mobile around the world. We have heard about many Kiwis leaving our shores for better jobs overseas; we need to be able to retain them. We need to attract them and retain them. 
Skills technology entrepreneurship and capital are all things we need to grow so that our economy continues to grow. New Zealand needs to grow. Although the Opposition leader seems to think that our recession actually ended in 2009 we know how difficult it has been for most New Zealanders and we need to improve the lot of New Zealanders. That is exactly what the National-led Government is doing. 
To give us a competitive edge we also need a better policy environment than can be found anywhere else in the world. Cutting red tape and regulations is an integral part of this Government’s drive for stronger economic growth making it easier for New Zealand companies to do what they do best. To help them along the Government has put in place an annual programme to clean up regulation. It has simplified a number of laws—I think it was some 170 laws—and has established a Productivity Commission. It is not just businesses that are affected by regulation; everyday New Zealanders are also affected by regulation in all areas of their lives. We want regulations to help to ensure that we all live in a safer country that we have safe lives that we get treated fairly in this country that we are all equal under one law that we protect and manage our environment so that our children can also enjoy it in the future and that we have a competitive and efficient economy that will achieve a better living standard for all Kiwis. We have already removed 170 unnecessary regulations from the law books amended more than 20 Acts of Parliament and are in the process of amending another 13 Acts. 
The work of the Productivity Commission will also lift New Zealand’s economic performance in both the public and private sectors. Established in April this year the two inquiries it will undertake are in housing affordability and international freight services. Both of these areas affect New Zealand’s international competitiveness. The commission will report back early next year and I look forward to that. 
The Regulatory Standards Bill has its origins as a member’s bill back in 2006 as previous speakers and the Minister for Regulatory Reform who introduced the bill have said. Although the Commerce Committee considered it back in 2008 it was deemed not ready to be passed in this House. I believe we should support this bill because there needs to be transparency in regulation making. The accountability that this bill promotes is what we are doing and what we do every day. I support this bill. Thank you. 
A party vote was called for on the question  
That the Regulatory Standards Bill be now read a first time. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 56 
New Zealand Labour 42; Green Party 9; Maori Party 3; Progressive 1; Independent: Carter C. 
Bill read a first time. 
Bill referred to the Commerce Committee.