Max Harris submission on the Regulatory Standards Bill 2025
A guest post sharing Max Harris' submission on the RSB
Regulatory Standards Bill Select Committee Submission – Max Harris
The Regulatory Standards Bill is far-reaching and dangerous. It aims to smuggle in – alongside uncontroversial principles – libertarian principles that ultimately seek to protect corporate profit, boost individual private property, and ‘chill’ legislatures away from regulating in the public interest. It enacts constitutional change without accompanying appropriate process. This submission outlines why the Bill reflects a damaging and antisocial worldview, but also engages more closely with the detail of the proposed legislation. The Bill should be opposed. Any responsible lawmakers should not allow it to pass.
Regulation is important for protecting the public interest
To regulate is to bring order or control to something. When we ‘regulate’ our breath we bring some order and control to our breath. Regulation is law-making that in particular seeks to set boundaries for what can be done, especially by individuals and companies acting in ways that might negatively affect others.
Regulation is so often the invisible stitching that holds together our social fabric and allows the public to be protected. When we wake up in the morning and eat breakfast, trusting that food is safe to eat, that is in part because of sound regulation. When we leave our houses, and travel on the roads – in cars or in public transport – we trust that we can be safe because of regulation that coordinates rules of travel and speed limits. If we work in workplaces, we trust that we will be kept safe because of workplace safety regulation.
These are just some examples. In many of these areas there are good reasons to say New Zealand does not have enough regulation. Workplace safety regulation is being weakened by the current government. New Zealand has experienced a major mine explosion, a leaky buildings crisis, and significant financial scandals in which under-regulation has been cited as an underlying contributor to human suffering and sometimes the loss of human life.
The Regulatory Standards Bill is underpinned by a libertarian ideology that should be understood in order to grasp the Bill’s ultimate aims
Legislative draftspeople and legal analysts are encouraged to take a cold, technical approach to words in draft legislation. But words must always be read in context, including the underlying ideological drivers of legislation’s architects. A central ideological driver of the Regulatory Standards Bill is libertarianism, the guiding ideology of the New Zealand ACT Party.
Libertarian ideology – in the work of Friedrich von Hayek, Milton Friedman, and others – has long sought to find ways to use the law to limit government spending, balance budgets, reduce regulation, and cut progressive taxes. Libertarians believe that government intervention in the economy must be minimised.
In practice, this is an ideology that – when enacted – has preserved and boosted the wealth and power of a small group of people.
The hostility to government regulation is extreme. Milton Friedman notoriously opposed regulation to require the wearing of seatbelts as well as regulation requiring the wearing of bicycle helmets.[1]
It is important to bear in mind that Milton Friedman sought to elevate libertarian principles to the level attained by human rights, by establishing an economic constitution.[2] It is helpful for understanding the Regulatory Standards Bill’s interventions to recall this overarching goal.
This Bill must be regarded as an attempt to lock-in libertarian ideology. (This has, on occasion, been done before: for example the locking-in of a balanced budget requirement in s 100 of the Local Government Act 2002 through a 2010 amendment.) It is an attempt to boost the twin goals of profit and property. That is an ideology that I do not consider is supported by a majority of people in New Zealand. The enactment of such ideology would have deeply antisocial effects and detrimental consequences for public health, workplace safety, and environmental protection, among other things.
The problem that the Bill claims to address is not well-substantiated and has been misleadingly framed
The Bill claims to be concerned with improving the quality of regulation. But the architects of the Bill have failed to provide evidence that New Zealand’s regulatory quality is particularly low. Indeed, the evidence suggests the contrary: that New Zealand has strong tools for ensuring the quality of regulation.[3]
The same Government that is supporting this Bill has also pressed ahead with the re-regulation of pay equity and attempts to regulate the use of Treaty principles, and undertaken other policy and legislative changes, that have showed a flagrant disregard for the very principles that the Bill purports to uphold (including the independence of the judiciary and the importance of consulting the people materially affected by legislation). This leaves any reasonable observer questioning how much the purported objectives of this Bill should be accepted as being pursued in good faith.
It is not an outlandish conclusion that this Bill is not really seeking to uphold standards of regulation, as its title suggests. Instead, it is attempting to make it harder for a government to regulate, because the Bill’s architects consider that regulation is a threat to the liberties and powers of individuals and corporations. That is a jaundiced view of regulation that, if pursued, could do great damage to the public good.
The Bill’s four main interventions: “principles of responsible regulation”, pre-legislative controls on legislation, a Regulatory Standards Board, and new statutory powers for the Regulation Ministry
The Bill, in cl 8, sets out “principles of responsible regulation”. Some of these sound uncontroversial but require closer reading. On closer reading it is clear that these principles introduce new ideas that prioritise property, the individual, and a particular worldview.
A narrow conception of the rule of law is set out in cl 8(a): only one view of the rule of law.[4] Under ‘Liberties’, particular mention is made of “rights to own, use, and dispose of property”; New Zealand law has up to this point decided not to give such express protection to property (which also does not feature in the main international human rights instruments). In addition to this reference, there is a ‘property takings clause’ suggesting that legislation should not impair property without consent of the owner without good justification, fair compensation, and compensation from government (or the party benefiting from the impairment). New Zealand has not opted for this kind of protection in the past, in part because of the risk that it could be weaponised by corporations to prevent regulation in the public interest (for example, to protect the environment in a way that limits protfit). The ‘Taxes, fees, and levies’ provisions aims to make it more difficult to impose fees and levies by setting out a rigorous cost-benefit analysis that should accompany their introduction; this plainly is an attempt to handcuff governments in their attempts to introduce taxation. ‘Good law-making’ also sounds like a precept that all would support, but the provisions underneath this heading discourage legislation by imposing a structured test for when legislation is justified.
Pre-legislative controls are introduced from cl 9 onwards, using these so-called principles of responsible regulation. A “consistency accountability statement” and a ministerial statement is required to assess all legislation against the benchmark of these regulations. There are some selective (and not well justified) exemptions. Even government amendments must be subject to the so-called responsible regulations principles. This therefore gives the Bill’s principles greater weight and status than the rights and freedoms in the New Zealand Bill of Rights Act 1990: s 7 reports under the Bill of Rights assess legislation against human rights, but amendments do not need to be considered in light of human rights.
Ongoing reviews are required to assess legislation against these responsible regulation principles from cl 17 onwards. These are plainly efforts to ‘constitutionalise’ principles pertaining to property and regulatory takings, among others.
Clauses 23-25 are self-evidently efforts to limit the far-reaching effects of the legislation: these insist on chief executives’ independence, the fact that the Act does not confer or impose legal rights or obligations (except in relation to Part 3), and the fact that legislation cannot be made invalid by non-compliance. But there may well be legal disputes about how these provisions relate to the remainder of the legislation.
Subpart 7 sets up the Regulatory Standards Board: the third main intervention of the Act. This does appear to parallel the Human Rights Commission but gives more power to the Minister to steer the direction of the Board, which is not in any sense at arm’s-length from the Minister. The Board under cl 29 can undertake roving inquiries into existing legislation and can receive complaints in light of responsible regulation principles (cl 32). Oddly, the board cannot assess legislation against the principle in s 8(i) (consultation). The board is appointed by the regulatory standards Minister, David Seymour: cl 38. It does appear that the board will function as an inhouse thinktank, allowing the ACT Party in government to generate controversy or concern around any past legislation and existing policy about which it seeks to foment disagreement and consternation.
The fourth intervention in the Bill is to introduce a suite of new statutory powers in Part 3 for the chief executive of the regulatory standards Ministry to require information to be supplied by other public service agencies for various broad purposes. This gives heightened power to the Ministry for Regulation, and will obstruct the work of other public service agencies, consuming considerable time and resources. It is not clear that htis Part 3 responds to any identified, well-substantiated problem.
Process
The Bill has constitutional effects. It aims to elevate the status of certain core principles. It creates new entities and powers.
But the process of passing the Bill has lacked what would be expected in constitutional change of this kind. No widespread consultation has been done. No consultation of Māori has occurred. The Waitangi Tribunal has slammed the Bill for its failure to comply with the principles of Te Tiriti o Waitangi. Significant opposition has built because of concern for the Bill. No super-majority is being required to pass this Bill in Parliament.
The very principles that the Bill purports to safeguard are being compromised by the passage of the Bill itself. That inconsistency and rank hypocrisy once again raises questions about the real purpose of, and agenda behind, the Bill.
Recommendations
The Bill should be discarded. Those opposing the Bill should commit to its repeal as soon as they are in government. For any members of the government with remaining concerns about the Bill’s content, it would appear open to those members to conclude that the Bill has departed so significantly from the wording of the ACT-National Coalition Agreement so as to require reconsideration of support for the Bill.
There are lots of ways to encourage regulatory standards to be upheld (including an expanded role for the Law Commission or through guidelines and other mechanisms, suggested by the Ministry for Regulation). The Bill does not do what it claims to do. It is an attempt to cement a fringe, individualistic ideology that will make governing in the public interest harder. Those involved with supporting the Bill should think hard before lending it their support. I am of the view that those who support the Bill will come to regret such support, and have aimed to set out above the likely reasons for such regret.
[1] See
.
[2] See Milton Friedman, Free to Choose: A Personal Statement; available online at https://periferiaactiva.wordpress.com/wp-content/uploads/2019/07/free-to-choose_-a-personal-statement.pdf.
[3] See https://data.worldbank.org/indicator/RQ.PER.RNK.
[4] See, for example, the work of Paul Craig on a broader more substantive conception of the rule of law.