Reference: 20240126
7 March 2024
Andrew Riddell
[FYI request #25099 email]
Dear Andrew
Thank you for your Official Information Act request, received on 29 February 2024. You
requested the following:
I have reviewed the information provided and do not understand how parts of the
provided Treasury reports/advice on regulatory impact statements can be
redacted on the grounds that the content is out of scope.
My request was about regulatory impact statements, the reports are about
regulatory impact statements. Clearly all of a report about regulatory impact
statements is in scope.
Further I, as the requester, am much better placed to decide on the relevance of
information provided or withheld.
Therefore I request the documentation Treasury has provided to date be resent
without the “out of scope” redactions.
Information being released
Please find enclosed the following document:
Item
Date
Document Description
Decision
1. 29 November
Treasury Report T2023/1898 100 Day
Release in part
2023
Action Plan regulatory commitments:
Cabinet’s impact analysis requirements
and New Zealand’s international good
regulatory practice obligations
I have decided to release the document listed above, subject to information being
withheld under one or more of the following sections of the Official Information Act, as
applicable:
• section 6(a) – to prevent prejudicing the security or defence of New Zealand or
the international relations of the Government of New Zealand,
• section 9(2)(g)(ii) – to maintain the effective conduct of public affairs through
protecting Ministers, members of government organisations, officers and
employees from improper pressure or harassment,
1 The Terrace
PO Box 3724
Wellington 6140
New Zealand
tel. +64-4-472-2733
https://treasury.govt.nz
• section 9(2)(f)(iv) – to maintain the current constitutional conventions protecting
the confidentiality of advice tendered by Ministers and officials,
• section 9(2)(h) – to maintain legal professional privilege, and
• section 9(2)(k) – to prevent the disclosure of information for improper gain or
improper advantage.
Direct dial phone numbers of officials have been redacted under section 9(2)(k) in
order to reduce the possibility of staff being exposed to phishing, social engineering
and other scams. This is because information released under the OIA may end up in
the public domain, for example, on websites including Treasury’s website.
In making my decision, I have considered the public interest considerations in section
9(1) of the Official Information Act.
Please note that this letter (with your personal details removed) and enclosed
documents may be published on the Treasury website.
This reply addresses the information you requested. You have the right to ask the
Ombudsman to investigate and review my decision.
Yours sincerely
John Marney
Manager, Regions, Enterprise and Economic Development
2
20240126
Table of contents
1.
Treasury Report T2023-1898 100-Day Action Plan regulatory commitments -
1
Cabinet’s impact analysis requirements and New Zealand's international good
regulatory practice obligations
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Treasury Report: 100 Day Action Plan regulatory commitments: Cabinet’s
impact analysis requirements and New Zealand's
international good regulatory practice obligations
Date:
29 November 2023
Report No:
T2023/1898
File Number:
SH-11-2-7-1
Action sought
Action sought
Deadline
Hon David Seymour
Note our recommended approach to the impact
29 November 2023
analysis requirements for 100 Day Action Plan
Minister for Regulation
proposals, which we understand is reflected in
the Prime Minister’s 100 Day Action plan Cabinet
paper.
Note NZ has international trade agreement
obligations to undertake consultation on
proposals in some areas, and the Treasury and
MFAT can provide advice on consultation options
that are consistent with these obligations.
Hon Nicola Willis
Note the contents of this briefing.
N/A
Minister of Finance
Contact for telephone discussion (if required)
Name
Position
Telephone
1st Contact
Floris de Meijer
Analyst,
s9(2)(k)
s9(2)(g)(ii)
Regulatory Strategy
Harry Chapman
Senior Analyst,
Regulatory Strategy
Pip van der Scheer
Manager, Regulatory
Strategy
Minister’s Office actions (if required)
Return the signed report to Treasury.
Note any
feedback on
the quality of
the report
Enclosure:
N/A
Treasury:4877485v9
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Treasury Report: 100 Day Action Plan regulatory commitments:
Cabinet’s impact analysis requirements and New Zealand’s international
good regulatory practice obligations
Executive Summary
The Government has indicated an intention to progress a range of policy proposals in its first
100 days. The time constraints in this context have implications for the way in which we meet
our international obligations and operationalise the regulatory impact analysis (RIA)
requirements.
The Government has indicated a focus on good regulatory quality and minimising the impact
of regulation on businesses and individuals. The Regulatory Management System, of which
RIA is a part, plays an important role in helping the Government to achieve this goal. RIA is a
key tool for supporting evidence-based policy development, supporting transparency and
accountability of regulatory decisions and the provision of free and frank advice. The
requirements set in the 100 Day Action Plan period provide an opportunity to set
expectations of good regulatory practice for Ministers and agencies for the rest of the term.
The application of impact analysis requirements to 100 Day Action Plan proposals
The context of the 100 Day Action Plan can make completing comprehensive regulatory
impact analysis impractical. There is no standing exemption for urgent proposals in the 100
Day Action Plan. We do not recommend completely suspending the requirements so
agencies can provide Ministers with the best advice possible and continue to meet New
Zealand’s international obligations. However, we recommend suspending the requirement for
formal quality assurance of Regulatory Impact Statements for 100 Day Action Plan proposals
and requiring post-implementation reviews for all proposals one year after the relevant
legislation is enacted (unless waived by the Treasury).
This approach enables a streamlining of the requirements to enable the delivery of 100 Day
Action Plan proposals, while ensuring we continue to meet New Zealand’s international
obligations and assess regulatory quality in these areas. We understand this approach to
impact analysis is reflected in the Prime Minister’s 100 Day Action Plan Cabinet paper.
International obligations and consultation
New Zealand has accepted a range of good regulatory practice (GRP) obligations and
expectations in a number of its international trade agreements, including the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (the CPTPP Agreement). These
international obligations indicate minimum requirements in areas including consultation.
s9(2)(f)(iv)
The Treasury and Ministry of Foreign Affairs and Trade officials can advise you on public
consultation options that are consistent with these obligations, and whether there are any
particular regulatory proposals in the 100 Day Action Plan that are caught by these
obligations.
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Recommended Action
We recommend that you:
a
note that the context of the 100 Day Action Plan can make completing comprehensive
regulatory impact analysis impractical
Noted
Minister for Regulation
b
note officials intend to issue guidance indicating where agencies should focus their
efforts in relation to impact analysis if they are subject to time constraints
Noted
Minister for Regulation
c
note that the Prime Minister has overall responsibility for Cabinet processes and
circulars, including Cabinet’s impact analysis requirements
Noted
Minister for Regulation
d
note we understand the following approach to the impact analysis requirements has
been incorporated into the Prime Minister’s 100 Day Action Plan Cabinet paper:
a. suspending the requirement for quality assurance of Regulatory Impact
Statements
b. requiring post-implementation reviews be undertaken 12 months after the
legislation is enacted, unless this requirement is waived by the Treasury
Noted
Minister for Regulation
e
note that New Zealand has accepted a range of good regulatory practice obligations in
its international trade agreements, some of which wil apply to at least some regulatory
proposals in the 100 Day Action Plan commitments
Noted
Minister for Regulation
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f
note that the CPTPP Agreement includes a requirement that New Zealand “provide
interested persons and other Parties with a reasonable opportunity to comment” on
proposed primary and secondary legislation related to any matter covered by the
Agreement
Noted
Minister for Regulation
g s9(2)(f)(iv)
h
note that the Treasury and Ministry of Foreign Affairs and Trade officials can advise you
on whether particular regulatory proposals in the 100 Day Action Plan would be caught
by this obligation, and on public consultation options consistent with this obligation
Noted
Minister for Regulation
Caralee McLiesh
Secretary to the Treasury
_____/_____/_______
Hon David Seymour
Hon Nicola Wil is
Minister for Regulation
Minister of Finance
_____/_____/_______
_____/_____/_______
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Treasury Report: 100 Day Action Plan regulatory commitments:
Cabinet’s impact analysis requirements and New
Zealand's international good regulatory practice
obligations
Purpose of Report
1.
This report provides advice on the process for 100 Day Action Plan regulatory
commitments. New Zealand has international good regulatory practice (GRP)
obligations which apply to these commitments, including requirements to consult and
prepare regulatory impact analysis (RIA).
2.
This report outlines our recommended approach for how agencies should approach
RIA for 100 Day Action Plan proposals and explains our underlying reasoning. We
understand this approach has been reflected in the Prime Minister’s 100 Day Action
Plan Cabinet paper.
The 100 Day Action Plan and regulatory impact analysis
3.
The Government has indicated a focus on good regulatory quality and minimising the
impact of regulation on businesses and individuals. The Regulatory Management
System (RMS), of which RIA is a part, plays an important role in helping the
Government to achieve this goal. As set out below, impact analysis can help to ensure
Ministers have full information on the costs and benefits of proposals under
consideration, as well as implementation considerations and risks. Analysis at the
beginning of the process can minimise the risk of unintended consequences and
maximise the chance of policies being successfully implemented and ultimately
achieving their objectives. The requirements set in the 100 Day Action Plan period
provide an opportunity to set expectations of good regulatory practice for the rest of the
term.
Background on impact analysis
4.
Cabinet’s impact analysis requirements are set out in Cabinet Office circular CO (20) 2.
The requirements apply to any government regulatory proposal taken to Cabinet for
approval. A “government regulatory proposal” is a proposal that will ultimately require
creating, amending, or repealing primary or secondary legislation.
5.
RIA is a key tool for supporting evidence-based policy development, supporting
transparency and accountability of regulatory decisions and the provision of free and
frank advice. Impact analysis provides insight into the implications of a proposal,
including any risks or unintended consequences.
6.
The key product of the requirements is a Regulatory Impact Statement (RIS). Under
the status quo, any government regulatory proposals would need to be supported by a
RIS unless an exemption is applicable. The RIS is a government agency document that
summarises an agency’s best impact analysis relating to a regulatory proposal.
7.
The impact analysis framework involves defining the policy or operational problem,
identifying the policy objectives, and the full range of feasible options for addressing
that problem. RISs also provide the basis for consultation with stakeholders, and
effective consultation must be undertaken when carrying out impact analysis. Through
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routine publication of RISs, the impact analysis requirements also contribute to
transparency and accountability.
8.
The following table sets out various aspects of the usual impact analysis process:
Impact analysis A Regulatory Impact Statement (RIS) is developed to be
attached to the Cabinet paper. The RIS usually includes:
• a problem definition,
• objectives and criteria,
• analysis of a range of feasible options,
• cost-benefit analysis on the preferred option,
• stakeholder views, and
• implementation considerations and a plan to undertake
monitoring, evaluation and review.
Quality
Al impact analysis must undergo independent quality assurance
assurance of
(QA) before being attached to the Cabinet paper. Most QA is
impact
undertaken by agencies, but the Treasury assures the quality of
analysis
RISs for significant proposals.
The QA panel provides the RIS with a rating of ‘meets’, ‘partially
meets’, or ‘does not meet’. The QA panel inserts a formal QA
statement into the Cabinet paper setting out the rating and
providing information on the quality of the analysis and any
limitations or concerns.
Publication
RISs (subject to any redactions) must be published on the
websites of the administering agency and the Treasury,
generally within 30 days of Cabinet making a decision.
Implications if
If no RIS is provided, or it ‘does not meet’ the QA standard, the
requirements
RIA requirements are not met and the Treasury assesses these
are not met
situations on a case-by-case basis. In some circumstances, we
may determine that a Supplementary Analysis Report could be
provided at the next major policy decision at a Cabinet
Committee meeting. Alternatively, a post-implementation review
may be required if there is no time to provide impact analysis
before the legislation is approved by Cabinet.
9.
There are exemptions available from the RIA process under the Cabinet circular. For
example, exemptions for proposals that have minor impacts on individuals, not for
profits and businesses, or for proposals responding to emergency situations. However,
the urgency of a policy proposal is not in itself sufficient grounds for an exemption.
International obligations and impact analysis
10. The promotion of RIA has been a key feature of OECD and APEC recommendations
on good regulatory practice for many years. New Zealand has also accepted a range of
good regulatory practice obligations through international trade agreements. To a large
extent our current impact analysis requirements, processes and mechanisms meet our
current and impending international obligations. International obligations relating to
impact analysis will also apply to some regulatory actions covered by the 100 Day
Action Plan.
11. Under the Free Trade Agreement between New Zealand and the United Kingdom (the
NZ–UK FTA) New Zealand must “endeavour to carry out proportionate impact
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assessments of proposed major regulatory measures” and must publish the findings of
those assessments in a timely manner.1
12. In addition, under the NZ–UK FTA, New Zealand “shall” maintain processes and
mechanisms for impact assessment that consider:
•
the need for a regulatory measure, including the nature and significance of the
issue the measure is intended to address; and
•
any feasible and appropriate regulatory and non-regulatory options that would
achieve the relevant policy objectives.
13. s6(a)
We
discuss the Government’s options for setting expectations for impact analysis on 100
Day actions further below.
The previous Government streamlined the impact analysis requirements for its
100 Day Action Plan commitments
14. In 2017, the incoming Government put in place streamlined impact analysis
requirements to support the implementation of its 100 Day Action Plan. This meant
that:
•
Where time constraints precluded full analysis, agencies were able to note key
limitations or constraints, and then focus on implementation and operation, and
monitoring, evaluation and review.
•
QA was required, but QA panels were not required to assign a formal quality
rating.
•
In situations where RIA was required but not provided, the requirement for
Supplementary Analysis was generally triggered.
15. This streamlined approach to impact analysis was subject to criticism by some civil
society stakeholders, and in the media, on the basis that it did not require agencies to
prepare comprehensive impact analysis. Some stakeholders suggested that post-
implementation review should be mandatory for 100 Day Action Plan commitments.
The Government has options about the application of the impact analysis
requirements to 100 Day priorities
16. The Government has choices about how the RIA requirements wil apply to regulatory
proposals that relate to priorities in the 100 Day Action Plan.
17. We do not think that the requirement for impact analysis should be completely waived
for 100 Day priorities for a number of reasons. First, RIA is an important instrument to
1 We have focussed on the UK FTA as it has the strongest obligations which are currently in force. The
CPTPP also contains relatively flexible obligations to “generally encourage” impact analysis to be
conducted by regulatory agencies, and while recognising each party’s specific circumstances and
approach, sets out that impact analysis should fulfil certain requirements. The EU–NZ FTA (not yet in
force) “affirms the intention” of NZ’s regulatory authority to carry out impact assessment in line with its
respective rules and procedures, and notes each regulatory authority should promote the identification
and consideration of certain requirements.
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24. A full problem definition would be preferred. Where time constraints do not allow for a
complete problem definition, agencies could use the regulatory proposal as set out in
the 100 Day Action Plan priority as the starting point for analysis.
25. In some situations, it may be relevant to refer to previous impact analysis to advise
Cabinet, to streamline the preparation of impact analysis further.2
26. We consider this approach would be consistent with New Zealand’s obligations for
impact analysis to be produced.
We recommend removing the mandatory requirement for quality assurance of RISs
27. In recognition of time pressures and limited departmental resources being available, we
recommend QA of RISs for 100 Day Action Plan priorities be strongly encouraged but
not mandatory. Where formal QA is not undertaken
•
agencies should at a minimum get the RIS peer reviewed within the agency (but
no formal rating would be required), and
•
the authors of the RIS would insert a brief statement into the QA section of the
RIS, and the ‘impact analysis’ section of the Cabinet paper, noting that the RIS
has not been quality assured and setting out the self-identified limitations of the
impact analysis.
28. By not requiring QA, Ministers would not have an independent view on the quality of
the analysis and would instead need to rely on the self-described limitations. However,
it would allow agencies to devote more time to preparing the analysis in the first place.
29. Our international obligations do not require that QA is undertaken, so we have more
freedom to temporarily amend this part of the system.
30. On balance, we consider this approach is most likely to enable the timely delivery of
policy proposals, while still providing some insight into the quality of the analysis
produced. (We have included additional analysis on other options in appendix one.)
We recommend requiring post-implementation reviews of 100 Day Action Plan
proposals
31. Post-implementation review is often required when impact analysis has not been
completed prior to Cabinet approval, or it was completed to an unsatisfactory standard,
and then the regulatory change has been implemented. Conducting a post-
implementation review can provide a useful safeguard to ensure that the change is
meeting its objectives and can identify potential improvements.
32. We recommend all regulatory proposals should be subject to a post-implementation
review one year after the legislation is enacted unless the Treasury’s RIA team waives
the requirement. Where the relevant agency considered post-implementation review
would not be useful (e.g. because the change involves reverting to the previous status
quo), they could seek a waiver from the Treasury’s RIA Team, who would consider
factors such as the significance of the proposal, risks, etc. (We have included
additional analysis on other options in appendix one.)
33. Post-implementation reviews are relatively recent innovations in the RIA system,
agency capability to conduct evaluations is limited, and there can be challenges
2 For example, where the 100 Day Plan priority repeals a piece of legislation, the impact analysis section
could refer to the published previous RIS completed. Agencies can then focus new impact analysis on
current implementation and transitional issues. When Cabinet is agreeing to both repeal legislation and
agree on a replacement that is not just a reversion to the previous status quo, new analysis would be
required in relation to the replacement proposal.
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5.
We do not recommend the other options:
•
Option 2 would provide Minsters with a better overview of the quality of the
analysis, but it would be significantly more time consuming than option 1.
•
Option 3 (the status quo) would provide the most robust quality assurance of
impact analysis produced, but it would be time consuming and may be an
impediment to the delivery of priority proposals.
Choices about whether 100 Day Action Plan proposals require post-
implementation review
6.
We recommend all regulatory proposals should be subject to a post-implementation
review one year after the legislation is enacted unless the Treasury waives the
requirement. Where the relevant agency considered post-implementation review would
not be useful (e.g. because the change involves reverting to the previous status quo),
they could seek a waiver from the Treasury, who would consider factors such as the
significance of the proposal, risks, etc.
7.
We considered an alternative approach where the Treasury would consider on a case-
by-case basis whether to require post-implementation review, which would result in a
reduced volume of reviews. However, we ultimately concluded all proposals should be
subject to post-implementation review unless this requirement is explicitly waived. This
additional requirement for evaluation reflects the fact that the requirement for QA is
being dropped – so the quality of the impact analysis which is produced is likely to be
lower – but also that the 100 Day Action Plan process condenses the usual policy
process and may increase the chance of mistakes or unanticipated effects.
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