The Regulatory Standards Bill
Last week, the coalition Government's Regulatory Standards Bill (Bill) was introduced to Parliament. The Bill had its first reading on Friday afternoon under urgency, and is now before the Finance and Expenditure Committee.
The Bill is a key element of the coalition Government's reforms intended to "slash red tape" and reduce the amount of unnecessary and poor-quality regulation, with the ultimate goal of lifting productivity and wages in New Zealand.
This Bill represents the latest step in a lengthy battle by the ACT Party to codify principles for good lawmaking and economic efficiency. A similar bill was first introduced in 2006 as a Member's bill (which failed at the Select Committee stage but resulted in the establishment of the Regulatory Responsibility Taskforce in 2009), followed by further bills that were introduced but failed to progress in 2011 and 2021. The Bill has the same general scheme and is largely based on the 2011 and 2021 versions, albeit with some changes. Some of these changes reduce the scope or strength of the Bill, while others appear to expand it. For example, the current iteration no longer proposes empowering the courts with a new declaratory role but instead seeks to establish an independent statutory board with the power to scrutinise both existing and proposed legislation.
Despite considerable public backlash to the Bill during the initial consultation process, it is likely to pass this time around, with the National-ACT Coalition Agreement recording the commitment to pass the Bill "as soon as practicable". As currently drafted, the Bill would be completely in force by 1 July 2026.
Purpose of the Bill
The Bill aims to promote Executive accountability in developing high-quality legislation and exercising regulatory stewardship. It also aims to support Parliament's ability to scrutinise Bills and delegated legislation. The Bill would meet these objectives through:
- establishing a set of "principles of responsible regulation" (Principles) that serve as benchmarking thresholds for good legislation;
- introducing "consistency accountability statements" (CAS) which create a transparency assessment of a piece of legislation's consistency with the Principles;
- establishing a Regulatory Standards Board to independently consider the consistency of proposed and existing legislation; and
- strengthening regulatory quality by supporting the Minister for Regulation in its regulatory oversight role.
The "principles of responsible regulation"
In broad terms, the proposed Principles would cover:
- the rule of law - the importance of maintaining consistency with various aspects of the rule of law;
- liberties - legislation should not unduly diminish a person’s liberty, personal security, freedom of choice or action, or various property rights, except as is necessary to provide for, or protect, any such liberty, freedom, or right of another person;
- taking of property - legislation should not take or impair property without the owner’s consent unless there is good justification and fair compensation;
- taxes, fees and levies – the importance of maintaining Parliamentary control of public finance, and imposing proportionate and reasonable fees and levies;
- the role of courts - legislation should preserve the courts’ constitutional role of ascertaining the meaning of legislation, and should only make rights and liberties dependent on administrative power where the power is sufficiently defined and reviewable; and
- good law-making - legislation should be expected to produce benefits that exceed the costs of the legislation to the public or persons and should be the most effective, efficient, and proportionate response to the issue concerned that is available.
The breadth of these Principles may spark concerns for some however, these Principles largely reflect constitutional principles that legislation is likely to already align with, and regardless, the Principles are not enforceable in court in the event of inconsistent legislation. Failure to comply with the Bill would not affect any power to make any legislation, nor the validity or operation of any legislation.
Transparent assessment of legislation's consistency with relevant Principles
The Bill provides that both proposed and existing legislation (including both primary and secondary legislation) would need to be assessed for consistency with the Principles by responsible Ministers, administering agencies, and other makers of legislation.
When new Government bills are introduced to the House, the Bill would require the explanatory note to include (or link to) a CAS, as well as a statement from the responsible Minister explaining the reason for any inconsistency with the Principles. This requirement would be subject to several exceptions, including that it does not apply to various bills (i.e. Statutes Amendment Bills and Treaty Settlement Bills, amongst others).
For the review of existing legislation, a responsible agency for legislation would be required to develop plans for a regular review of its legislation to assess consistency with the Principles and publish reports for its progress under those plans. This requirement would be subject to a number of exceptions, especially in relation to secondary legislation.
Mechanism for complaints
The Bill also intends to establish the Regulatory Standards Board (Board), the members of which would be appointed by the Minister for Regulation. The functions of this statutory Board would be to:
- independently assess consistency of legislation with the Principles;
- help incentivise Ministers and agencies to create robust CASs;
- carry out inquiries following a complaint of inconsistency, at the request of the Minister or on its own accord; and
- make non-binding recommendations.
In doing so, the Board would assess consistency either by looking to the CAS of Bills introduced to the House of Representatives and providing a Select Committee with its finding or carrying out its own inquiry into the consistency of existing legislation and reporting its findings to the Minister for Regulation and the responsible Minister.
Strengthening of regulatory quality
The Bill also intends to strengthen regulatory oversight by supporting the Ministry for Regulation in its oversight role and requiring the Ministry to report on the overall state of the regulatory management system.
Consultation on the Bill
The Bill's introduction follows a two-month consultation period on the proposed Bill, which took place from 19 November 2024 to 13 January 2025. This consultation attracted wide-spread attention, with the Ministry for Regulation receiving approximately 23,000 submissions. Of the submissions received, approximately 88% opposed the proposed Bill, and only 0.33% supported or partially supported it (with the remaining 12% not indicating a clear position).
Common reasons for submitters' opposition to the Bill included:
- a lack of clearly-defined problem that the Bill aims to address, the creation of duplicate legislation review mechanisms, and increasing complexity in lawmaking;
- that the Bill would undermine future Parliaments and democracy;
- lack of recognition of Treaty of Waitangi / Tiriti o Waitangi rights and interests; and
- concerns around the Bill's social, environmental and economic outcomes.
Reasons for support included that the Bill would reduce the likelihood of overregulation, improve certainty and quality of regulation, and ensure legislation remains fit for purpose over time. See the Ministry's full report on the submissions here.
Next steps
The Finance and Expenditure Committee has now called for public submissions on the Bill. Submissions close at 1pm on 23 June 2025.
For more information on the Bill and consultation process, see our previous Insight here. Please contact one of our experts below if you would like to discuss the potential impact of the Bill and what this may mean for you.