Why the Regulatory Standards Bill is dangerous to New Zealand’s democracy

Monday, 14 July 2025

“This bill strikes at the heart of how Parliament exercises its responsibility to make law,” writes Sir Geoffrey Palmer.

Sir Geoffrey Palmer KC is a distinguished fellow of the faculty of law at Victoria University of Wellington, and a former prime minister.

OPINION: This article is designed to provide balance to the views from Eric Crampton on the Regulatory Standards Bill (July 14).

The debate on the bill has been dominated by economists and business interests.

Their plea is that capitalism should be less regulated than it is now.

It is regulated now as it always has been by decisions made by an elected Parliament whose members are accountable to the public.

The New Zealand Law Society submission on the bill is a devastating attack on its legally obnoxious features.

The bill amounts to a clear and present danger for the future of New Zealand’s democracy. It must not be passed.

This bill strikes at the heart of how Parliament exercises its responsibility to make law. It aims to weaken and interfere with existing democratic safeguards located in the House of Representatives.

The bill establishes one minister as a wide ranging regulatory supremo backed by a small Regulatory Standards Board comprising hand-picked economists

The board would have statutory and enforceable legal powers to compel information and data from ministers, agencies and public servants. Reports of the group go to relevant ministers, chief executives of departments and agencies, and select committees.

The bill establishes an elaborate mechanism for the board to influence government regulation in New Zealand in the hope of reducing it. The theory behind the measure is that there is too much regulation and that is not in the public interest.

The case is based on assertion, not evidence.

What is asserted is mere window-dressing. The bill itself is not compatible with the rule of law.

Sir Geoffrey Palmer describes the Regulatory Standards Bill as a “clear and present danger for the future of New Zealand’s democracy”. (File photo)

Accountability and high quality legislation and better means of making law requires reform of parliamentary processes, not the injection of new and unaccountable influencers in the form of the Regulatory Standards Board.

The measure amounts to a back-door method of interfering with the work of MPs who are the elected and accountable decision- makers.

The inference from the bill is that MPs cannot be trusted to be fair about what is regulated and how.

MPs have plenty of existing powers to disallow statutory regulations if they decide to do so.

One would have thought if an objectionable regulation remains it must be that after examination by the Regulations Review Committee it has been decided the case to disallow is not convincing.

By constitutional convention the Regulations Review Committee is chaired by an Opposition MP.

What is set up is an unelected and unaccountable small group of economists (the minister has said they will be economists, although the bill does not require it) with an extraordinary and wide ranging capacity to run interference. The operational principles in the bill are carefully removed from judicial interpretation as they are not enforceable law.

Their job is clearly to ride herd against excessive regulatory measures wherever they appear. They have wide ranging powers enforceable through court order to secure information or data wanted.

The grave weakness of the proposal lies in its capacity to weaken the basic principle of individual ministerial responsibility which animates the New Zealand constitution.

It will turn Cabinet into a sea of confusion and with overlapping ministerial responsibilities. It has echoes of the Star Chamber about it .

If enacted in its present form it would be a retrograde step with consequences that could be dangerous by inhibiting proper regulation when it is required to protect public safety in the public interest.

One glaring illustration of this lies in the bill’s legal effect: “This act does not confer a legal right or impose legal rights on any person that is enforceable in a court of law.”

This is novel and in my experience an unprecedented provision that is astonishing.

It is contrary to the doctrine of the separation of powers, that Parliament can enact the law but disputes about its interpretation are the responsibility of the courts, not ministers.

This will be a statute that is law for some purposes and not others. And the operational 12 legal principles are not law.

That is itself unconstitutional.

It is like the rule of Humpty Dumpty:

“ ‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master – that’s all.’ ”

If the 12 principles stated in clause 8 are sound why would they not be enacted as law? Is it because the purpose of the exercise is to change the law without submitting the criteria to proper analysis or amendment during the scrutiny process in front of the select committee?

Or is it to ensure the principles are followed by the minister and the Regulatory Standards Board, although they are not subject to interpretation by the courts, thus concealing their one sided nature to cover relevant matters such as protecting the environment? The principles can have wide and undesirable consequences by requiring appropriations for the taking of property contrary to the principle that protects property.

The principles are clearly incomplete and biased in a certain neo-liberal political direction. For example, principle 8, because of an absence of a definition of the word “property”, has vast range. Property in its natural and ordinary meaning is exceedingly wide. Its application is unpredictable.

It has the potential to place restrictions on environmental management that on many occasions are likely to prove to be unacceptable to the public and attract widespread resistance. As a former Minister for the Environment I believe the licence granted to polluters by the bill is unsound.

What is erected is a legal fiction. If the principles were made to be enforceable law the whole edifice would probably collapse and become totally unworkable.

Perhaps the most remarkable development has been the wall of opposition that has emerged to the bill. As the 75-page regulatory impact statement shows, the minister’s own ministry is opposed to the minister’s own bill. And their objections are entirely sound. The critics include:

The advice of the minister’s own officials.
The submission of the New Zealand Law Society.
The Waitangi Tribunal in its interim report because the principles of the Treaty of Waitangi are entirely neglected from what the tribunal correctly calls a “constitutional” bill.
The expert government adviser on good legislative practice, the Legislation and Design Committee.
A significant number of important NGOs.
A massive number of submissions to the select committee.

* The Ministry of Regulation advises that under the draft legislation, only the chief executive of the ministry would have statutory and enforceable legal powers to compel information and data from ministers, agencies and public servants; the Regulatory Standards Board would not have those powers.