Chapter 14: Occasional Reports

I Occasional Reports

Under Standing Order 326(4), the Regulations Review Committee may consider any matter relating to regulations and report on it to the House. This chapter provides summaries of the topics covered by these reports. These summaries constitute only a brief consideration of the issues raised by the Committee.

II Fees

In 1989, the Regulations Review Committee addressed a number of issues relating to the charging of fees by regulation.³⁴² Developments in the state sector had added a new impetus to the need to provide satisfactory answers to newly emerging questions about when and how fees could be charged. These included the corporatisation of a number of government departments, the vesting of the power to charge fees in someone other than the Governor- General, and the widespread implementation of user-pays policies.

First, the Committee established that there are some government activities where cost-recovery should not apply. Some examples include the armed forces, the police, and the House of Representatives. The Committee stated that because these services are provided to the community as a whole, charging fees is neither practicable nor appropriate. However, the more commercial the activity, the more cost-recovery becomes both suitable and feasible. Ultimately the service provided by the government might be only one of a number of suppliers, in which case the transaction is performed on a contractual basis.

Secondly, when charging a fee, an important issue is whether the ‘fee’ is so excessive that it is really a tax in disguise; if the fee is indeed considered a tax, then it must be approved by an Act of Parliament. Under Article 4 of the Bill of Rights 1688 (UK), it is illegal for the Crown to seek to raise money without parliamentary approval.³⁴³ In addition, section 22(a) of the Constitution Act 1986 provides that it shall not be lawful for the Crown, except by or under an Act of Parliament, to levy a tax. In considering whether a fee is a really a tax, the Committee suggested that any levy that is compulsory, for public purposes, and is enforceable must have prior parliamentary authority if it is to comply with constitutional requirements.³⁴⁴

Thirdly, the Committee addressed who should be responsible for fixing the fee. It took the view that, where fees are fixed by regulation, only the Governor-General acting with the advice and of the Executive Council should be responsible for the making of regulations setting fees. The Committee expressed concern at the practice of giving a third party the power to set fees by regulations, for example the Director-General of a government department. The Committee warned of a lack of accountability in these situations.

Fourthly, The Committee considered the basis on which a fee should be calculated. The Committee expressed concern at those situations where greater than cost-recovery is sought as this may indicate that the charging of fees is simply a revenue gathering exercise. The Committee did, however, temper this by stating:³⁴⁵

The Committee also acknowledged the argument that fees can be set at greater than cost recovery in order to discourage over-use of a service. However, in situations where fees charge greater than cost recovery, the Committee said that there is a greater obligation to inform the public that they are paying greater than cost recovery, and to explain why it is considered necessary.

Finally, the Committee considered the extent of information about fee setting that should be made available to the public. The Committee said that as a general rule, every department should be able to quantify the cost of providing a service, and that this information should be made available to the public as a matter of course. In situations where there is a choice between the convenience of the government in not supplying the information, and the convenience of the public being given the information, the decision should be in favour of the public.

In its response, the government agreed with the general approach of the Committee and that it had established an officials committee to study the matter.³⁴⁶ It noted the test laid down by the High Court of Australia in Air Caledonie International and endorsed the constitutional principle that no tax is to be levied without parliamentary approval. It further agreed that a “fee” may, on analysis, be found to be a tax in disguise. The government cautioned that it would not be willing to make the pricing policies of State Owned Enterprises (SOEs) subject to approval by either the government or the House. It said that to do so would be inconsistent with the requirement in section 4 of the State Owned Enterprises Act 1986 that SOEs run as profitable businesses. While the government agreed with the Committee’s aim of greater parliamentary scrutiny of fees and charges, it did not accept a Committee recommendation that an explanatory note should accompany all bills and regulations that quantify fees.

III Deemed Regulations and Disallowable Instruments that are not Legislative Instruments

The Regulations Review Committee examines all “disallowable instruments” as defined in section 38 of the Legislation Act 2012. That definition includes instruments previously described as “deemed regulations”. Deemed regulations are a form of delegated legislation that are treated as if they were regulations. This is notwithstanding that they are made outside the traditional regulation-making process.³⁴⁷ Deemed regulations can take a variety of forms and, like traditional regulations, cover a wide range of subject matters. Deemed regulations can include rules, codes, instructions, and standards. Two examples of deemed regulations include Privacy Codes of Practice issued under the Privacy Act 1993, and penal operational standards made by the Chief Executive of the Department of Corrections under the Penal Institutions Act 1954.

In 1999, the Committee undertook a thorough investigation into deemed regulations.³⁴⁸ In 2004 the Committee produced a report on the principles for determining if delegated legislation is given the status of regulations.³⁴⁹ In 2006 the Committee undertook an investigation into deemed regulations that were not being presented to the House.³⁵⁰ In 2014, the Committee completed a report on the creation, identification and publication of “disallowable instruments that are not legislative instruments”. Each of these reports is discussed in turn.

A  1999 Report: Deemed Regulations

The Committee identified two key issues in determining whether it is appropriate for legislation to provide the power to make deemed regulations. The first is whether it is appropriate for Parliament to delegate a law-making power at all.³⁵¹ The second issue is what form a power should take, and to whom it should be delegated. Because of the lack of checks in place for the making of deemed regulations as compared with ordinary regulations, the Committee stated that the creation of deemed regulations should be an exception to the rule. Furthermore, a regulation-making power to make deemed regulations should only be exercised in accordance with the following principles:

• The importance of the delegated power: In determining whether a delegated power is appropriate, an assessment should be made as to the likely effect the delegated legislation will have on the rights and interests of individuals. The Committee singled out criminal offences as being inappropriate for delegated legislation. Where Parliament had determined that offences can be imposed under delegated legislation, the instrument should be a regulation made by the Governor-General by Order-in-Council rather than a deemed regulation.
• The subject matter of the power: On occasion, the subject matter of delegated legislation may suggest that an alternative process to the traditional regulation-making process is appropriate. This may be where the subject matter is relatively detailed or technical. The Committee cited civil aviation rules as being more suitable for deemed regulations because of their highly technical requirements and their specific application to a certain class of persons.
• The application of the power: If the delegated legislation affects a narrowly defined or clearly identifiable group rather than the public at large, deemed regulations may be more appropriate than ordinary regulations. For example, civil aviation rules apply to pilots and others in the aviation industry and, as such, may be suited to deemed regulations. On the contrary, land transport rules affect all those who hold a driver’s licence and should be contained in ordinary regulations rather than deemed regulations.
• The agency to whom the power is delegated: The most appropriate legislator should be chosen for the particular delegated legislation. This may be the Governor-General in Executive Council, an individual minister, an official, or another agency.

The government response to the Committee’s recommendations came in two stages.³⁵²

In its first response, the government agreed that the principles identified by the Committee regarding deemed regulations should be taken into account when legislation is developed in order to determine whether ordinary regulations or deemed regulations were appropriate. It also agreed that the Cabinet Manual should be amended so that a power to make deemed regulations must be first identified and that it conforms with the principles stated in the Committee’s report. The government also directed that, where a government bill empowers the making of deemed regulations, the reason for the provision must be included in the explanatory note to the bill.

The second government response dealt with the remaining Committee recommendations. The most noteworthy of these was the rejection of the recommendation that all deemed regulations be approved by Cabinet as part of the promulgation process. This was rejected on the basis that Cabinet is primarily a decision-making body and not a scrutiny or monitoring mechanism. While Cabinet does consider ordinary regulations, this is because: (a) ordinary regulations regularly relate to matters of significant concern; and (b) ordinary regulations are made by Order in Council and therefore will involve the executive in any case. Requiring Cabinet to scrutinise deemed regulations – which by their very nature are technical and detailed – would not sit comfortably with Cabinet’s collective decision- making role. Instead, the government stated that those authorities responsible for making deemed regulations should themselves ensure that the deemed regulations are constitutionally proper.

B  2004 Report: Principles for Determining Status of Delegated Legislation

Following on from its 1999 report on deemed regulations, the Committee investigated the proper classification of delegated legislation.³⁵³ The Committee expressed concern that a number of legislative instruments that should have been eligible for scrutiny by the Regulations Review Committee were in fact not because they did not come under the definition of “regulations” in section 2 of the Regulations (Disallowance) Act 1989. This was because the instrument was not declared to be a regulation (ie it was not named as such, nor was it deemed to be a regulation for disallowance purposes) even though the instrument “exhibited all the characteristics of a law-making instrument and ought to be classified as a regulation”.³⁵⁴

The Committee considered how the apparent inconsistencies in classification could best be remedied. Ultimately it proposed that the definition of “regulations” in the Regulations (Disallowance) Act 1989 and the Interpretation Act 1999 be amended to broadly correspond to the Australian Legislative Instruments Act 2003. The latter Act reformed the Australian approach to delegated legislation by making the true character of an instrument (its substance rather than its form) the test for its status. In addition, the Act created a Federal Register of Legislative Instruments. If an instrument is not listed on this register, then it is not enforceable. The Committee argued strongly in favour of such a model for New Zealand. In addition to providing certainty as to the proper status of delegated legislation, the Committee also pointed to the benefits that would accrue from a common legislative approach with Australia.

The government response to the proposal for amending legislation based on the Australian Legislative Instruments Act 2003 was only lukewarm. It argued that it was not clear that the change in approach would bring greater clarity to the law. It was worried that this approach would “capture a very wide range of instruments and have significant effects on the administrative processes of government departments and a range of other groups who issue instruments of legislative character”.³⁵⁵

The government stated that it would monitor the effectiveness of the Australian model over the next two years. It also said that it would require officials to advise Cabinet of situations when a bill provided for the making of legislative instruments that did not come under the established definition of “regulations”. The government rejected the Committee’s call for a central register of legislative instruments.

C  2006 Report: Deemed Regulations Not Presented to the House

It came to the Committee’s attention that a number of deemed regulations made in 2006 had not been presented to the House in accordance with section 4 of the Regulations (Disallowance) Act.³⁵⁶ The Committee expressed concern that this could result in the courts holding such regulations to be invalid. The Committee attributed the failure of many organisations to present deemed regulations to the House to a lack of understanding concerning both the Regulations (Disallowance) Act’s requirements and the correct procedure for presenting deemed regulations to the House. The Committee recommended that provisions that deem instruments to be regulations for the purposed of the Regulations (Disallowance) Act contain a paragraph requiring presentation of the instruments to the House in accordance with that Act. Further, it wrote to all ministers advising them of the correct procedure for presenting deemed regulations to the House.

The government agreed with Committee’s recommendation.³⁵⁷ In relation to new legislation containing a provision deeming an instrument to be a regulation, the government stated that a paragraph would be included requiring presentation of the instruments to the House in accordance with the Regulations (Disallowance) Act 1989. In relation to existing legislation, the government said it would consider whether, and how best to, insert such a paragraph.

These changes have since been addressed in the Legislation Act 2012. Section 41 of that Act, which requires presentation of certain disallowable instruments to the House, automatically applies to all “legislative instruments”, which, as discussed in Chapter 3 above, encompasses instruments that were “regulations” under the 1989 Act and instruments stated by an Act to be disallowable (ie one form of deemed regulation). Provided that a parent Act explicitly states that instruments made under it are to be disallowable, they now must be presented to the House for scrutiny, even if they would previously have been classed as “deemed regulations” and are not strictly “legislative instruments”. Section 41 does not, however, include instruments with “significant legislative effect” (defined in section 39 of the Legislation Act 2012) if they are not overtly stated to be disallowable in the Act authorising their creation. This means that an instrument with significant legislative effect that is not stated to be disallowable will still fall within that Act’s disallowance regime, but will not be automatically presented to the House. Scrutiny of these types of instrument is reliant either on the Committee receiving a complaint regarding instruments of this type or exercising its powers without prompting. The result of this is that this class of instrument is less likely to face direct scrutiny than the classes addressed above. Regardless, the automatic presentation to the House of “deemed regulations”, provided that they are stated to be disallowable by their parent Act, is a significant change under the 2012 Act.

D 2014 Report: Disallowable instruments that are not legislative instruments (DINLIs)

The category of instrument once known as “deemed regulations”, As mentioned in Chapter 3, now falls within the Legislation Act, as “disallowable instruments that are not legislative instruments” or “DINLIs” (although, as noted in Chapter 3, this term has been criticised as confusing and will be overtaken by new terminology in the Legislation Act 2019). Generally, these instruments contain codes and rules for specific professions or industries. These instruments, as with deemed regulations, must be presented to the House and are subject to scrutiny by the Regulations Review Committee. They are not, however, drafted by the Parliamentary Counsel Office, but rather by specific bodies to whom drafting power has been delegated by primary legislation.

The Committee’s scrutiny of DINLIs is similar to its scrutiny of legislative instruments, although it has noted that difficulty in identifying and accessing these instruments sometimes causes delay between the instrument being made and the Committee scrutinising it that does not occur in the scrutiny of legislative instruments.³⁵⁸

The Committee has noted that it often finds the following problems:³⁵⁹

• the instrument does not specify the date on which it was made;
• the instrument does not specify under which empowering provision it was made;
• the instrument does not specify the date on which it comes into force;
• the instrument does not mention whether any relevant statutory prerequisites were complied with prior to the instrument being made;
• the instrument is not accompanied by explanatory notes;
• the instrument was not presented to the House within 16 working days in accordance with section 41 of the Legislation Act 2012;
• the instrument is not clearly notified in the Gazette, including inconsistent naming practices; and
• the instrument is not made available on the website of the agency empowered to make it.

The Committee has considered that many of the problems with the creation, identification and publication of DINLIs were minor, but that their combined effect made the parliamentary scrutiny process of these instruments difficult and inefficient.³⁶⁰

In 2014, the Committee completed a report into DINLIs, focusing on the lack of clarity surrounding the creation, publication and status of these instruments.³⁶¹

It made a number of recommendations as follows.³⁶²

• A register of delegated legislation ought to be created by statute, similar to the Australian Federal Register of Legislative Instruments reviewing a similar recommendation made in 2004.³⁶³
• An agency ought to be designated as responsible for DINLIs as an area of law.
• There ought to be a piece of legislation that ensures that every empowering provision (in any Act or delegated legislation, whether already made or yet to be made) states into which category delegated legislation made under it falls.
• In conjunction with the above recommendations, the “significant legislative effect” test ought to be removed from the Legislation Act 2012.
• Whether or not a register is established, all DINLIs required to be presented to the House ought to explicitly include both the words “disallowable instruments” and the requirements for their presentation.
• If a register is not established, the Legislation Act ought to be amended so that DINLIs must be notified in the Gazette and published in full on the relevant bodies’ website, a template is developed for Gazette notices, and a step-by-step guide is created for the process of making DINLIs.

It is worth noting that the first of the Committee’s recommendations, that a register of legislative instruments be established, had already been recommended by the Committee (and rejected by the government) a decade prior in 2004. The Committee heard evidence from the Parliamentary Counsel Office that it had been directed by Cabinet early in 2014 to investigate the feasibility of such a register.

The government responded separately to each of the Committee’s six recommendations.³⁶⁴

First, the government noted the Committee’s concern that DINLIs were often difficult to identify and agreed that citizens ought to have ready access to the law in order to comply with their rights and obligations. While PCO was already required to publish all Acts and Legislative Instruments on the legislation website, “other instruments” were only published on a discretionary basis and it relied on information from other agencies to do so. It also noted that the Gazette, linked directly from the legislation website, was also required to either publish DINLIs in full or notify of their making with a link to the relevant agency website. The government did, however, accept that a central register would provide a broader central source of authoritative, official and current legislation and it directed the PCO to explore the viability of an amendment to the Legislation Act 2012 establishing such a register based on the Australian Commonwealth model. Finally, the government noted that there were policy and mechanical issues surrounding the establishment of a register in legislation that would take some time to solve (for example, the consequences of a failure to register in terms of an instrument’s legal status), so directed the PCO to continue to use its best endeavours to list DINLIs on the legislation website in the meantime.

Secondly, the government was not convinced that the designation of a single agency as responsible for DINLIs would alleviate the Committee’s concerns. The government argued that every agency administering DINLIs was already responsible for the stewardship of those instruments under the State Sector Act 1988, and that the LAC Guidelines, the Cabinet Manual and a Cabinet Office circular relating to delegated legislation all provided those agencies with sufficient information. Further, PCO already provided drafting training to these agencies and was able to assist agencies on a discretionary basis where necessary. The government was also concerned that designating an agency as responsible for DINLIs (instead of or alongside agencies themselves) would make matters more unclear. The government considered that the establishment of a register would better solve the Committee’s concerns on this point.

Thirdly, the government did not support the Committee’s recommendation that empowering provisions ought to be made (by legislation) to state which category instruments made under them would fall into. It stated its reluctance to devote resources to drafting and enacting provisions that were, in most cases, unnecessary, as it considered the definitions in the Legislation Act provided sufficient detail.

Fourthly, the government did not agree with the Committee that the “significant legal effect” test should be removed from the Legislation Act. It noted that the Committee had welcomed this provision in the Legislation Bill as it prevented instruments from being excluded from scrutiny simply based on how they were described (the substance rather than form consideration discussed in Chapter 3). The government considered that the test was straightforward and that the Committee was best placed using its knowledge, experience and judgment to determine whether instruments fell within it. Removing the test, the government argued, would weaken legislative scrutiny of executive actions.

Fifthly, the government rejected the Committee’s recommendations relating to the physical form of DINLIs. It said that under the Legislation Act, DINLIs are disallowable even if they are not presented to the House and do not state that they are disallowable. Stating such requirements would not necessarily relieve the Committee of the task of examining instruments that did not conform to these requirements. The government tentatively supported changes to the presentation requirements for DINLIs. It stated that current government drafting practice in light of the Legislation Act 2012 was to explicitly include such presentation requirements, and the Act had subsequently amended many other Acts to make these requirements clear.

Finally, the government responded to the Committee’s final three recommendations in short form. An amendment to the Legislation Act providing for the publication and notification of DINLIs may be appropriate but should await any decision about the establishment of a register. Further, current drafting practices for Bills that authorised the making of DINLIs were to include notification and publication requirements and a specification of those instruments’ status. The PCO was in the process of creating a guide to drafting tertiary instruments including DINLIs, and it (alongside the LAC Guidelines and the Cabinet Manual) already provided assistance to agencies in drafting on request.

In response to Cabinet’s directive, the PCO has established the Access to Subordinate Instruments Project. The project aims to create a single, comprehensive, official public source for all New Zealand legislation through:³⁶⁵

• modernising and simplifying the statute book and legislative process;
• developing a drafting, document management, lodgement and publication system; and
• modifying the current system of publishing legislation and the New Zealand website.

This project was well received by the Committee,³⁶⁶ and is in the process of being implemented by the Legislation Act 2019, Secondary Legislation Bill and Legislation (Repeals and Amendments) Act 2019.³⁶⁷

IV Henry VIII Clauses

A Henry VIII clause is a type of regulation-making power that enables primary legislation (ie, a statute) to be amended, suspended or overridden by regulation. The Regulations Review Committee has considered that a power to alter the effect or scope of legislation constitutes a Henry VIII clause, even if the power does not allow changes to the text of primary legislation.³⁶⁸ Such clauses are generally viewed as being undesirable on the basis that only Parliament should be able to amend its own laws. They are often contained in Acts that effect large and complex legislative reform. Allowing a regulation to amend or revoke primary legislation is justified on the basis that once in operation, a new Act may require minor amendments to make it workable. The Committee has noted that:³⁶⁹

The Committee used to take the view that Henry VIII clauses should be only used in exceptional circumstances (and never routinely in reforming legislation) and be drafted in “the most specific and limited terms possible.”³⁷⁰ The Committee considered the appropriateness of Henry VIII clauses, as part of its inquiry into the Resource Management (Transitional) Regulations 1994.³⁷¹ It endorsed the views of the Donoughmore Committee (UK) that such clauses should be avoided unless demonstrably essential.³⁷² Furthermore, such a clause:³⁷³

Since 2018, however, the Committee has scrutinised these clause “in a more practical manner”, focusing on whether the regulation-making power is “necessary” and has “appropriate constraints on the use of the power”.³⁷⁴

The Committee has also addressed a number of technical issues that ought to be taken into account when the use of a Henry VIII clause is being considered. First, in its inquiry into resource management regulations, the Committee said that Henry VIII clauses should be drafted in the most specific and limited terms possible. The Committee identified three acceptable purposes for which a Henry VIII clause may be used:

(a) to alter the start date or expiry date of the principal Act;
(b) to preserve a right not intended to be affected by the legislation; and
(c) correcting references used in the legislation.

The Committee further stated its preference that where a department seeks the use of such a wide power, it should be required to justify why that power is necessary before the appropriate select committee.

Secondly, the Committee said that when an empowering provision is used to promulgate regulations that override primary legislation, consultation must be “full and proper”, adopting the definition of consultation established in Air New Zealand v Wellington International Airport Ltd.

Thirdly, the Committee argued that all such empowering provisions should contain a sunset provision, ie, a clause that states that all regulations made pursuant to the Henry VIII clause are to expire in a specified number of years. The Committee recommended that the sunset provision should apply to the empowering provision itself.

Fourthly, the Committee addressed whether confirmation by Parliament was desirable. It said a sunset clause exists giving a regulation a relatively short life, there is little advantage in requiring confirmation by Parliament, provided that the sunset clause is not greater than three years. If it is greater than three years, the Committee recommended parliamentary confirmation be a requirement of the Act.

In its response, the government agreed in principle with most of the Committee’s recommendations.³⁷⁵ The government agreed that a Henry VIII clause should only be used in exceptional circumstances; more particularly when a new legislative regime is put in place. The government also agreed a Henry VIII clause and any regulations made pursuant to it should be subject to a three-year sunset clause (although there may be occasions when a longer period is permissible). If a Henry VIII clause contains a sunset clause of more than three years, parliamentary confirmation is generally desirable. The government did not, however, agree that a formal consultation process should be put in place before a regulation overriding primary legislation is made.

V National Emergency Powers

National emergency powers are often Henry VIII powers granted for the specific purpose of speeding emergency responses. Following criticisms regarding the Government’s regulatory programs to manage the Canterbury rebuild, the Committee inquired into the legislative response to future national emergencies with a view to setting out the constitutional principles that should underpin any recovery process. The Committee considered public and expert commentary relating to the Canterbury Earthquake Recovery Act 2011 and constitutional discussions arising from public scrutiny of the government response. It took particular guidance from the Law Commission’s related work on the response phase of national emergencies.³⁷⁶ The issues canvassed reflect concerns about Henry VIII clauses, in light of the frequently pressing needs for quick responses. The Committee saw the purpose of the inquiry as being:³⁷⁷

A central issue before the Committee during the inquiry was whether broad powers to make law by Order in Council were constitutionally appropriate. The Committee noted An open letter to New Zealand’s people and their Parliament which outlined several serious concerns.³⁷⁸ These included that Ministers had the power to amend statutes while pursuing too-broad statutory purposes, that these powers were excluded from review by the courts and that people harmed by poor decisions would be ineligible for compensation. The authors of that letter considered the 2011 Act to be a poor precedent that was in danger of repetition. The Committee held there were valuable lessons to be taken from reactions to the 2011 Act:³⁷⁹

The Committee took a view on emergency powers generally consistent with its previous reports on transitional regulatory powers and Henry VIII clauses.³⁸⁰ The significance of those powers comes from a lack of scrutiny and accountability for the Executive that should be avoided unless “demonstrably essential” and subject to appropriate safeguards.³⁸¹ Although emergencies may make broader powers necessary in this way, it is their urgency that excuses rather than justifies the provision of powers that are normally not appropriate:³⁸²

These substantial concerns about the breadth of ministerial powers in the response to the Canterbury earthquakes led the Committee to state that a “sectoral” approach to national emergency powers should be preferred. Rather than legislating generically and in advance, the Committee concurred with the Law Commission that emergency legislation should be sensitive to the circumstances of the emergency being responded to. In particular, a general emergency response law should not confer a broad emergency regulation-making power. This is because a suitably general power would be inappropriately broad.

However, and following this logic, the Committee acknowledged the Law Commission’s view that it may not be possible to confer all necessary powers under a governing statute and making broad regulatory powers necessary. The first situation is where the consequences of a disaster are unforeseen and events unfold in an unexpected way. The second possible justification is where the nature of the emergency itself is unforeseen and it may be necessary to take extreme measures to counter it; war being the obvious example. Even in such cases the broad powers conferred would still need to be linked to specific limits such as the statutory purpose and fundamental rights.

On the basis of the above, the Committee expressed three general principles and made 11 recommendations related to what it considered to be the appropriate legislative response to a national emergency. The first principle, supporting four recommendations, was that executive powers to override enactments should extend only as far as necessary to deal with the emergency specifically and should only be exercised for that purpose. Although the 2011 Act had a reasonable form and started from an appropriate perspective, its powers to override enactments were broader than was necessary. The Committee considered that careful consideration of the types of legislation overridden was necessary to understand the proper scope for such powers, and that for some a truncated legislative process would be suitable instead of Executive regulation-making.

The specific recommendations were: that emergency legislation should be tailored to situations as they arise, and not passed in advance; the amount of time an emergency Bill was before select committees should be maximised; that there was no need for special- constituted committees; and that emergency powers should be conferred by statute over regulations in the first instance.

Second, comprising five recommendations, the Committee expressed the principle or theme that emergency legislation should include safeguards to protect constitutional values. In particular, the Committee thought that primary legislation should still be preferred to broad regulatory powers and that there should be a periodic renewal or sunset powers where such powers were available. Oversight mechanisms should include a competent review panel to advise the Minister on Orders in Council, and the ordinary availability of judicial review should be maintained. In particular:³⁸³

Some measure may be needed to prevent meritless, dilatory claims but the Committee viewed this as a question “in the eye of the beholder”.³⁸⁴ Properly constructed, it was likely that powers actually required to respond to emergencies would be broadly similar to ordinary powers, and where different treatment was justified that this would not exclude normal oversight mechanisms. The specific recommendations were: Henry VIII clauses in emergency legislation should be limited so as to only apply to limited lists of enactments stipulated in advance; Orders in Council should be subject to scrutiny before and after being made; rights to judicial review should not be limited; emergency legislation should conform to international standards; and that bespoke emergency powers should be in place only so long as necessary and subject to sunset clauses.

Third, supporting two recommendations, the Committee expressed the view that legislation designed for emergencies should seek to minimise a delay in response times. The Committee viewed this as an operational rather than legislative matter, and that existing institutions could perform that function. Relevant factors included preserving a chain of command and communication network, ensuring responders were changed, and making plans for the provision of supplies to those who could need it. These factors are, however, not regulatory in nature. The Committee recommended that the executive remain mindful of the needs of local communities, and that the responsible Minister should keep the House duly informed of their activities.

VI Affirmative Resolution Procedures

In a 2007 report, the Regulations Review Committee considered the growing use of the affirmative resolution procedure.³⁸⁵ As noted in Chapter 2, regulations may need to be approved by a formal resolution of the House. The affirmative resolution procedure is a hybrid form of legislating. Parliament delegates a regulation-making power to the executive, but the House of Representatives must then approve the use of that power before a regulation can have effect. The empowering Act will generally prescribe a 28-day period in which the House may scrutinise the power before it is allowed to give its approval, ensuring that scrutiny actually occurs and that the House does not immediately authorise the power without at least the prospect of debate.

Under the Legislation Act 2012, regulations subject to affirmative resolution procedures are not “disallowable instruments” and therefore do not presently fall within the Committee’s investigative ambit.³⁸⁶ However, this will be changed when the Legislation Act 2019 comes into force (all secondary legislation subject to disallowance, with limited exceptions).³⁸⁷

The Committee identified two ways the procedure has been used. First, it has been used in relation to delegated legislation that directly affects the Offices of Parliament. The Committee agreed with the submission of the Chief Parliamentary Counsel that this was an appropriate use of the procedure. The Committee agreed it was inappropriate that the executive could make regulations or a minister issue instructions affecting an Office of Parliament without the House’s knowledge and approval. The use of the procedure in the Public Finance Act 1989 was cited as a good example of this. Under the Public Finance Act, draft minister’s instructions regarding non-financial reporting to an Office of Parliament must be presented to the House and may not be issued until they have been approved by resolution of the House.

The second way the procedure has been used is as a procedural safeguard for Henry VIII clauses. Such clauses allow an Act (often the schedules to that Act) to be amended by regulation. The Committee has generally taken a dim view of the use of Henry VIII clauses, arguing they should only be used in situations not involving significant policy issues or in cases requiring extreme urgency. The Committee took the view that the use of the procedure - in, for example, the Misuse of Drugs Act 1975 - to amend lists and numbers in schedules could raise significant policy issues. It was concerned that such amendments undermine Parliament’s role as lawmaker, and blur the distinction between Parliament and the executive. The Committee was not convinced that the added protection provided by the affirmative resolution procedure was sufficient to allay its concerns about using delegated legislation to amend primary legislation. It was concerned that doing so might encourage inappropriate use of Henry VIII clauses and could reduce the level of public scrutiny and accountability that occurs in amendments through primary legislation.

In addition to the issues addressed above, the Committee identified a number of additional problems with the use of the procedure. First, one of the rationales of the procedure when it was introduced was that it would allow for the quick passing of legislation. The Committee found that, in practice, the process is no quicker than passing an Act under urgency, and in many cases, through the normal process. It noted that, as a matter of general principle, the latter course is more appropriate due to the additional public scrutiny and accountability it provides. Further, the Committee said the latter approach was appropriate even in urgent matters concerning public health and safety (a point which differed from its support in the interim report for the use of the affirmative resolution procedure in such circumstances).

Secondly, the Law Commission and the Chief Parliamentary Counsel noted that amendments to primary legislation using the procedure were subject to a higher risk of challenge by judicial review. The Committee was concerned the procedure might undermine parliamentary sovereignty. Under the doctrine of parliamentary sovereignty, amendments to acts through primary legislation are not subject to judicial review; however, amendments made by regulation are subject to judicial review, as courts have jurisdiction to consider delegated legislation.

Thirdly, the Committee noted a similar point made by the Chief Parliamentary Counsel that the procedure blurs the distinction between the process of making delegated legislation and the process of making acts of Parliament. Though regulations subject to the procedure receive parliamentary affirmation through a resolution of the House, this resolution is not in itself law, meaning regulations made in this way are not immune from judicial review. The Committee took the view that it was neither necessary nor desirable that the relationship between Parliament and the courts should be tested in this way.

Fourthly, the Committee agreed with the Chief Parliamentary Counsel’s submission that using the procedure in this way was administratively cumbersome because it required the use of two subordinate legislative instruments to achieve the desired result. Although the Committee was of the view the affirmative resolution procedure should not be used in conjunction with Henry VIII clauses, it said there may be other situations where delegated legislation dealing with matters of policy should be subject to affirmative resolution procedure. However, it did not provide any general principles of when this was appropriate, instead reiterating the general undesirability of using delegated legislation in this way.

Fifthly, the Committee raised two procedural concerns. Under the Standing Order the appropriate select committee has a maximum of 28 days to consider a resolution. While this quick turnaround period is a result of the need for the process to be expeditious, it limits the quality of the select committee’s scrutiny. The Committee noted that while this may not be a concern in relation to non-contentious issues, the time is insufficient in regards to policy matters on which public submissions would be desirable. Further, the appropriate select committee cannot recommend amendments to an Order-in-Council subject to the affirmative resolution procedure. This requires the rather inefficient process of a new Order- in-Council, a new notice of motion, and a further referral to the select committee.

The 2007 report ultimately made the following recommendations:

• The affirmative resolution procedure should not be used in conjunction with provisions that allow the amendment of primary legislation by delegated legislation.
• The affirmative resolution procedure is appropriately used to approve resolutions that specifically regulate the administration and governance of Offices of Parliament and parliamentary agencies.

The report also suggested that the Standing Orders Committee consider amending the Standing Orders so that:

• A select committee would have a minimum of three months to examine a resolution affirming regulations, rather than 28 days.
• Amendments recommended by a select committee, to which a notice of motion has been referred, would be incorporated without repeating the select committee process.

In its response to the recommendations, the government agreed in principle that the affirmative resolution procedure should not be used in conjunction with provisions that allow the amendment of primary legislation by delegated legislation.³⁸⁸ The government also agreed that the affirmative resolution procedure is appropriately used to approve resolutions that specifically regulate the administration and governance of Offices of Parliament and parliamentary agencies.

Though not formally required to do so, the government response also addressed the recommendations relating to the Standing Orders Committee.³⁸⁹ The government noted that an extension of the time for select committee approval had the potential to undermine the utility of the procedure where rapid change is necessary. Subsequently, the Standing Orders Committee was unable to agree on this proposal.³⁹⁰ The government agreed that allowing amendments recommended by a select committee, to which a notice of motion has been referred, to be incorporated without repeating the select committee process would enhance the affirmative resolution procedure. The standing order was amended to this effect.

VII Regulations-Making Powers That Authorise Treaties to Override New Zealand Enactments

During its examination of the Child Support (Reciprocal Agreement with Australia) Order 2000, the Regulations Review Committee encountered what it considered to be a concerning practice.³⁹¹ The order implemented an agreement between New Zealand and Australia making provision for inter-country payment for child support and spousal maintenance. Clause 4 of the order provided that the agreement had force and effect so far as it related to New Zealand, notwithstanding anything in the Child Support Act 1991 or in any other Act. Thus, the regulation effectively provided for the agreement to override any New Zealand enactment. This ‘overriding treaty regulation’ was yet a further example of a Henry VIII clause. Having received advice that this was not a unique situation, the Committee undertook a broad inquiry into the practice.

It considered the circumstances in which overriding treaty regulations are used, and whether they can ever be considered appropriate. The Committee identified a number of general principles that should govern their use.

First, the Committee found that of the approximately 700 Acts of the New Zealand Parliament then in force, 10 implemented a treaty by regulation, while at the same time authorising the regulations to override primary legislation. Of these 10 Acts, two implicitly authorised the overriding of the principal Act, four explicitly authorised the overriding of the principal Act, while a further four explicitly allowed the overriding of any Act (ie not just the principal Act).

Secondly, the Committee said that overriding treaty regulations are best avoided on account of the dangers presented by Henry VIII clauses endorses the submission of the Solicitor-General on this point. The Committee drew on its 1995 report into Henry VIII clauses, which had recommended that such clauses be used only in exceptional circumstances and that they should be drafted in the most limited and specific terms possible.³⁹² It also acknowledged concerns expressed by some submitters that overriding treaty regulations could potentially overrule fundamental protections offered by core statutes such as the New Zealand Bill of Rights Act 1990. Accordingly, the Committee recommended to the government that overriding treaty regulations be used only in exceptional circumstances. The Committee did nevertheless acknowledge that there may be two situations in which an overriding treaty regulation might be permissible. The first was when a treaty dealt with technical matters that had a very narrow application. The Committee felt that there would be few such situations. The second permissible use was in an emergency situation, or where the requirements imposed on New Zealand by a treaty changed rapidly. All the same, the Committee expressed a preference that Parliament pass a bill under urgency to deal with such situations.

Thirdly, the Committee considered the limits that should apply to the creation and use of overriding treaty regulations. It said regulation-making powers authorising overriding treaty regulations should be drafted so as to ensure the authority delegated has precisely defined limits. Only the empowering Act should be capable of being overridden. Only where absolutely necessary should Acts beyond the empowering Act be liable to being overridden. Further, regulation-making powers should only allow for the overriding of minor and/or technical provisions of a New Zealand statute. The Committee noted that these types of regulations are automatically subject to disallowance under the Regulations (Disallowance) Act 1989 (and now under the Legislation Act 2012). It also identified other methods by which Parliament could affect additional scrutiny, including various positive and negative means of affirmation and recommended that some method of additional parliamentary scrutiny be included in any bill that contains a regulation-making power permitting an overriding treaty regulation. As part of this, it recommended the ‘national interest analysis’ (an analysis that must be undertaken pursuant to Standing Orders outlining the rationale of the treaty, as well as costs and obligations) should include a justification of why a regulation-making power authorising an overriding treaty regulation is considered necessary.

VIII Commencement of Legislation by Order in Council

In New Zealand legislation usually commences either:

• on the day the bill receives the Royal Assent;
• on a fixed date in the bill;
• on a date to be fixed by the Governor-General by Order in Council; or
• a combination of the above, i.e. some parts of a bill will come into force on a fixed date or the date the bill receives the Royal Assent, and some parts will come into force on a date fixed by the Governor-General.

The Committee has investigated the commencement of legislation by Order in Council on a number of occasions.

A 1996 Report

In a 1996 report, the Committee noted that this issue is a significant one because Parliament, having passed a particular piece of legislation, effectively hands over a critical power to the executive, namely the power to decide when and if a particular piece of legislation should come into force.³⁹³

The Committee noted that the practice of commencing legislation in this way is growing in New Zealand, with no limits or controls as to the timing of the advice to the Governor-General that a particular piece of legislation should be commenced. Concern was also expressed that Parliament may not always realise that it is handing over such a significant power to the Executive Council. Finally, the Committee noted that there could exist issues of access to the law in situations when it is unknown when a law will come into effect. The Committee stated that as a principle, people should be entitled to know the particular date upon which laws will come into force.

The Committee recognised that there are arguments in favour of the commencement of legislation by Order in Council. Firstly, complex legislation may take time to implement and only the minister will be in a position to know when a provision is ready for commencement. Secondly, changes may be needed to the commencement date in a bill when legislation passes through Parliament. Commencement by Order in Council reduces the need for the correction of this date. Thirdly, the actual passage of legislation may be required to focus the relevant departments and organisations on the provisions and policies needed to implement the legislation. Passing the bill (but not necessarily bringing it into force) may have this effect.

The Committee also identified a number of disadvantages that can result from the commencement of legislation by Order in Council. The overriding concern is that the Executive Council may thwart the will of Parliament by not commencing the legislation at all. It further allows the executive to delay the implementation of a law that is contrary to the wishes of a government department or agency. The Committee also expressed concerns at the potential for ‘window-dressing’ and ‘blackmail’. In the former, Cabinet may allow a particular Act to pass through Parliament in order to appease a particular group with no intention of implementing the proposal. The possibility of blackmail may occur if the government only recommends a commencement order on the condition that a particular member of Parliament or group behave in a certain way. In the view of the Committee, these risks increased under MMP, where the views of the executive and Parliament are more likely to be in conflict with each other.

The Committee made the following major recommendations at the conclusion of its report.³⁹⁴

• As a general rule, legislation should incorporate a fixed commencement date.
• Provisions for the commencement of legislation by Order in Council should be used only in rare and exceptional circumstances.
• If a fixed commencement date is not incorporated in a bill, the bill should incorporate a provision that it be brought into force automatically after a specified period of no more than one year following its enactment.
• If a commencement date is to be set by Order in Council, the reason for this be included in any explanatory memorandum accompanying the bill and be considered by the select committee considering the bill.
• When legislation is commenced by Order in Council, it must come into effect at least 28 days after notification in the Gazette to ensure people have time to familiarise and adjust to the coming into effect of the new law.

In its response, the government agreed that as a general principle the commencement of legislation enacted by Parliament should not be delegated to the executive, but that there are cases where it is necessary to do so. While agreeing that commencement by Order in Council should be rare, the government observed that, for certain types of legislation, commencement by Order in Council is essential, for instance when legislation ratifying a treaty must be commenced at a future and as yet unknown date. The government proposed that:

(1) the Cabinet Manual be amended to indicate that, as a general principle, bills should not incorporate provisions for commencement by Order in Council; and

(2) that the cover sheet for draft bills must set out whether the proposed bill includes provision for commencement by Order in Council and the reason for the provision.

The government did not accept the automatic one-year recommendation on the basis that a blanket rule would undermine the purposes behind having legislation commenced by Order in Council. The government accepted that reasons for setting a commencement date via Order in Council should be included in explanatory notes to government bills. The government did not accept the recommendation of a 28-day delay in commencement following notification in the Gazette. It opposed legislative recognition of the administrative rule and considered that recognition of a 28-day delay in the Cabinet Manual allows a degree of flexibility where required.

B 2002 Report

In 2002, as part of an investigation into the Local Electoral Act Commencement Order 2001, the Committee reiterated the principles that should apply to the commencement of legislation by Order in Council:³⁹⁵

• As a general principle, the commencement of legislation should not be delegated by Parliament to the executive.
• Provisions for the commencement of legislation by Order in Council should not be included unless they are clearly justified.
• If a commencement date is to be set by Order in Council, the reason for this should be included in any explanatory memorandum accompanying the bill.

The Committee also set out several principles that relate to the making of the Order in Council itself:³⁹⁶

• When an Order in Council is used to commence legislation, it should, wherever possible, be used in a way consistent with the government’s explanatory note to the bill in which the empowering provision was introduced to Parliament;
• Where the power to commence legislation by Order in Council is to be used, this should be done in accordance with the expectations of Parliament; and
• The government should develop a timeframe for commencing each enactment or provision that is to be brought into force by Order in Council.

C 2009 Reports

In 2009 the Committee once again investigated the use of commencement of legislation by Order in Council in the following (with its reports reiterating the principles set out in its 1996 and 2002 reports):

• Securities Amendment Act 2002 Commencement Order 2009 (SR 2009/10);³⁹⁷
• Copyright (New Technologies) Amendment Act 2008 Commencement Amendment Order (No 2) 2009.³⁹⁸

In its investigation into the Securities Amendment Act 2002 Commencement Order 2009, the Committee took the view that the length of time between the enactment of section 25 of the Securities Amendment Act 2002 and the order bringing it into force (approximately six and half years) was unacceptable. It recommended that the government take note of the report and “ensure that any delegated power to commence legislation is exercised in a timely manner, so as to not frustrate Parliament’s decision to make law.”

The government response agreed that, for the reasons set out by the Committee, “delegated powers to commence legislation should be exercised in a timely manner.”³⁹⁹ It went on to note, however, that in its view current safeguards (including the requirement that, as a matter of Cabinet’s procedure for approving the introduction of bills, the use of a commencement order in relation to a bill must be justified to Cabinet and the reasons set out in the bill’s explanatory memorandum) were sufficient.

In its investigation of the Copyright (New Technologies) Amendment Act 2008 Commencement Amendment Order (No 2) 2009, the Committee took the view that the Order, which amended previous commencement orders and delayed the commencement of s 92A of the Copyright Act 1994 without specifying a new commencement date, did not represent good law-making practice. It noted that while there may have been policy concerns about implementing section 92A:⁴⁰⁰

Accordingly, it recommended that reconsideration of section 92A be returned to the Parliament.

The government response stated that the government had acted on the Committee’s recommendations by introducing a bill to the House proposing the repeal of section 92A of the Copyright Act 1994, and the amendment of Part 6 of the Act to provide new enforcement measures for copyright owners against illicit file sharing.⁴⁰¹

D 2014 Comments

In 2014, the Committee noted that there had been a substantial increase in the number of pieces of legislation set to be commenced by Order in Council.⁴⁰² By reference to its previous reports as well as the Legislation Advisory Committee guidelines, the Committee restated the principles it considered were applicable to commencement via Order in Council:

• As a general principle, legislation should incorporate a fixed commencement date;
• Provisions for the commencement of legislation by Order in Council should be used only in rare and exceptional circumstances;
• If a fixed commencement date is not included, bills should include provisions by which they are automatically brought into force after a specific period of no more than one year following enactment, unless brought into force earlier by Order in Council; and
• The reasons for any bill requiring commencement by Order in Council should be included in the bill’s explanatory memorandum and considered by the Select Committee considering the bill.

E 2016 Comments

In 2016, the Committee again expressed concern with Acts being commenced by Orders in Council. Four Bills included provisions that the resulting Act would commence on a date set by an Order in Council. In particular, four clauses of the Food Safety Law Reform Bill were to be commenced by an Order in Council. The explanatory note provided that this delayed commencement would enable regulations to be made. The Committee found, however, that these clauses contained no fall-back commencement dates and that no explanation was given justifying the delay being open-ended. The Committee recommended that a fall-back date be inserted. The Primary Production Committee accepted these recommendations.⁴⁰³

IX Material Incorporated by Reference

Occasionally, legislation will give legal effect to the provisions of a document without repeating those provisions in the text of the incorporating legislation. Examples include international treaties, foreign government technical standards, private sector industry standards and codes of practice, and manufacturers’ specifications. Incorporating material in this manner is more common in delegated legislation than in primary legislation.

The Regulations Review Committee has issued two reports concerning material incorporated by reference. In its 2004 report, the Committee considered the desirability of this practice, as well as possible areas for improvement.⁴⁰⁴ In its 2008 report, the Committee considered copyright issues in relation to the accessibility of material incorporated by reference.⁴⁰⁵ The Committee’s findings in each report and the associated government response, including the changes made in the Legislation Act 2012, are discussed below.

A 2004 Report: Desirability of Incorporation by Reference

The 2004 report considered the desirability of incorporating material by reference, as well as possible areas for improvement. The Committee noted that incorporating material by reference did have its benefits, including utilising existing standards and avoiding the repetition of large amounts of technical material. However, these benefits had to be balanced against a number of other factors. First, by incorporating material by reference, Parliament devolved its law-making powers to bodies outside its control. Secondly, incorporated material is not subject to parliamentary scrutiny. Thirdly, the protections that exist with the making of primary and secondary legislation are largely absent. Nor are there any guarantees that there will have been adequate consultation. Finally, obligations imposed by the material may not be clear, while access may be problematic.

The Committee then considered the circumstances in which incorporation by reference was acceptable. In an earlier report on deemed regulations, the Regulations Review Committee had identified a number of general principles that should apply to the incorporation of material by reference via deemed regulations:⁴⁰⁶

• The power to incorporate material by reference should be expressly authorised in the empowering statute.
• This power should be exercised in a limited number of cases where the document is appropriate for that purpose.
• The material should be technical in nature, impose clear obligations, be written in text of an official language of New Zealand, and be readily available.
• The material should clearly state that it has been incorporated into New Zealand law.

In response, the Legislation Advisory Committee was asked by the government to produce a set of guidelines as to the appropriate use of incorporation by reference. The guidelines produced were consistent with those of the Regulations Review Committee. Two in particular are worth noting:

• Incorporation by reference should only be used where it is impracticable to do otherwise (this constitutes a noticeably high standard).⁴⁰⁷
• Standard clauses be used in Acts and delegated legislation that authorised incorporation. Amongst other things, these clauses contained a requirement that material incorporated by reference be made available for free on the Internet.

The Regulations Review Committee received advice from the Chief Parliamentary Counsel that standard incorporating clauses had since been employed. The Committee strongly endorsed this practice and said that it expected standard clauses to be used in most instances.

In a survey of government agencies, the Committee also found that the level of incorporation by reference was significant, particularly in the area of transport law. It noted that a number of scrutiny mechanisms did exist, including the participation by government entities in standard-setting, the use of international experts and organisations, some statutory consultation and public access requirements, inter-agency consultation and consistency with key New Zealand legislation (for example the New Zealand Bill of Rights Act 1990) in accordance with Cabinet Office procedure. While acknowledging that some of these protections could apply in any given case, the Committee recommended that “a comprehensive and consistent approach” should be adopted, “with all agencies applying similar standards and practices.”⁴⁰⁸

Concerned about the proliferation of incorporation by reference, the Committee recommended that the Cabinet Manual and associate protocols be amended so that the forms accompanying draft bills stated whether the bill included any material incorporated by reference and whether the proposed legislation complied with the LAC guidelines. The Committee also recommended that, when existing Acts are reviewed and amended, they be changed to ensure consistency with the LAC guidelines. Furthermore, it recommended that draft regulations that propose incorporation by reference be forwarded to the Regulations Review Committee where there are any issues of concern regarding the incorporation.

In its response, the government agreed with most of the Committee’s recommendations.⁴⁰⁹ In particular, it agreed that the Step by Step Guide and the Cabinet Manual be amended so that submissions accompanying bills indicate whether any material was being incorporated by reference and, if so, confirming that the Legislation Advisory Committee guidelines have been complied with. It also agreed that, where possible, existing Acts that provided for incorporation by reference be amended to ensure consistency with those guidelines. It supported the idea that draft regulations that incorporate material by reference be referred to the Regulations Review Committee where there are concerns regarding the application of the guidelines. The government rejected the Committee’s recommendation that a centralised government website be established providing links to the government agency sites that contain material incorporated by reference.

Material incorporated by reference is also addressed in the Legislation Act 2012. Part 3 of the Act enshrines many of the Committee’s recommendations. Section 49 of the 2012 Act sets out the relatively broad yet constrained set of material that may be incorporated by reference, particularly (as the Committee recommended) that of a technical nature. Sections 51 and 52 provide relatively strict requirements regarding departments’ responsibilities as to the availability of material incorporated by reference to the public, both before and after the making of the legislative instrument concerned and both in person and over the Internet. Also included in these sections is the requirement that the material be written in an official language of New Zealand. Furthermore, original copies of material incorporated by reference must be retained by the chief executive of the relevant department at all times.⁴¹⁰ In addition, any amendment to the incorporated material by its author will not amend the legislative instrument unless the author’s amendment is specifically incorporated by another legislative instrument.⁴¹¹

Parent Acts may, however, exempt legislative instruments from the above requirements. This must be done expressly, and it is expected that the Committee would raise any issues regarding exemptions were it to review the legislation in question. Moreover, all instruments containing material incorporated by reference are automatically designated as disallowable instruments and are thus subject to the Committee’s investigative ambit.⁴¹²

B 2008 Report: Model Clauses and Copyright

The Committee’s 2004 report endorsed the use of standard clauses where any new bill contains material incorporated by reference. Model clauses, drafted by the Parliamentary Counsel Office, were published in an appendix to the 2004 report and contained a requirement that material incorporated by reference be made available for free on the Internet. This was considered an appropriate means of ensuring public access to the law. However, after the 2004 report, it came to Committee’s attention that third parties often hold the copyright in material incorporated by reference. Therefore, making such material available for free on the internet could potentially breach the copyright interests of third parties. The 2008 report considered the appropriate means of addressing the tension between public access to material incorporated by reference, and the need to protect the interests of copyright holders.⁴¹³

The Committee took the view that, in general, the Internet remained the appropriate means of providing public access to material incorporated by reference. However, in order to address the copyright issues relating to this practice, it adopted the following recommendations of the Legislation Advisory Committee:

• The Legislation Advisory Committee Guidelines be amended to explicitly alert readers to the potential copyright problems presented by requiring material incorporated by reference to be made available on the Internet. The guidelines should give alternatives to mandatory publication, and criteria for varying the mandatory publication requirement.
• The model clauses published in the 2004 report, and clauses reflecting alternatives to mandatory publication, should be incorporated into the Legislation Advisory Committee Guidelines.
• Reports to Cabinet on legislation that proposes to permit incorporation by reference be required to address any copyright issues, along with the proposed means of making the material available to the public if Internet publication is not practical because of copyright issues.
• The model clauses published in the 2004 report be enacted in a statute of general application such as the Interpretation Act 1999, so that they need not be re-enacted each time they are required.

The government agreed with first two recommendations, namely that the Legislation Advisory Committee Guidelines be amended to address copyright problems, and that the model clauses be incorporated into those guidelines. It did not support the third recommendation that reports to Cabinet address any copyright issues. The government took the view that it was inappropriate to include the suggested level of detail in the CabGuide or in Cabinet templates, especially as proposals to Cabinet are already required to comply with Legislation Advisory Committee guidelines. The government was satisfied that amendments to the guidelines in accordance with recommendations one and two would ensure policy- makers consider the copyright issues raised by the Committee. Finally, the government agreed that the model (or similar) clauses published in the 2004 report be enacted in a statute.

The Committee’s subsequent recommendations in relation to copyright were addressed by the Legislation Act 2012. Under sections 51(1)(c) and 52(2)(c) of the Act, when regulations incorporating material by reference are made, there is a presumption that the relevant chief executive must make that material available for free over the Internet, via a website administered by the relevant department. However, sections 51(3) and 52(4) create an exception to this requirement, providing that chief executives may, if necessary, establish an Internet link between the relevant department’s website and a location where the materials are hosted free of charge by someone who has the copyright in them, thereby circumventing attribution issues. Sections 51(6) and 52(7) of the Act also specifically prevent chief executives from using section 66 of the Copyright Act 1994 (which legitimises breaches of copyright by statutory authority) to justify their actions under these sections. If departments simply cannot make material incorporated by reference available for free online (either on their own website or via hyperlink) for copyright reasons, then sections 51(1)(c) and 52(2)(c) exempt them from the requirement that this occur. Even when provision of the material for free over the Internet would constitute a breach of copyright, the material will still be available to the public in person on request from the head office of the department concerned (as well as any other place the relevant chief executive chooses), under sections 51 and 52 of the Act.

C 2013 Report: Costs

In its 2013 Activities Report, the Committee noted its concerns regarding the costs surrounding standards incorporated by reference.⁴¹⁴ When considering the Energy Efficiency (Energy Using Products) Amendment Regulations 2013, the Committee found that the standards incorporated into law by reference to these regulations were not available online free of charge. Instead, users of the particular standards were required to either view those standards in person or purchase copies from Standards New Zealand at a cost. This was found to be true of a large number of other standards incorporated by reference in regulations.

The Committee acknowledged the financial limitations within which government departments and agencies were operating. It remained concerned, however, that users of the standards concerned would be required to pay to access the law. This was particularly so given the general increase in the number of standards incorporated by reference over time, which in 2013 stood at 1,186 standards in 238 different documents held by 19 different regulators.⁴¹⁵

The Committee stated that charging the public to access the law was “less than ideal” and that although there was no obvious solution to the problem, it would continue to monitor the situation.⁴¹⁶

X Currency of Existing Regulations

Those regulations in force must be current. In other words, regulations should not remain in force if they serve no purpose, and in particular where their empowering statute has been repealed and there is no replacement act, or where it is known that no replacement act is intended to carry them over.

The Committee reported on the currency of all regulations in force at the time in its “Inquiry into the ongoing requirement for individual regulations and their impact”. The only other time such a review had taken place was in 1988. The Committee has undertaken ad hoc reviews in the currency of all regulations in force in 1998 and 2007.⁴¹⁷ In its 2007 review, it found, amongst other things, that of the approximately 2,943 regulations in force, 526 served no purpose and should be revoked.⁴¹⁸

The Committee also addressed the need for a systemic currency review process. The Committee was concerned by the large number of spent regulations remaining in force. It attributed the number of spent regulations remaining in force to a lack of ongoing departmental review, but noted that this was not the case for all departments, some having sophisticated regulatory review regimes in place.

The Committee recommended the use of sunset clauses, whereby regulations expire on a prescribed date, to address currency problems. It was of the view that sunset clauses would force agencies to examine their regulations within the expiry period and assess whether they needed to be remade. It referred to the Legislative Instruments Act 2003 in Australia that automatically imposes a sunset period on all regulations from the day they are registered. It agreed with the Legislation Advisory Committee’s recommendation that 10 years was the appropriate expiry period, but rejected its suggestion of a ten-year roll over period. Instead the Committee suggested a 1 year rollover period upon certification by the Attorney-General. Whilst the purposes of a rollover period were to allow regulations that were obviously required to remain in force, and to avoid inadvertent expiry, a more limited rollover period was considered necessary to avoid the risk of departments not sufficiently engaging in the review process and relying on the rollover process to continue regulations. The Committee recommended the report be referred to the Law Commission for the development of a detailed proposal for the inclusion of a sun-setting system, applicable to all statutory regulations, in a statute. Furthermore, it recommended that statutory provision be made reflecting the Committee’s recommendations and any detailed proposal made by the Law Commission.

The Committee identified a number of other options for ensuring the currency of regulations but rejected these in favour of the use of sunset clauses.⁴¹⁹

In addition to considering the appropriate mechanism for review, the Committee considered whether all regulations should be required to state their purpose. The rationale for this was that a regulation can only be declared redundant following the assessment of its original purpose. The Committee concluded this was unnecessary as a general rule, because the purpose of a regulation is ordinarily ascertainable from the empowering Act and the empowering provision. The Committee noted that where this was not the case, Cabinet papers and other policy documents provided an alternative source for determining purpose. However, it stated that it was still desirable for departments to consider the utility of stating the purpose of regulations on a case by case basis.

The Committee also made two other recommendations to address the underlying causes of spent regulations remaining in force:

• the production of a comprehensive register of departmental responsibility for all regulations; and
• changes to the Cabinet processes to ensure that spent regulations are repealed when primary legislation is repealed.

The first recommendation arose from the apparent confusion concerning which department was responsible for some regulations. Though the responsible department is listed at the end of the original regulation, the administering department may have changed, been replaced, or responsibility been transferred. The Committee attributed this in part to the lack of an official current record of departmental responsibility for regulations. To address this problem, it recommended a publicly accessible list of departmental responsibility be produced and maintained for all regulations.

The second recommendation arose because a number of spent regulations were not specifically revoked when the empowering act had been repealed and was not replaced, or there was no other act intended to carry those regulations over. The Committee recommended the section of the CabGuide headed “Associated regulations” be amended to require any Cabinet paper associated with a proposal for a bill to list all existing regulations that could be revoked by the bill.

In its response, the government considered that further evaluation of the Committee’s recommendations in relation to systematic review was necessary before any decision was made. Although this work has not yet been carried out,⁴²⁰ it directed the Ministry of Justice, in consultation with the Parliamentary Counsel Office and other appropriate government departments, and in collaboration with the Law Commission, to provide further guidance to Cabinet on the inclusion of a sun-setting system, applicable to all statutory regulations, in a statute, and the implications of such a system on departmental resources and Parliamentary Counsel Office law drafting resources.

The government agreed with the Committee that the regulations identified by the Committee as spent should be revoked. In relation to the Committee’s recommendations concerning a publicly accessible list of departmental responsibility, the government supported undertaking further work to investigate the desirability and feasibility of implementing this recommendation. In relation to the suggested amendment to the “Associated regulations” section of the CabGuide, the government supported the undertaking of further work to determine the practical implications of implementing this recommendation. The Ministry of Justice and Parliamentary Counsel Office were to undertake this further work in consultation with other government departments, including the Cabinet Office, and in collaboration with the Law Commission.

XI Regulatory Impact Statements

In the 2007 report on the ongoing need for individual regulations and their impact addressed in the previous chapter, the Committee also reviewed the requirements for regulatory impact statements and business compliance cost statements, and the exemptions from these requirements.⁴²¹ The Cabinet approval process for new regulations requires departments to undertake a regulatory impact analysis, and publish its findings in a regulatory impact statement. A regulatory impact analysis requires the relevant department to consider the impact of the regulation on a range of outcomes, including economic, social, cultural, health, and environmental outcomes. Business compliance costs, previously considered separately in a business compliance cost statement, are now considered as a part of the regulatory impact analysis. Regulations may be exempted from regulatory impact assessment on limited grounds.

In the Committee’s experience, both regulatory impact statements and business compliance cost statements were useful when considering whether there were grounds under Standing Order 327 (2) to draw regulations to the attention of the House. It noted that some regulations that were the subject of upheld complaints would have benefited from the rigour of developing regulatory impact statements. Furthermore, the use of regulatory impact statements in relation to regulations that impose fees and charges was useful because it required a rigorous cost-benefit approach to fee-setting.

At the time the review began, a regulatory impact statement or business compliance cost statement was not required for:

• deemed regulations;
• regulations of a minor or mechanical nature that do not substantially alter existing arrangements;
• costs impacting on charities; and
• increased costs where there is no new fee or business obligation.

The Committee noted the excepted categories of regulations represented a significant number of regulations, and it was thus necessary to consider whether these exceptions were justified in light of the advantages conferred by a regulatory impact analysis.

Since the review was initiated, the regulatory impact analysis exemption has been amended so that all regulations that require Cabinet approval trigger a regulatory impact analysis. As noted in Chapter 3, deemed regulations are included in the definition of disallowable instruments in the Legislation Act 2012, meaning those deemed regulations requiring Cabinet approval are no longer exempted. The Committee supported this change because regulations requiring Cabinet approval were likely to address policy issues affecting a broad spectrum of the population, making it appropriate for the regulatory impact analysis process to apply.

Initially the Committee was of the view that deemed regulations setting fees and charges that were not subject to Cabinet approval would also benefit from a regulatory impact analysis. The Committee raised the same concern in relation to other exempted fee-imposing regulations, particularly those of a minor or mechanical nature. However, following discussions with the Regulatory Impact Analysis Unit, the Committee accepted that the appropriate standards for measuring regulations setting fees and charges could already be found in the Treasury and Audit Office guidelines.

Despite the Committee accepting that the Treasury and Audit Office guidelines provide appropriate standards for setting fees and charges, it was concerned that too many regulations imposing significant costs were escaping the regulatory impact analysis process on the minor or machinery nature exemption. The Committee raised the possibility that claimed exemptions from a regulatory impact analysis process be policed by the Regulatory Impact Analysis Unit.⁴²² The Unit disagreed, instead emphasising the self-regulatory nature of the regulatory impact analysis system. Under this model, the Regulatory Impact Analysis Unit focuses on areas likely to significantly impact upon economic growth, while imposing safeguards for ensuring compliance with regulatory impact analysis requirements. The main safeguard is the requirement departments publish their regulatory impact statements. This requires confirmation to Cabinet that regulatory impact statement requirements, including the code of good regulatory practice, have been complied with. Furthermore, the Unit audits completed regulatory impact statement documents. The Committee accepted this approach, but said it was unclear whether the Unit’s audit function extended to the claiming of exemptions from the regulatory impact statement process. It recommended the audit function included proposals claiming the exemption. The Committee also recommended clear guidelines be provided for the application of the exemption criteria, with the aim of ensuring matters with significant cost implications for the public are not exempted from regulatory impact assessment.

The last issue addressed by the Committee was whether business compliance cost statements treated costs to charities in fee-setting regulations as business costs. As noted, the business compliance costs are now included in regulatory impact statements. The Committee found that charities are not treated as businesses for the purpose of compliance cost analysis, but are in terms of the broader social impacts of regulation. The Committee recommended charities be treated in the same manner as businesses for the purposes of analysing compliance costs in a regulatory impact statement.

The government agreed with all the Committee’s recommendations, and noted that they had already been implemented. However, in relation to the treatment of charities for the purpose of analysing compliance costs, the government considered the interests of charities and similar individuals or organisations were adequately addressed by the regulatory impact analysis requirements. The government also asked the Regulatory Impact Analysis Unit to consider amending existing guidelines to ensure that assessing compliance costs on all affected parties (including charities) was included in the analysis, as a part of its programme of developing and distributing further guidance material to departments. The Regulatory Impact Analysis system has been significantly amended since this report.⁴²³

XII Instruments of Exemption in Primary Legislation

Instruments of exemption formally release individuals or classes of people and things from the obligation to comply with legislative requirements. For example, section 47 of the Maritime Transport Act 1994 allows the Director of Maritime New Zealand to exempt any person, ship, or maritime product from any specified requirement in any maritime rule. The Committee inquired into the use of such instruments because of its concern that, in some cases, exemptions “have been so numerous and applied so broadly that the exemptions have supplanted the framework of rules to which they relate.”⁴²⁴

The Committee’s 2008 inquiry into the use of instruments of exemption in primary legislation sought to establish a set of principles to govern the appropriate use of exemptions. Furthermore, it sought to clarify the status of exemption instruments for the purposes of the Regulations (Disallowance) Act 1989.

In general terms the Committee examined the following two issues:⁴²⁵

• When are instruments of exemption regulations under the Regulations (Disallowance) Act 1989?
• What are the principles governing the appropriate use of exemption-making provisions?

Whether or not an instrument of exemption falls within definition of regulation in the Regulations (Disallowance) Act has important consequences. Those instruments falling within the definition of regulation in the Act are susceptible to, amongst other things, Regulations Review Committee scrutiny and the application of the disallowance procedures set out in the Act. Further, all instruments to which the Regulations (Disallowance) Act applies must be tabled before the House.⁴²⁶

The Committee took the view that there was a lack of clarity about whether some exemption notices were regulations for the purposes of the Regulations (Disallowance) Act. Exemptions notices in the form of regulations made under an Act by the Governor-General in Council or by a Minister of the Crown are a clear example of an instrument of exemption covered by paragraph (a) of the definition of regulation in the Act. However, the status of other forms of exemption instrument is not always as clear. Paragraph (b) of the definition of regulation in the Act states that an instrument that “varies or extends the scope or provisions of an enactment” is a regulation, whether or not it is made by Order in Council.⁴²⁷ The Legislation Advisory Committee suggested that instruments of exemption occupy a sliding scale: at one end, it placed minor concessions to individuals or bodies that have a minimal or no impact on the scope of an Act and are administrative in nature; at the other, instruments that are legislative in nature and that clearly and significantly extend or vary the scope of an Act. The Legislation Advisory Committee took the view that the latter fall within the definition of regulation in paragraph (b). In contrast, the New Zealand Law Society distinguished between specific and general exemptions, the former type of exemption applying to a particular transaction, event, or entity not fitting within the general law, the latter more widely to the general public. The Law Society took the view that those exemptions applying to the general public be regarded as regulations under paragraph (b).

In determining whether the Regulations (Disallowance) Act should apply to an instrument of exemption, the Committee adopted the two-stage test suggested by the Legislation Advisory Committee. First, does the instrument fall within the definition of regulation in the Regulations (Disallowance) Act? Secondly, is the instrument legislative in nature? For instance, does it affect a large group of people, and is it of a continuing nature? The Committee rejected the Parliamentary Counsel Office’s suggested approach of going directly to the question of legislative character (in accordance with the test set out in Cabinet Office Circular CO (O8) 4).⁴²⁸ The Committee concluded this test was too narrow, stating it “would exclude exemptions for individuals or narrow classes of person even if they extend the scope or provisions of an enactment.”⁴²⁹ The Committee expressed concern that this may lead to some exemptions varying or extending the scope of an enactment not being subject to parliamentary scrutiny. Ultimately, the Committee recommended that once a decision was made as to whether an exemption instrument was a regulation under the recommended test, the empowering provision should explicitly state whether or not the exemption instrument is subject to the Regulations (Disallowance) Act.

The Committee also considered the broader question of the desirability of the disallowance procedure applying to all exemption instruments. It concluded that the procedure should only apply to those instruments falling within the test suggested by the Legislation Advisory Committee. It rejected the submission by some departments that exemptions given to individuals should not, as a general rule, be subject to the disallowance procedure. The departments argued that individuals and departments go through the exemption process in good faith and make commitments following the granting of an exemption. The Committee took the view that: (a) in general, exemption decisions are already susceptible to a degree of external scrutiny through judicial review; and (b) the transparency provided by parliamentary scrutiny would be particularly useful in relation to exemptions providing a competitive advantage.

In relation to the principles governing the use of exemption making provisions, the Committee recommended that the key principles and the recommendations of the Legislation Advisory Committee noted in its report be reflected in the Legislation Advisory Committee Guidelines and, where applicable, the Guide to Cabinet and Cabinet Committee processes. In addition, the Committee recommended that where the power to make an exemption is supplemented by a power to impose conditions, any conditions must be consistent with the objects of the empowering Act and no more onerous than the requirements they replace.430

Two issues addressed in these recommendations warrant further discussion. First, the Committee considered what criteria ought to be attached to the exercise of an exemption- making power. It noted that the criteria differ depending on the different requirements from which exemptions may be given. It concluded that, at a minimum, there should be an express requirement that granting the exemption is consistent with the objectives of the empowering Act, and ideally there should be further guidance.

Secondly, the Committee considered whether all exemption instruments ought to be published. It concluded that it was not appropriate for all exemptions to be published. It accepted the Legislation Advisory Committee’s suggestion that, as a general rule, exemptions of general application or of significant or wide-ranging effect should be published in the Statutory Regulations series. However, in other cases, publication in the Statutory Regulations series may not be appropriate. For instance, exemptions applying to individuals should not normally be published as statutory regulations. Where publication in the Statutory Regulations series is inappropriate, other means of publication may be used - for instance, publication in the Gazette, in industry publications or on the internet. In other cases, exemptions are too trivial, too private, or too commercially sensitive to be published at all.

Apart from adopting the key recommendations and principles of the Legislation Advisory Committee in its recommendations, the Committee made a recommendation concerning exemption powers which include the power to impose terms and conditions. The Committee concluded that such a power be subject to an express statutory limitation. It recommended that an appropriate limitation was that any condition should be consistent with the objects of the empowering Act and no more onerous than the original requirement in the legislation.

In relation to the recommendation that the Legislation Advisory Committee Guidelines, and where applicable the Guide to Cabinet and Cabinet Committee processes (now known as the Cabguide), be amended in accordance with the key principles and the recommendations contained in the Legislation Advisory Committee’s submission, the government response invited the Legislation Advisory Committee to consider whether to amend its guidelines accordingly.⁴³¹ The government took the view that it would not be appropriate to include the level of detail contained in the key principles and recommendations in the Guide to Cabinet and Cabinet Committee processes. The government did not substantively respond to the other two recommendations (relating to the appropriate test determining whether an exemption instrument is a regulation for the purposes of disallowance, and the appropriate limitations on an exemption-making power containing the power to impose terms and conditions). Instead, it took the view these recommendations related to the quality of regulations more generally and should be addressed in the context of the government’s regulatory reform programme.⁴³²

The Legislation Advisory Committee largely adopted these suggestions its Guidelines.⁴³³ In addition, the Legislation Act 2012 contains amendments to over 100 existing Acts in its schedule. Many of these amendments clarify whether or not exemptions made under these Acts are legislative or disallowable instruments; and whether or not they fall within the Legislation  Act’s  disallowance procedure. Given the Regulation Review Committee’s difficulty in ascertaining the status of exemptions made under these Acts in its 2008 inquiry, this development may alleviate some of the issues raised in that inquiry.⁴³⁴

The Legislation Guidelines state that that the power of exemption should be subject to the following safeguards:⁴³⁵

• consistency with the purpose of the empowering Act;
• clear criteria for the exercise of power;
• a requirement to give reasons;
• an ability to seek judicial review of the exercise of an exemption power; and
• a process to review exemptions and ongoing need for the exemption power at regular intervals.

In additions, statutory sunsets or review clauses, and annual reporting requirements may also be appropriate.

In considering the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill the Committee expressed concern with its exemption creating powers. Clauses 200 and 231 of the Bill enabled an employer or registered person over the electronic filing threshold to seek out an exemption from the Commissioner where they met the requirement in the relevant provisions. The Committee found the Bill unclear as to whether the exemptions granted would be disallowable instruments. Further, the Committee noted the Bill did not require reasons for the exemptions and did not explicitly require the exemption to be time limited. The Committee recommended amendments to remedy these concerns.⁴³⁶

XIII Transitional regulations that override primary legislation

The Committee has expressed its concern regarding the use of transitional regulations in a manner that could amend or override primary legislation. Power to make regulations of this type is a particular kind of Henry VIII provision.

In 2012, the Committee stated that using transitional regulations for any purpose other than facilitating the transition between old and new legislation could be a breach of SO 327(2)(c) which may lead to regulations facing disallowance upon scrutiny from the Committee (discussed in Chapter 7).⁴³⁷ Despite this, the Committee has continued to note that empowering provisions in Bills could (either implicitly or explicitly) authorise the making of transitional regulations that override primary legislation. The Committee has laid out the following concerns:⁴³⁸

• These types of provisions may become seen as an acceptable means of modifying or overriding primary legislation without reference to Parliament.
• These types of provisions may become ordinary, rather than being used only in rare and exceptional circumstances.
• The growing prevalence of these provisions would compound their precedent effect.
• The language and scope of these provisions may eventually extend beyond technical and machinery matters into substantive policy, which would constitute an abuse of regulation-making power.⁴³⁹
• Use of these provisions may lead to a “slipshod” approach to policy development and drafting, with regulations being regularly used to address undeveloped policy or fill legislative gaps.
• Transitional issues may eventually be relegated entirely to regulations rather than being dealt with in primary legislation, which is not in the public interest.

The Committee completed a report into transitional regulations overriding primary legislation in July 2014.⁴⁴⁰

The Committee began by restating the general principles it had previously identified as applying to the use of transitional override powers:⁴⁴¹

• A provision that allows the making of regulations to amend the empowering Act should be used only in exceptional circumstances and should not be used routinely in reforming legislation.
• A complex reform involving the amalgamation of a large number of statutes may justify the use of an empowering provision allowing regulations to override the primary legislation, while essentially technical amendments or a rewrite of an existing Act which does not amount to a substantial change in the principles and context do not.
• A regulation-making provision that provides for regulations to override primary legislation should be drafted in the most specific and limited terms possible and must at all times be consistent with and in support of the provisions of the empowering Act.
• Any such provisions should always have a limited lifespan of no more than 3 years, which should generally be sufficient to allow adequate time for addressing any technical difficulties that arise.
• Regulations made pursuant to such an empowering clause should also include a sunset provision not exceeding 3 years.
• Where an empowering provision contains a sunset clause with a life of more than 3 years, regulations made pursuant to such a provision should be subject to parliamentary confirmation.

The Committee was concerned at the growing prevalence of these provisions. It noted that in 1995, when it had first established these principles, it could only find eight examples of such provisions. It was able to identify, however, 27 more Acts passed since 2000 and three bills before the House at the time of writing in July 2014 that contained such provisions (although there has been an apparent decrease in the use of these provisions since 2010). The Committee said it would continue to monitor the practice of including these provisions in bills closely, and recommended that the government take note of its report and take steps to limit its use of these provisions in line with the principles restated above.

The government noted that general practice since 1995 had been to draft empowering provisions in line with the principles the Committee had set out in 1995 (and restated in 2014).⁴⁴² These principles had also been adopted by the Legislation Advisory Committee in the most recent edition of the Guidelines. The government considered that, aside from some particular contexts, regulation-making powers of this kind in legislation had been used in a circumspect and limited manner. These provisions were drafted in specific and restrained terms, consistent with both the purpose of their Act and the purpose for which the regulation-making power had been created. Almost all contained sunset clauses, and since August 2013 these provisions had to be specifically identified in the legislative disclosure statement, improving parliamentary and public scrutiny.

The government also commended the evidence heard by the Committee from Justice Gageler of the High Court of Australia who had stated that provisions of this kind were “not a return to the executive autocracy of a Tudor monarch, but the striking of a legislated balance between flexibility and accountability”.⁴⁴³ The government agreed that sparing use of these provisions was common in other jurisdictions similar to New Zealand.

The government considered that there had been very limited use of these provisions since 1995 given the large number of Acts passed by Parliament in any given year. These provisions were generally used where Acts contained complex reforms or there were implementation issues, for example the legislative reforms required to establish the Auckland super-city in 2009 and 2010. They were also used in exceptional circumstances such as those following the Canterbury earthquakes in 2010 and 2011. The limited number of these provisions since 2000 indicated to the government that where they were enacted, both Select Committees and Parliaments in general had been satisfied that they were necessary, given the Committee’s 1995 principles.

The government stated generally that it supported the Committee’s intention to continue to monitor the situation and to apply the existing principles so as to ensure that provisions of this kind were not used improperly or routinely. However, the government considered no clear need has been established for it to take steps to limit the use of transitional override powers in legislation.⁴⁴⁴ The Committee has discussed with PCO the possibility of establishing a standard form of wording for use in empower provisions that authorise transitional override powers. This would provide a consistent “marker” that such provisions exist.⁴⁴⁵

342 Regulations Review Committee “Inquiry into the Constitutional Principles to Apply when Parliament Empowers the Crown to Charge Fees by Regulation” [1989] AJHR I16C. For more recent examples of the Committee’s view on setting fees by regulation, refer to its 2007 report on the complaint relating to the Midwifery (Fees) Notice 2005 and its 2005 report on its investigation into the complaints relating to Civil Court Fees Regulations. Further, the Office of the Auditor General’s Guidelines on Costing and Charging for Public Sector Goods and Services and the Treasury’s Guidelines for Setting Charges in the Public Sector also contain useful guidance: see above, n 181.

343 The Bill of Rights 1688 applies in New Zealand by virtue of the Imperial Laws Application Act 1988.

344 The Committee cited and approved comments by the High Court of Australia in Air Caledonie International v Commonwealth of Australia [1988] 82 ALR 385: “If the person required to pay the exaction is given no choice about whether or not he requires the services and the amount of the exaction has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds the value, properly be seen as a tax”.

345 Regulations Review Committee “Inquiry into the Constitutional Principles to Apply when Parliament Empowers the Crown to Charge Fees by Regulation”, above n 342, at 12.

346 “Government Response to the Report of the Regulations Review Committee: the Inquiry into the Constitutional Principles to Apply when Parliament Empowers the Crown to Charge Fees by Regulation” [1989] AJHR I20.

347 The process used to make regulations and deemed regulations is normally quite different. For traditional regulations, they are drafted by Parliamentary Counsel Office; approved by Cabinet; made by the Governor-General in Executive Council; notified in the Gazette; and published in the Statutory Regulations (SR) series. By contrast, deemed regulations are not usually drafted by PCO but are the responsibility of the organisation making them; generally made by a single authority such as a minister or other official; not usually subject to Cabinet approval or submitted to the Governor-General in Executive Council; and infrequently published in the SR series.

348 Regulations Review Committee “Inquiry into Instruments Deemed to be Regulations - An Examination of Delegated Legislation” [1999] AJHR I16R.

349 Regulations Review Committee “Inquiry into the Principles Determining Whether Delegated Legislation is Given the Status of Regulations” [2004] AJHR I16E.

350  Regulations Review Committee “Investigation into Deemed Regulations that are not presented to the House of Representatives” [2006] AJHR I16E.

351 This issue is addressed in some detail in Legislation Advisory Committee, above n 135, ch 14.

352 The first was in October 1999, in which the government agreed with two Committee recommendations. Consideration of the remaining recommendations was deferred until the results of a working party could be considered. The report of this working party formed the basis of the government’s second response, tabled in November 2000. “Government Response to the Report of the Regulations Review Committee: Inquiry into Instruments Deemed to be Regulations - An Examination of Delegated Legislation” [1999] AJHR A5; and “Further Government Response to the Report of the Regulations Review Committee: Inquiry into Instruments Deemed to be Regulations - An Examination of Delegated Legislation” [2000] AJHR A5.

353 Regulations Review Committee “Inquiry Into the Principles Determining Whether Delegated Legislation is Given the Status of Regulations”, above n 349.

354 Regulations Review Committee “Inquiry Into the Principles Determining Whether Delegated Legislation is Given the Status of Regulations”, above n 349 at 7.

355 “Government Response to the Report of the Regulations Review Committee: Inquiry Into the Principles Determining Whether Delegated Legislation Is Given the Status of Delegated Legislation” [2004] AJHR A5 at 2.

356 Regulations Review Committee “Investigation into Deemed Regulations that are not presented to the House of Representatives”, above n 350.

357 “Government Response to Report of the Regulations Review Committee: Investigation into Deemed Regulations That Are Not Presented to the House of Representatives” [2006] AJHR J1.

358 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 17 and Regulations Review Committee “Activities of the Regulations Review Committee” [2017] AJHR I.16D at 13.

359 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 17 and Regulations Review Committee “Activities of the Regulations Review Committee” [2017] AJHR I.16D at 13.

360  Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 17 and Regulations Review Committee “Activities of the Regulations Review Committee” [2017] AJHR I.16D at 13 at 7–8.

361 Regulations Review Committee “Inquiry Into the Oversight of Disallowable Instruments That are not Legislative Instruments” (11 July 2014).

362 Regulations Review Committee “Inquiry Into the Oversight of Disallowable Instruments That are not Legislative Instruments” (11 July 2014) at 5.

363 Regulations Review Committee “Inquiry Into the Principles Determining Whether Delegated Legislation is Given the Status of Regulations”, above n 349.

364 “Government Response to Report of the Regulations Review Committee: Inquiry Into Disallowable Instruments That are not Legislative Instruments” (9 December 2014).

365 Information about the project can be found on the PCO website at: <www.pco.govt.nz/asip>.

366 Regulations Review Committee “Briefing on Government responses to two reports of the Regulations Review Committee” (16 May 2017) at 4.

367 See explanation in Chapter 3.

368 Regulations Review Committee “Activities of the Regulations Review Committee in 2012” (19 March 2014) at 18.

369 Regulations Review Committee “Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period”, above n 84 at 15.

370 Regulations Review Committee “Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period”, above n 84 at 16.

371 Regulations Review Committee “Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period”, above n 84. Although this report was specifically concerned with transitional regulations, the majority of the discussion is applicable to Henry VIII clauses more generally.

372 Donoughmore Report, above n 80.

373 Donoughmore Report, above n 80 at 61.

374 Regulations Review Committee “Activities of the Regulations Review Committee in 2018” (20 March 2019) at 4.

375 “Government Response to the Report of the Regulations Review Committee: the Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period” [1996] AJHR I20.

376 Regulations Review Committee “Inquiry into Parliament’s legislative response to future national emergencies” [2016] AJHR I16B.

377 Regulations Review Committee “Inquiry into Parliament’s legislative response to future national emergencies” [2016] AJHR I16B at 12.

378 Regulations Review Committee “Inquiry into Parliament’s legislative response to future national emergencies” [2016] AJHR I16B at 12 at 6 and 17; see the full letter signed by 27 academics at Andrew Geddis “An open letter to New Zealand’s people and their Parliament” (28 September 2010) Pundit <pundit.co.nz>.

379 Regulations Review Committee “Inquiry into Parliament’s legislative response to future national emergencies” [2016] AJHR I16B at 12 at 17.

380 Regulations Review Committee “Inquiry into Regulation-making powers that authorise transitional regulations to override primary legislation” (15 July 2014).

381 Donoughmore Report, above n 80; see also Tim Macindoe and Lianne Dalziel “New Zealand’s response to the Canterbury earthquakes” (paper delivered to Australia-New Zealand Scrutiny of Legislation Conference, 2011).

382 “Inquiry into Parliament’s legislative response to future national emergencies”, above n 376, at 16.

383 “Inquiry into Parliament’s legislative response to future national emergencies”, above n 376, at 23.

384 “Inquiry into Parliament’s legislative response to future national emergencies”, above n 376, at 10.

385 Regulations Review Committee “Report on the Inquiry Into the Affirmative Resolution Procedure” [2007] AJHR I16I. The 2007 report followed a 2004 interim report (Regulations Review Committee “Interim Report on the Inquiry Into the Affirmative Resolution Procedure” [2004] AJHR I16F). The 2007 report marks a shift in the Committee’s view on the acceptable use of the affirmative resolution procedure. Although the Committee declined to set general principles for the use of the procedure, it appears there are now quite limited circumstances in which use of the procedure is appropriate.

386 For further discussion and examples of the current affirmative resolution procedure, see Ross Carter, Jason McHerron and Ryan Malone Subordinate Legislation in New Zealand (LexisNexis, 2013) at 142–148.

387 Legislation Act 2019, s 115.

388 “Government Response to the Report of the Regulations Review Committee: Inquiry into the affirmative resolution procedure” [2007] AJHR J1.

389 “Government Response to the Report of the Regulations Review Committee: Inquiry into the affirmative resolution procedure”, above n 388. Report of the Standing Orders Committee “Review of Standing Orders” [2008] AJHR I18B.

390 Standing Orders Committee “Review of Standing Orders”, above n 389.

391 Regulations Review Committee “Inquiry Into Regulation-Making Powers That Authorise International Treaties To Override Any Provisions of New Zealand Enactments” [2002] AJHR I16H.

392  Regulations Review Committee “Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period”, above n 84.

393 Regulations Review Committee “Investigation into the Commencement of Legislation by Order in Council” [1996] AJHR I16K at 7.

394 “Government Response to the Report of the Regulations Review Committee: the Investigation into the Commencement of Legislation by Order in Council” [1997] AJHR A5.

395 Regulations Review Committee “Investigation into the Local Electoral Act Commencement Order 2001 and the Commencement of Legislation by Order in Council” [2002] AJHR I16L at 17.

396 Regulations Review Committee “Investigation into the Local Electoral Act Commencement Order 2001 and the Commencement of Legislation by Order in Council” [2002] AJHR I16L at 17.

397 Regulations Review Committee “Securities Amendment Act 2002 Commencement Order 2009 (SR 2009/10)” [2009] AJHR I22A.

398 Regulations Review Committee “Investigation into the Copyright (New Technologies) Amendment Act 2008 Commencement Amendment Order (No 2) 2009 (SR 2009/51)” [2009] AJHR I22B.

399 “Government Response to the Regulations Review Committee’s Investigation into the Securities Amendment Act 2002 Commencement Order 2009” [2010] AJHR J1.

400 “Government Response to the Regulations Review Committee’s Investigation into the Securities Amendment Act 2002 Commencement Order 2009” [2010] AJHR J1 at 6.

401 “Government Response to the Regulations Review Committee’s Investigation into the Copyright (New Technologies) Amendment Act Commencement Amendment Order (No 2) 2009” [2010] AJHR J1.

402 Regulations Review Committee “Activities of the Regulations Review Committee in 2014” (8 August 2014) at 15–16.

403 Regulations Review Committee “Activities of the Regulations Review Committee in 2016” [2017] AJHR I.16C at 5.

404 Regulations Review Committee “Inquiry into Material Incorporated by Reference”, above n 158.

405 Regulations Review Committee “Further Inquiry into Material Incorporated by Reference”, above n 158.

406 Regulations Review Committee “Inquiry into Instruments Deemed to be Regulations – An Examination of Delegated Legislation”, above n 348.

407 See Legislation Advisory Committee, above n 135, at [10.6.1]. See now Legislation Advisory and Design Committee, above n 135, at [15.3].

408 Regulations Review Committee “Inquiry into Material Incorporated by Reference”, above n 158.

409 “Government Response to the Report of the Regulations Review Committee: the Inquiry into Material Incorporated by Reference” [2004] AJHR A5.

410 Legislation Act 2012, s 54.

411 Legislation Act 2012, s 53.

412 Legislation Act 2012, s 56.

413 Regulations Review Committee “Further Inquiry into Material Incorporated by Reference”, above n 158.

414 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 9–10.

415 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 9–10.9.

416 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 9–10.10.

417 Regulations Review Committee “Inquiry into the ongoing need for individual regulations and their impact” [2007] AJHR I16L; and Regulations Review Committee “Inquiry into all regulations in force as at 14 November 1988” [1988] AJHR I16B.

418 The Committee recommended the regulations be revoked in consultation with the responsible government department, using section 16 of the Acts and Regulations Publication Act 1989.

419 These included: ad hoc departmental review responding to issues or government direction; ad hoc parliamentary review (by subject committees or Regulations Review Committee) arising from inquiry, complaint or petition; an independent agency dedicated to review (“a red tape commission”); planned departmental review where departments/ministers undertake to review regulations at the time of making; and legislated departmental review, where legislation requires review of regulations after a specified period.

420 Ross Carter, Jason McHerron and Ryan Malone Subordinate Legislation in New Zealand (LexisNexis, 2013) at 363.

421 Regulations Review Committee “Inquiry into the ongoing need for individual regulations and their impact”, above n 417.

422 The Regulatory Impact Analysis Unit transferred from the Ministry of Economic Development to Treasury from November 2008.

423 See Treasury “Impact Analysis Requirements for Regulatory Proposals” <www.treasury.govt.nz>.

424 Regulations Review Committee “Inquiry into the use of Instruments of Exemption in Primary Legislation” [2008] AJHR I16Q.

425 The Committee also considered the following matters, which are canvassed in this chapter: the appropriate principles for imposing conditions in relation to exemptions, principles for publication of requirements for instruments of exemption, concerns relating to fragmentation of the law through the use of exemptions, and the impact this may have on public access to the law.

426 Regulations (Disallowance) Act 1989, s 4.

427 Regulations (Disallowance) Act 1989, s 4.

428 Under this test an instrument is legislative in character, and therefore a regulation, if it fulfils the following two criteria. First, does the instrument regulate the public generally or any class of the public (including an occupational class)? Secondly, does it prescribe or impose obligations, confer entitlements, or create benefits or privileges?

429 Regulations Review Committee “Inquiry into the use of Instruments of Exemption in Primary Legislation”, above n 424.

430 Regulations Review Committee “Inquiry into the use of Instruments of Exemption in Primary Legislation”, above n 424, at 13-14.

431 “Government Response to the Report of Regulations Review Committee on its Inquiry Into the use of Instruments of Exemption in Primary Legislation” [2009] AJHR J1.

432 “Government Response to the Report of Regulations Review Committee on its Inquiry Into the Use of Instruments of Exemption in Primary Legislation”, above n 431.

433 Legislation Advisory Committee Guidelines on the Process and Content of Legislation (Wellington, 2014), ch 14 and Legislation Advisory and Design Committee Legislation Guidelines (Wellington, 2018), ch 16.

434 For further discussion regarding exemptions see Ross Carter, Jason McHerron and Ryan Malone Subordinate Legislation in New Zealand (LexisNexis, 2013), at 58–62.

435 Legislation Advisory and Design Committee Legislation Guidelines (Wellington, 2018), ch 16.

436 Regulations Review Committee “Activities of the Regulations Review Committee in 2017” [2017] AJHR I.16D at 7.

437 Regulations Review Committee “Investigation into the Road User Charges (Transitional Matters) Regulations 2012” (13 November 2012) at 7.

438 Regulations Review Committee “Activities of the Regulations Review Committee in 2013” (27 June 2014) at 25; Regulations Review Committee “Activities of the Regulations Review Committee in 2014” (8 August 2014) at 9.

439 Regulations of this type would also breach SO 327(2)(c), see discussion at Chapter 7.

440 Regulations Review Committee “Inquiry into Regulation-making Powers that Authorise Transitional Regulations to Override Primary Legislation” (15 July 2014) at 7.

441 Regulations Review Committee “Inquiry into the Resource Management (Transitional) Regulations 1994 and the Principles that Should Apply to the Use of Empowering Provisions Allowing Regulations to Override Primary Legislation During a Transitional Period”, above n 84.

442 “Government Response to the Report of the Regulations Review Committee: regulation-making powers that authorise transitional regulations to override primary legislation” (9 December 2014) at 2.

443 “Government Response to the Report of the Regulations Review Committee: regulation-making powers that authorise transitional regulations to override primary legislation” (9 December 2014) at 2.3.

444 Regulations Review Committee “Briefing on Government responses to two reports of the Regulations Review Committee” (16 May 2017) at 4.

445 Regulations Review Committee “Briefing on Government responses to two reports of the Regulations Review Committee” (16 May 2017) at 4.