'One Law' And The Battle Against Red Tape

Hon Heather Roy speech to the ACT New Zealand Upper South Regional Conference; Copthorne Hotel Commodore, Memorial Ave, Christchurch; Sunday, May 30 2010.

Good morning ladies and gentlemen.

There are some things that are quintessentially ACT: freedom; choice; personal responsibility. These provide a consistency in our policy, making and ethos. We talk a lot about what is important for New Zealanders and, in particular, a safe and prosperous country. ACT policies are built around these principles and ideals.

ACT has always had a strong stand on law and order, welfare policies that get incentives right - a hand up, not a handout - school choice; these have been with us since our inception.

Red tape is also something we in ACT have railed against for as long as I've been involved with the Party. Red tape, compliance costs and the like hinder what should be relatively simple processes for people to get about their business and provide no visible gain.

Today I would like to talk to you about another core ACT area: the area of regulatory reform - a subject close to the hearts of all ACT MPs, as well as our members and supporters.

Regulatory reform is about improving the quality of legislation and regulation - an area in which it has long been known we have real problems. Numerous attempts have been made since the 1980s to address these problems, but all have proved fruitless - until now.

First, we need to look at the problem.

In just nine years, from 2000-09 under a Labour Government, Parliament passed more than 68,000 pages of regulation. With such a deluge of regulation, it is not surprising that not all was of a high quality. We don't have to think too hard to find legislation that is well-intentioned but useless or, worse, obstructive. The Dog Micro-chipping and Anti-Smacking Bills spring instantly to my mind.

In fact, our quality of legislation has deteriorated significantly when compared to the rest of the world - for example, our ranking in the OECD Product Market Regulation has dropped from fourth in 1998 to 12th in 2007.

This huge surge in regulation has had the inevitable effect of stifling competition and opportunity. This, coupled with our small size and remote global location, has contributed to reduced productivity and a stagnant economy.

If we are to attract and retain increasingly mobile skills, capital, technology and entrepreneurship - and close the prosperity gap with other countries - New Zealand needs to offer a regulatory environment that is significantly better than that of our competitors.

It is for this reason that Regulatory Reform is a cornerstone of ACT policy. ACT Leader Rodney Hide's Regulatory Responsibility Bill is designed to address these issues. The Bill began as a Private Member's Bill in Rodney's name when we were in Opposition during the last Parliamentary term. It is a new institutional process that demands proper and deliberate reflection on new and existing regulation, and requires this to be done transparently, not behind closed doors.

The Regulatory Responsibility Bill imposes commonsense requirements on the passing of all new regulation and legislation by asking question such as: what is this legislation for? What will it cost? What will its unintended consequences be?

The Bill went before Parliament's Commerce Committee - which saw its potential value, but had some questions about the statement of regulatory principles and the proposed role of courts.

The Committee recommended that a taskforce review the proposal and, in line with the National-ACT Confidence & Supply agreement, the Regulatory Responsibility Taskforce was asked to examine the Regulatory Responsibility Bill and make recommendations.

The Regulatory Responsibility Bill is currently on the Order Paper and is still very similar to the original ACT model. Broken down simply, it has three key elements: benchmarks for quality; transparency in decision-making; and an incentive to comply.

Just because the Bill hasn't been passed into law does not mean that work on reforming our regulatory environment is at a halt, however. The National-ACT Confidence & Supply Agreement saw Rodney appointed Minister for Regulatory Reform.

At present, Rodney - together with Deputy Prime Minister Bill English - is co-ordinating nine major regulatory reviews of: Air Quality Standards; the Building Act; Dairy Restructuring (Raw milk) Regulations; the Employment Relations Act; the Foreshore & Seabed Act; the Holidays Act; the Overseas Investment Act; the Resource Management Act; and Weathertight Homes.

Among other reviews that have now been substantially completed are the Electricity Institutional Arrangements; and the Food Act.

As an ACT Minister, I have also carried the regulatory reform ethos into my own portfolios and in my area of Consumer Affairs am currently conducting a comprehensive review of the 11 pieces of legislation that cover consumer law. This is my 'One Law' initiative, and this too has now been added to the Regulatory Reform agenda.

When I first became Minister of Consumer Affairs in 2008 matters that were brought to my attention included the need to issue warnings to consumers about noisy toys and leaky hot water bottles. I decided that these were operational matters best dealt with by the Ministry itself while I, as Minister, would focus on higher policy issues.

At the beginning of 2009 I met with my Consumer Affairs officials and outlined my priorities through to the next election. It was there that I first spoke of my 'One Law, One Door' plans.

'One Law' is based on the premise that simplicity is the key to effective market activity and based on the principles of the Regulatory Responsibility Bill. I proposed that the Ministry of Consumer Affairs explore a simplification programme - starting with a review of the 11 pieces of consumer law to determine their relevance to today and their ability to be relevant into the future.

Effective consumer laws help to create a competitive business environment in which consumers and businesses can engage with trust and confidence. However, like other business regulation where consumer laws do not achieve their objective or are no longer relevant to the way the market operates, they can be a drag on the innovative potential of businesses.

A good example of a law in need of change is the Auctioneers Act 1928. The licensing fee required under the Act is a hangover from the days when livestock auctions were held frequently and local authorities were left with the considerable cost of cleaning the stock's 'mess' from the streets after outdoor proceedings. Things have certainly moved on since the late 1920s and the question of licensing auctioneers needs to be reviewed. Certainly the current fee and how it is distributed should be reassessed to better suit a different time and age. On-line auctions, for example, are currently causing some concern - something not even imaginable in 1928.

'One Law' refers to a goal of a principle-based piece of consumer-supplier legislation similar to the approach found in the Privacy Act. After reviewing the 11 consumer laws, I directed the Ministry to consider how these could be merged to cover what is a relatively simple process of transaction, with a buyer, a seller and a guiding set of principles to cover a sale scenario.

To that end, 'One Law' covers seven Acts that the Ministry of Consumer Affairs is responsible for: the Fair Trading Act 1986, the Consumer Guarantees Act 1993, the Door to Door Sales Act 1967, the Lay-by Sales Act 1971, the Unsolicited Goods and Services Act 1975, the Auctioneers Act 1928, and the Weights and Measures Act 1987.

Also included in the review - despite actually sitting in the Commerce portfolio under Hon Simon Power - are the Carriage of Goods Act 1979, the Sales of Goods Act 1908, and the Sale of Goods (United Nations Convention) Act 1994.

A separate review occurring in parallel covers the Credit Contracts and Consumer Finance Act 2003 (CCCFA) and the Credit (Repossession) Act 1967.
Initial thinking at the heart of 'One Law' was to see much of our consumer law consolidated into an enhanced Fair Trading Act. The purpose of which would be to promote consumer wellbeing by fostering effective competition and enabling the confident participation of consumers in markets in which both consumers and suppliers trade fairly and in good faith.

It is often mistakenly thought that consumers are just people purchasing goods or services. While it shouldn't be forgotten that businesses are consumers as well, there has been a trend toward an 'us and them' type of legislation where the customer somehow must be 'protected' from potentially bad business. There are, of course, just as many consumers trying to put one over businesses as there are businesses doing this to consumers.

This enhanced Fair Trading Act would place a responsibility on both the supplier and the consumer to undertake fair and honest transactions. Under 'One Law', an enhanced Fair Trading Act would aim to encompass legislation covering unfair commercial practices, selling and duress, product safety, information to assist consumer decision-making and trader obligations.

Given the scope of our consumer law, having one single piece of legislation to govern the entire gamut of transactions and issues is not likely to prove a realistic option. It is my intention, therefore, to see the enhanced Fair Trading Act complemented by the Consumer Guarantees Act - a piece of legislation that is already well-regarded around the world and seen by Australia as a template on which to model their own consumer law.

Sitting alongside these two laws could be an enhanced CCCFA - incorporating the Credit (Repossession) Act - and the Motor Vehicle Sales Act. The Weights and Measures Act could also sit alongside or potentially be a separate part of an enhanced Fair Trading Act.

Good legislation is clear, enforceable, and routinely enforced. As part of the 'One Law' policy process, a range of enforcement options - with responsibility held by the Commerce Commission, the courts, the Ministry of Consumer Affairs, and trader obligations - are being considered.

Throughout this whole process I have kept in mind the ongoing Government work to achieve a Single Economic Market with Australia. Achieving this goal would be a huge step forward in promoting trans-Tasman business opportunities and Consumer Law can play a part in this.

With this in mind the review process of 'One Law' has been undertaken with six specific Consumer principles agreed upon by the trans-Tasman Ministerial Council on Consumer Affairs. I am happy to report that my Australian counterparts have heard of the 'One Law' reform process and are eagerly awaiting an update from me.

Achieving the goals of the 'One Law' initiative will be a significant step forward for consumer law and regulatory reform in New Zealand. Providing effective consumer law will help to further foster a competitive business environment in which consumers can transact with confidence and honest businesses compete on a level playing field.

Once we've dealt with that, we'll move on to dealing further with the constant battle of red tape.

ENDS