The vanity of promising a regulation bonfire

National Party leader Simon Bridges isn't the first politician to campaign pledging to axe regulations, and should he become PM won't be the first to fail to deliver, writes Te Herenga Waka—Victoria University of Wellington's Professor Jeroen van der Heijden.

National Party leader Simon Bridges promises a ‘regulation bonfire’ and to axe 100 regulations in the first six months of his tenure should he become Prime Minister. On top of that, he promises to cut two regulations for each new regulation introduced under his reign.

Promising to reduce the regulatory burden experienced by businesses and citizens is a well-trodden path in the run-up to an election. It has long been the typical rally cry for ambitious politicians (and property moguls for that matter). Donald Trump was vehement in his 2016 rallies about cutting red tape (and introducing a ‘one in, two out’ rule) and so were Tony Abbott in Australia in 2013 and David Cameron in the United Kingdom in 2010.

Living up to the promise of cutting red tape seems to be more complicated. After more than three decades of deregulation and related initiatives all around the world, it is safe to conclude we have ended up in a situation of ‘freer markets, more rules’. To date, for example, Trump has not achieved a significant reduction of the number of regulations and codes in the United States. On the other side of the Atlantic, Cameron left British businesses more regulated than before his tenure as Prime Minster (and residents less safe).

With that in mind, promises of a ‘regulation bonfire’ and a ‘one in, two out’ rule can best be seen as political vanity projects unlikely to achieve any meaningful results. Were Bridges to take his ambitions of reducing the regulatory burden of Kiwi businesses and citizens seriously, he would be better off looking at the larger regulatory landscape of New Zealand. It is at the higher level where substantial reform is required; the details that he now puts in the spotlight will follow from there.

For example, to make sure regulation stays up to date, how about introducing sunset provisions or periodical fitness tests for all new (and possibly existing) regulation? This would require an assessment of regulations after a certain amount of time so they can be adjusted to changed circumstances or abolished if found unnecessary. This puts the responsibility for change on the regulator—and would save Bridges the time to handpick and burn the suggested 100 regulations from the hundreds of thousands we have.

Another example, how about introducing regulation as rolling rule regimes rather than static entities? In this model, regulators collect experiences from those subject to regulation and call for proposals about how the regulations could be improved. Using these experiences and proposals, regulators then periodically reformulate minimum regulatory requirements and paths to move from the current state to a future one. But all in an open conversation with those subject to regulation.

Thus, rather than picking a small number of regulations and ridiculing these over the next months during his campaign, Bridges should present us with a more convincing evaluation of the regulatory state of New Zealand. How is he going to make sure New Zealand will have in place a regulatory system fit for the 21st century by the end of his tenure if he becomes Prime Minister? Just ‘burning’ a handful of rules is not going to get us there, as history has shown repeatedly.

To be fit for the 21st century, our sometimes archaic and often static regulatory system needs to become much more dynamic, adaptive and resilient. Sunset clauses, periodical fitness tests and rolling rule regimes are but a few of the solutions to achieve that change. At the same time, it is essential we focus on regulatory practitioners: a dynamic regulatory system needs a dynamic regulatory workforce for its implementation to help Kiwi businesses and citizens to achieve the best regulatory outcomes.

That all being said, if Bridges really wants a bonfire to burn ‘unnecessary’ regulation, I hope he will check if he needs a fire permit. For good reasons, bonfires are regulated in New Zealand as well.

Professor Jeroen van der Heijden is the Chair in Regulatory Practice in Te Herenga Waka—Victoria University of Wellington’s School of Government.

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