Parliament versus Executive: Regs Review and the Regulatory Standards Bill

Analysis - Parliament recently heard a single week of public submissions on David Seymour's Regulatory Standards Bill. The submissions were seldom complimentary.

The Finance and Expenditure Committee is considering that bill, but this week a different select committee heard briefings of its own on issues that arise from the bill, because the bill's aims seem in conflict with the purpose of the Regulations Review Committee - even its existence.

The Regulatory Standards Bill's own description lists its aims as being to:

• promote the accountability of the Executive to Parliament for developing high-quality legislation and exercising stewardship over regulatory systems; and
• support Parliament's ability to scrutinise Bills; and
• support Parliament in overseeing and controlling the use of delegated powers to make legislation.

That may sound good on paper, but the bill does not create or support parliamentary bodies to keep a check on the Executive. Instead, the bill creates an external board which works under the Executive.

Parliament already has a committee tasked with the express job of evaluating regulations, including hearing public complaints - the Regulations Review Committee.

Regs Review, as it is commonly described, is traditionally one of Parliament's most cross-party, collaborative committees. It is usually chaired by a senior opposition MP; currently that chair is Labour MP Arena Williams.

Among the committee's briefings on the bill this week was a public briefing from former Prime Minister Sir Geoffrey Palmer. Because it was public, this article uses that discussion to help outline the reason the Regs Review Committee is concerned enough to ask for briefings on a bill being considered by a different committee.

Williams outlined one purpose to the former prime minister thus: "I would like to progress usefully for the Standing Orders Committee, what the role of the Regulations Review Committee is now."

Note: The Standing Orders Committee is the body that considers changes to Parliament's rules. If the Regulatory Standards Bill is passed, the Standing Orders Committee will likely need to adjust Parliament's rules to try and make it all fit.

Background to Regulations and Regs Review

It was Geoffrey Palmer's parliamentary reforms in the 1980s that created the Regulations Review Committee and gave it the job of fixing regulations, with the power to ask Parliament to disallow (ie. kill) bad regulation.

Earlier this year the current committee asked the House to do exactly that to a regulation regarding law school curricula - and the House agreed. More often though, the committee asks ministers to fix poor regulation, and is successful in doing so.

This role clashes with aspects of Seymour's new bill, which would empower its own non-parliamentary board to review regulations - a board appointed by the minister for regulation and working together with their Ministry for Regulation.

Sir Geoffrey provided background to the Regs Review Committee's creation in the 1980s. It was part of a response to a period of government under Robert Muldoon when New Zealand was often governed by executive decree, without much reference to Parliament, in spite of the fact that Parliaments - not governments - have supremacy. Sir Geoffrey listed a few former laws that gave ministers vast powers.

"The Economic Stabilisation Act, the Commerce Amendment Act of 1979, the National Development Act that allowed you to develop New Zealand by Order in Council, and not by Parliament. These were very grave exercises of executive power, and that led to the repeal of all those statutes. And it also led to the setting up of this committee."

The Economic Stabilisation Act from 1948 for example, was used by Robert Muldoon's National Party government in the 1970s and 1980s to freeze wages and prices across the entire country, and to determine interest rates. As one response to the 1970s oil shock, people were forced to choose a day they could not drive their cars. That was all done without reference to Parliament.

Despite his own government's repeal of such broad powers, Sir Geoffrey argued that regulation is not inherently bad, but is necessary.

"You cannot run a country on the basis of primary legislation alone. It is not possible. And the ministers have to be able to have the ability to have administrative arrangements that are within the competence of the enabling provisions in the primary act that allows detail to be dealt with."

Ministers need to be able to act without constant reference to the boss. Many powers are necessarily delegated to a minister or a ministry. That delegated authority is enabled by primary legislation (statute law), and is referred to as secondary legislation - mostly it is regulation.

Imagine if no authority was delegated. How would that look? Maybe you couldn't get a new passport until your name had been included in legislation, or your passport was approved by the governor-general. Every price change for a government service (eg. a DOC campsite), and every new-build classroom would need specific approval. That all sounds ridiculous, but power is delegated, and without delegation things must be confirmed at the centre of power..

"The enthusiasm for terrific deregulation makes me nervous," Sir Geoffrey told the committee. "I don't quite know where that desire comes from, because the evidence has not been put in front of this Parliament. It's asserted, but it's not generated as evidence anywhere that I have seen."

The double-up

Putting aside other criticism of the Regulatory Standards Bill, what exactly is the issue for the Regulations Review Committee? Sir Geoffrey noted one glaring issue:

"There was nothing said about the Regulations Review Committee in the legislation, or indeed, as far as I can see in any of the consideration that led to the drafting of this ill-considered bill."

That is a monumental oversight, or possibly a snub, because the job of the Regs Review Committee and that of the Board that the bill creates will, at best, overlap. They may clash terribly. It's like a second referee being sent onto the field during a game - a referee that answers to someone different, and one with a vested interest.

"The conduct of this Parliament," Sir Geoffrey said, "already pretty unsatisfactory in many points of view, is going to get a whole lot worse when you have these confusing areas of responsibility that don't fit."

Green MP Lawrence Xu-Nan asked the former prime minister which group would have supremacy if they both tried to consider the same regulation - board or committee?

"The Regulatory Standards Board is a creature of the minister, and it is not a creature of Parliament. This committee is a creature of Parliament."

Only one of those creatures has the power to ask Parliament to strike out bad regulation. Sir Geoffrey indicated that was everything you needed to know. In other words, since Parliament has supremacy over the Executive, Parliament's Regulations Review Committee would have supremacy over the Executive's proposed Regulatory Standards Board.

Sir Geoffrey argued that the bill ought to be amended to have no role in secondary legislation at all. He also had advice for the committee and for its backbencher colleagues.

"If you are left alone, that would be good; but what you need to do is to be more muscular. …The bad habits of New Zealand legislation have been somewhat restricted by the activities of this committee, but not enough. The bipartisan thing that is necessary to make the committee work properly needs to extend to backbenchers from the governing parties feeling that they can exercise their judgement without fear or favour."

He suggests that non-executive MPs-regardless of their political affiliation-ought to do their jobs as parliamentarians, not as voting automatons without a role in keeping a check on governments.

* RNZ's The House, with insights into Parliament, legislation and issues, is made with funding from Parliament's Office of the Clerk. Enjoy our articles or podcast at RNZ.

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