NZ health and safety reform: Big businesses warn ‘blue tape’ will replace Government’s ‘red tape’ cuts
Tuesday, 31 March 2026
Big businesses have warned the Government that if they go ahead with plans to remove health and safety “red tape” from small businesses, they will only replace it with “blue tape” in their contracts.
Workplace relations and safety minister Brooke van Velden is overseeing health and safety law reforms with the key objective of reducing compliance costs for small businesses.
But big businesses have lined up to protest one part of her Health and Safety at Work Amendment Bill. That’s the part which would require businesses with fewer than 20 staff to focus only on “critical risks” likely to result in a death, a notifiable injury, illness or incident or one of the 50 occupational diseases listed in a schedule to ACC legislation.
That would see small businesses’ duties to manage sub-critical risks to worker safety removed from law.
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However, big businesses including Woolworths, Downer NZ and Ports of Auckland have written to the Government to say they would not tolerate two-tier health and safety on their sites.
And to avoid that happening, they have signalled they would use their contracts with small businesses to require them to carry on managing non-critical health and safety issues even if the law changes.
Several referred to these contracts as “blue tape”.
The bill was the subject of a hearing by the Workplace and Education Select Committee on Monday, but written submissions were published on Parliament’s website late last week.
Downer NZ, which builds and manages critical transport and other infrastructure, told the Government: “We cannot support the bill’s intent to reduce duties for small business as it is inequitable, ignores realities of modern workplaces and contractual relationships and may lead to increases in rates of harm and ACC costs.”
It said it would use “contractual arrangements” to ensure that there was only one set of health and safety standards operating on its work sites.
Safety expert Steffan Cavill-Fowler said the Government’s intent to reduce the compliance burden would be “made moot by the market”.
“In industries where large ‘lead contractors’ engage smaller firms, the lead contractor will continue to demand full HSWA [Health and Safety at Work Act] compliance through procurement contracts to protect their own legal standing,” he said.
Ports of Auckland, which had more than 700 separate businesses on its site on a regular basis, signalled it would do the same, telling the Government that carving out duties for small businesses would create complexity, and was “unlikely to deliver any safety benefit or reduced cost of compliance”.
Energy Resources Aotearoa, a lobbying association for the oil and gas industry, told MPs it expected its members to impose full health and safety risk management by contractual controls, audits and verifications on small contractors.
Woolworths said it would do the same, and indicated this would increase, not decrease, costs for both it, and the small businesses it deals with.
“The small PCBU carve-out will create friction and confusion as many large PCBUs will feel obliged to impose additional prequalification and engagement requirements on small contractors to fill the regulatory gap, increasing, not decreasing, administrative burdens on both,” the supermarket giant said.
Small business groups, including Business Canterbury support the Government’s plans.
“A clearer, more proportionate framework enables small businesses to focus on managing critical risks in a practical and effective way, rather than being consumed by compliance activity that adds little safety value.”
Some submitters told the Government it would be better having health and safety regulators provide more and clearer guidance on how small businesses could meet current safety standards, if it wanted to reduce compliance costs and reduce confusion.
Labour and the Green Party oppose the changes, saying workers of all businesses deserve the same health and safety protection.