The irony is hard to miss. New Zealand’s Regulatory Standards Bill, designed to ensure high-quality legislation, has itself become a case study in what happens when government rushes contentious constitutional reform without proper consultation or consensus. 

The Finance and Expenditure Committee reported back on 9 October recommending the bill proceed to second reading. It did so against the wishes of 98.7% of the 159,000 submitters who took the time to object.

This is not normal parliamentary opposition. The bill has managed what few pieces of legislation achieve: near-universal condemnation from legal experts, environmental advocates, unions, Māori authorities, professional bodies, and constitutional scholars. Even the Waitangi Tribunal found the Crown breached Treaty principles by advancing the bill without meaningful consultation. 

Yet the coalition government appears determined to proceed, setting up a collision between bare parliamentary majority and fundamental questions about how democracies should legislate on constitutional matters.

For New Zealand’s regulatory community, the stakes are both practical and existential. 

If enacted, the bill would reshape how regulation is made, reviewed, and justified – adding new obligations, creating fresh scrutiny mechanisms, and embedding a particular ideological frame into statute. 

Whether this represents progress or constraint depends largely on where one stands on the proper role of regulation in a modern democracy.

“The bill has managed what few pieces of legislation achieve: near-universal condemnation from legal experts, environmental advocates, unions, Māori authorities, professional bodies, and constitutional scholars.”

What the bill actually does

The Regulatory Standards Bill establishes statutory principles of ‘responsible regulation’ across three categories against which all government-initiated legislation must be assessed. 

Specifically, these principles span legislative design and content (rule of law, protection of liberties and property rights, taxation authority, access to courts), law-making processes (consultation, options analysis, cost-benefit assessment, implementation planning, clear drafting), and ongoing stewardship (regular review and maintenance of regulatory systems to ensure they remain effective, efficient, and fit-for-purpose).

The mechanism is transparency rather than enforcement. Agencies would prepare Consistency Accountability Statements (CAS) for new bills and specified secondary legislation, assessing whether proposals align with the principles. Where they do not, the responsible minister must make a public statement explaining why the government is proceeding despite the inconsistency and, for existing legislation, whether remedial action is planned. These statements would be published, creating a permanent record of regulatory choices and their justifications.

The bill also establishes a Regulatory Standards Board – appointed by the Governor-General on ministerial recommendation – to investigate complaints about existing regulation and review whether it meets the principles. The board could initiate its own reviews or respond to complaints from individuals and businesses. Its findings would be non-binding but public, creating political pressure through transparency. The board would also review CASs for new bills and report to select committees during the legislative process.

Finally, the bill strengthens regulatory stewardship obligations under the Public Service Act 2020. Ministers and chief executives would be required to regularly review existing regulatory systems for consistency with principles, developing plans to address identified gaps and either committing to legislative amendment within specified timeframes or obtaining ministerial justification for maintaining inconsistency.

The architecture assumes that transparency drives quality – that requiring government to explain its regulatory choices against clear principles will discipline poor decision-making and enable better parliamentary and public scrutiny. Whether that assumption holds depends on implementation, resource allocation, and political will to take the obligations seriously rather than treat them as compliance exercises.

Why this matters – and why it divides

This is New Zealand’s fourth attempt since 2006 to embed statutory principles for regulation. Previous versions in 2006, 2011, and 2021 were rejected after scrutiny or failed to gain support. The pattern suggests either admirable persistence or repeated failure to learn from criticism, depending on perspective.

The 2011 version is particularly instructive. Treasury opposed it strongly, arguing judicial involvement in assessing legislation would be constitutionally inappropriate, the principles lacked clear standards (especially around property rights), and a legislative approach was too inflexible compared with administrative mechanisms like enhanced disclosure requirements. 

The Commerce Committee shelved it after issuing interim and final reports that identified similar concerns. Constitutional scholars noted that legislation with such significance typically requires broad consensus or super-majority support – not bare majority passage.

The current bill attempts to address some technical objections. It replaces judicial declarations with an advisory board. It refines principle wording to align better with Legislation Design and Advisory Committee guidance. It phases in secondary legislation coverage rather than applying comprehensively from day one. But it retains the core approach: statutory principles, mandatory assessment, public reporting, and independent review of existing regulation.

Three concerns dominate opposition. The first is constitutional. Critics say the bill seeks to constrain future Parliaments by creating statutory expectations about how legislation should be made – a form of “meta-regulation” that embeds particular ideological preferences into law without the broad democratic mandate such changes typically require. While the principles are not legally enforceable, the obligation to justify inconsistency and subject all legislation to principles-based scrutiny represents a significant intervention in the legislative process.

The New Zealand Law Society captured this elegantly: legislation purporting to promote good law-making should not itself fail to meet basic standards of policy development. The consultation process ran over Christmas and New Year. The problem definition was vague. The options analysis compared a narrow legislative approach with doing nothing, ignoring administrative alternatives. The bill advanced despite a Waitangi Tribunal finding of Treaty breach. For a piece of legislation establishing standards for responsible regulation, the process was remarkably irresponsible.

“For a piece of legislation establishing standards for responsible regulation, the process was remarkably irresponsible.”

The second concern centres on the property rights principle. Clause 8(c) – amended by the select committee from “impairment” to “severe impairment” – states that legislation should not severely impair property except for public purpose with compensation provided (or not required if preventing unlawful activity or environmental harm). The threshold “severe impairment” remains undefined. The principle’s breadth creates uncertainty about what regulations might be captured.

Environmental groups and the Parliamentary Commissioner for the Environment worry this could make beneficial regulation prohibitively expensive. Regulations limiting land use for biodiversity protection, requiring emissions reductions, preventing pollution, or establishing marine reserves all affect property value or use. If these constitute “severe impairment” requiring compensation, government faces a choice: do not regulate, or regulate and explain the inconsistency (with attendant political cost). The commissioner noted that the principles protect private property but provide no guidance on protecting common resources like air, water, and indigenous ecosystems – a fundamental imbalance for environmental regulation.

The New Zealand Council of Trade Unions extended this concern to worker protection, public health, and climate policy. Regulations that reduce business profits through higher labour standards, food safety requirements, or emissions limits could be framed as property impairment. The principle creates an asymmetry: regulations that protect collective welfare but affect individual property rights face scrutiny and justification requirements; regulations that protect property rights face no equivalent test for their effects on collective welfare.

The third concern is the bill’s silence on Te Tiriti o Waitangi. The principles contain no reference to the Treaty or the Crown’s Treaty obligations, despite these being fundamental to New Zealand’s constitutional framework. The Waitangi Tribunal’s urgent inquiry found the Crown breached Treaty principles by failing to consult Māori before advancing legislation with constitutional significance. The Tribunal recommended pausing for genuine engagement. The government proceeded regardless.

Māori submitters characterised the bill as ongoing colonisation through institutional means. The principle that “every person is equal before law” – drawn from section 22(a) of the Constitution Act 1986 – could be used to challenge legislation designed to achieve equitable outcomes for Māori or recognise Treaty rights. The bill’s emphasis on individual liberty and property rights sits uneasily with collective rights and Crown obligations under Te Tiriti.

These are not marginal concerns from predictable opponents. The 98.7% submission opposition included medical professionals worried about public health regulation, academics concerned about constitutional precedent, former MPs from across the political spectrum, and organisations described as “highly respected” with “no particular political alignment”. When the Law Society, the Council of Trade Unions, the Parliamentary Commissioner for the Environment, the Waitangi Tribunal, and the Legislation Design and Advisory Committee all oppose legislation for overlapping reasons, dismissing their concerns as special pleading becomes harder to sustain.

What supporters see in it

The 1,191 submissions supporting the bill came primarily from business groups and individual business owners. Their case rests on transparency, accountability, and property rights protection.

The New Zealand Initiative backed the legislation as addressing longstanding regulatory quality concerns contributing to New Zealand’s productivity challenges. The Initiative argues that requiring government to explain regulatory choices against clear principles will improve decision-making and enable better parliamentary scrutiny. It recommended ensuring the board prioritises legal expertise and that government develops clear guidance on applying principles, particularly around property rights and compensation.

BusinessNZ and the Taxpayers’ Union emphasised the bill’s potential to reduce compliance costs and combat poorly designed regulations. Minister for Regulation David Seymour has described it as introducing the concept of “good lawmaking” and ensuring regulations do not impose unnecessary burdens.

The case for the bill rests on several assumptions. First, that New Zealand has a regulatory quality problem requiring statutory intervention rather than enhanced administrative mechanisms. Second, that transparency disciplines will lead to better regulation rather than compliance theatre. Third, that the benefits of systematic review of existing regulation outweigh the costs of conducting those reviews. Fourth, that the particular principles chosen represent genuine consensus about what constitutes responsible regulation rather than contested ideological preferences.

Supporters point to the bill’s emphasis on regulatory stewardship – the requirement to regularly review and maintain regulatory systems – as addressing the Productivity Commission’s concern about “set and forget” approaches where legislation becomes outdated and unfit for purpose. They argue the systematic review obligation, backed by public reporting requirements, will drive continuous improvement.

The challenge for this argument is explaining why 98.7% of submitters – including many with deep regulatory expertise – disagree that the bill will achieve its stated aims or that the benefits justify the costs and risks.

The cost question

Treasury and the Ministry for Regulation estimated the CAS regime would cost government agencies up to NZ$60 million annually (on the low end), depending on scope and implementation approach. Add costs for the board ($1 million to $1.17 million annually) and Ministry oversight ($1.1 million to $1.4 million), plus the as-yet-unknown cost of systematic reviews of existing regulation.

These costs would be managed within existing baselines, meaning agencies must find the money by reducing spending elsewhere. For regulatory agencies, the likely trade-offs are against policy development, enforcement activities, education and guidance for regulated parties, and post-implementation reviews measuring actual regulatory outcomes.

The Law Society noted the irony: resources diverted to assessing consistency with principles are resources unavailable for improving substantive regulatory quality, gathering evidence on regulatory effectiveness, or supporting compliance. If the goal is better regulation, spending $18 million to $60 million annually on principle-based compliance reporting may be less effective than investing in regulatory capability, evidence gathering, outcome evaluation, or any of the established (and often underfunded) paths to improve regulatory effectiveness.

Critics also note duplication. New Zealand already requires Regulatory Impact Statements for new policy proposals, covering problem definition, options analysis, costs and benefits, consultation, and implementation. The Attorney-General already vets bills for consistency with the New Zealand Bill of Rights Act 1990. The Legislation Design and Advisory Committee already provides guidance on good legislative design. The Regulations Review Committee already scrutinises secondary legislation. Disclosure statements under the Legislation Act 2019 already flag issues like retrospectivity and strict liability offences.

The CAS would add another layer focused specifically on consistency with statutory principles. Whether this adds genuine value or creates compliance burden depends on whether the principles capture something the existing mechanisms miss, and whether the transparency created by CAS changes behaviour in ways that improve regulatory quality.

Treasury’s 2011 opposition to an earlier version recommended enhancing existing disclosure mechanisms rather than creating new statutory principles. The advice went unheeded.

What it means for regulators

If the bill passes, regulatory agencies face three categories of new obligations. 

First, documentation and reporting requirements. Every new bill and specified secondary legislation must be accompanied by a CAS assessing alignment with all nine principles. Where inconsistency is identified, agencies must prepare ministerial justification statements. Both must be published when legislation is introduced or regulations made.

This work must be integrated with Regulatory Impact Statement preparation, Legislation Design and Advisory Committee consultation, New Zealand Bill of Rights Act vetting, and disclosure statement completion. The coordination challenge is substantial. Different parts of this process operate on different timelines, involve different central agencies, and assess different dimensions of regulatory quality. Bringing them together coherently while meeting legislative deadlines requires careful project management and early engagement.

Second, systematic review obligations. Agencies must develop plans for reviewing existing regulatory systems against the principles, conduct reviews on a regular cycle, identify inconsistencies, and either commit to legislative amendment or obtain ministerial justification for maintaining inconsistency. Reviews must be published.

The challenge here is prioritisation. Most agencies administer multiple Acts and numerous sets of regulations. Meaningful review requires gathering evidence on system performance, stakeholder impacts, costs and benefits, and implementation effectiveness – substantial analytical work beyond current stewardship reporting. With limited resources (and baseline funding constrained by the cost of the CAS regime itself), agencies must decide which systems to review first, how thoroughly to review them, and what level of evidence is sufficient to assess consistency with principles.

Third, engagement with the Regulatory Standards Board. When the board reviews agency-administered regulation or investigates complaints, agencies must provide information, consider findings, and respond publicly. Even though board recommendations are non-binding, public reports create reputational and political pressure. Agencies unprepared to defend regulatory design against principle-based critique risk becoming case studies in regulatory failure.

These obligations demand capabilities many agencies may not currently possess at depth: Cost-benefit analysis expertise for assessing the “net benefit” principle. Legal expertise for assessing property rights implications and compensation requirements. Economic analysis for valuing property impacts. Consultation and stakeholder engagement skills. Performance measurement for stewardship reviews. Yes, the Ministry for Regulation has responsibility for building regulatory workforce capability, but agencies will need to invest in staff development while simultaneously implementing new requirements. That will be challenging and costly.

Also, the risk of box-ticking compliance is real. When resources are tight and obligations mount, the temptation to produce formulaic CASs that technically meet requirements without providing substantive analysis is strong. If the bill becomes an exercise in compliance rather than genuine improvement, it will have failed its own stated aims – making the Law Society’s point about misconceived design empirically demonstrable.

How New Zealand diverges

Most comparable jurisdictions use administrative frameworks rather than statutory principles for regulatory quality oversight. The United Kingdom’s Better Regulation Framework operates through Cabinet Office coordination, regulatory impact assessment for measures with significant business impact, and independent scrutiny by the Regulatory Policy Committee. The principles – transparent, accountable, proportionate, consistent, targeted – guide administrative practice but are not statutory obligations. Post-Brexit, the UK has moved toward greater regulatory flexibility and discretion for regulators to adapt rules without legislation.

Australia’s federal and state governments operate Regulatory Impact Statement systems based on Council of Australian Governments principles. The federal Office of Impact Analysis provides independent advice on whether RIS systems are adequate. But the system is administrative – Cabinet requirements and state-level mandates, not statutory principles. The focus is on evidence-based policy analysis, consultation, and proportionality rather than constitutional principles or property rights.

The OECD’s indicators of regulatory policy and governance show New Zealand scores well on ex ante impact assessment but poorly on ex post evaluation of existing regulation. The international trend is toward strengthening outcome-based evaluation – measuring whether regulations achieve intended results and adapting them based on evidence. New Zealand’s bill takes a different approach: principle-based consistency assessment focused on process and design rather than outcomes.

New Zealand’s regulatory stewardship model – viewing regulation as an asset requiring ongoing care and maintenance – is internationally recognised as promising. But the bill risks over-formalising what works best as culture and practice. The requirement for systematic review against statutory principles is more rigid than the adaptive stewardship approach agencies have been developing.

Canada and the United States operate regulatory oversight through central review bodies (Treasury Board Secretariat and Office of Information and Regulatory Affairs respectively) with emphasis on cost-benefit analysis, small business impacts, and performance measurement. But these operate within executive branch authority, not as statutory constraints on legislative content.

New Zealand’s approach, if enacted, would be internationally distinctive – embedding contested constitutional and economic principles into statute, creating an independent board to review existing regulation against those principles, and requiring public justification for any inconsistency. Does this represent innovation or isolation? That depends on whether the model produces better regulatory outcomes than the administrative approaches used elsewhere. The burden of proof should rest with those proposing the divergence.

What happens next

The bill awaits second reading debate, likely in late 2025 or early 2026. The coalition government holds the votes to pass it through all remaining stages: second reading, Committee of the Whole House for clause-by-clause consideration, and third reading before Royal Assent. Opposition parties lack the numbers to stop it.

The select committee made eight amendments, the most significant shifting board appointments from the minister to the Governor-General (acting on ministerial recommendation) and raising the property rights threshold from “impairment” to “severe impairment.” These changes address peripheral concerns without touching the fundamental objections about constitutional appropriateness, Treaty obligations, ideological foundations, cost-effectiveness, or duplication of existing mechanisms.

If enacted, most provisions would commence on Royal Assent, but the board and CAS requirements would begin on a date set by Order in Council within six months. This gives agencies a window to prepare systems, develop guidance, build capability, and establish processes for integrating CAS preparation with other regulatory development requirements.

The regulatory community faces a choice. Agencies can comply minimally, treating CAS as box-ticking exercises and systematic reviews as light-touch audits that meet the letter of obligation without investing in substantive analysis. This approach protects resources but ensures the bill fails to improve regulatory quality, proving critics correct about compliance burden without benefit.

Alternatively, agencies can use the framework constructively – treating principle-based assessment as an opportunity to strengthen analytical rigour, improve stakeholder engagement, and drive genuine review of outdated regulation. This approach requires investment, cultural change, and sustained leadership commitment. It also requires believing the principles represent meaningful standards for regulatory quality rather than contested ideological preferences.

The broader question is whether legislation with this level of opposition – again, 98.7% of 159,000 submissions, including the Waitangi Tribunal, Law Society, and Parliamentary Commissioner for the Environment – can proceed legitimately on constitutional matters. Parliamentary sovereignty means the majority can pass what it wishes. But Westminster systems typically require broad consensus for changes affecting how Parliament operates or fundamental rights.

“Parliamentary sovereignty means the majority can pass what it wishes. But Westminster systems typically require broad consensus for changes affecting how Parliament operates or fundamental rights.”

The government’s argument appears to be that the principles are sensible, transparency is valuable, and systematic review is overdue – so opposition must stem from misunderstanding or vested interests defending poor regulation. The opposition’s argument is that the bill embeds contested ideological assumptions, constrains future Parliaments inappropriately, breaches Treaty obligations, duplicates existing mechanisms, and diverts resources from substantive regulatory improvement.

Which view prevails matters less than whether the bill achieves its stated aims if enacted. Transparency only improves quality if the obligations are taken seriously, adequately resourced, and integrated into genuine regulatory improvement efforts. Otherwise, New Zealand will have legislated an expensive compliance regime that makes regulation more cumbersome without making it better – an outcome that would unite supporters and critics in disappointment, if for different reasons.

Stakes extend beyond process

The Regulatory Standards Bill represents a fundamental disagreement about what regulation is for. One view sees regulation primarily as potential constraint on individual liberty and property rights, requiring justification and discipline through transparency mechanisms that make the costs of regulating visible and politically costly. Another view sees regulation as essential collective action to protect public health, environmental quality, worker rights, and equitable outcomes – goals that require flexibility and political space to act without excessive procedural hurdles or compensation obligations.

These are not technical disagreements about optimal institutional design. They are substantive disagreements about the proper balance between individual rights and collective welfare, the role of property rights in democratic decision-making, and whether regulation represents a necessary response to market failures and power imbalances or a threat to freedom requiring constraint.

The bill’s libertarian foundations – traceable to a 2001 Business Roundtable paper by economist Bryce Wilkinson that inspired the first Regulatory Responsibility Bill – are not hidden. The emphasis on property rights, individual liberty, cost-benefit analysis, and minimal government intervention reflects a particular economic and political philosophy. That philosophy is legitimate and has adherents. But embedding it into statutory principles that future Parliaments must either comply with or justify departing from is a different matter than advancing it through policy advocacy or electoral mandate.

The test of the bill’s legitimacy is not whether supporters can muster 61 votes in a 122-seat Parliament. It is whether legislation with constitutional significance should proceed with bare majority support against near-universal expert opposition. The precedent matters. If this bill passes despite 98.7% opposition and without addressing fundamental concerns about Treaty obligations, constitutional appropriateness, and resource allocation, what prevents future governments from embedding their own contested ideological preferences into statutory frameworks with similar disregard for consensus?

Practically, the bill adds obligations, costs, and scrutiny mechanisms that will reshape daily work. Existentially, it represents a view of regulation as presumptively suspect, requiring constant justification and vulnerable to challenge on property rights grounds – a shift from regulation as legitimate public interest governance to regulation as necessary evil requiring constraint.

Whether that shift proves constructive or corrosive depends on implementation, resourcing, and political will to make the framework serve regulatory improvement rather than regulatory paralysis. The community will implement whatever Parliament passes. But the legitimacy questions will not disappear with Royal Assent, and the test of the bill’s value will be whether New Zealand’s regulatory system emerges stronger or merely more encumbered.

Also read: Regulatory Standards Bill advances despite record opposition