The fast regulators in the West
Released 09 Apr 2011
Don Nicolson is Federated Farmers President
Ahead of May's Budget, unions are warning that cutting even one Wellington public servant will lead to a reduction in services. The Government responds by pointing to a sluggish economy, two earthquakes and a public operating deficit heading north of $16 billion. Something's got to give.
New Zealand's private debt is an eye-watering $304 billion, but that doesn't stop some alarmists claiming agriculture's debt is a Kiwi ‘sub-prime'. Agriculture's share of all private debt is less than 16 percent and, unlike the sub-prime bubble, farmers from the land and the sea produce two-thirds of New Zealand's physical exports. We're also working hard to reduce the debt monkey on our backs, but Government seems to be heading in the opposite direction. Like New Zealand, the United Kingdom is aiming to have a balanced budget by 2015 and its recent budget was blunt. So blunt, it saw an outbreak in rioting. Yet it was also realistic about Britain's precarious public finances. As a columnist in the Daily Telegraph wrote, "the [UK] Labour party's most senior figures, in defiance of their education and intelligence, keep claiming that [UK finance minister] Osborne's actions are ‘driven by ideology, rather than necessity'. This is absurd. Anyone who argues that rapidly addressing the fiscal catastrophe Labour left behind is anything other than absolutely crucial either knows nothing about global bond markets, or is so blindly ambitious, so determined to close their eyes to the facts, as to be unfit for public office". Ouch.
Will our Budget in six weeks time generate the same rioting as seen in the UK? I doubt it when Ganesh Nana, BERL's chief economist, says that cuts here ‘should be made when the economy is strong and public servants have somewhere else to go to get another job'. This implies parts of the public service are an increasingly unaffordable jobs scheme. Now unions are as likely to welcome downsizing as turkeys look forward to Christmas, but the big reason why underemployed public servants is bad, is the red-tape spun to justify their existence. This is a time we need to be cutting our cloth to suit. With 780 primary Acts and 3,365 statutory regulations, New Zealand has an unenviable reputation as the fastest regulator in the West. Each year, upwards of 9,000 pages of new legislation are created or amended by way of 105 Acts and 405 regulations. On average six pieces of legislation are passed by Parliament each sitting week. Then there is the mass of local government plans, policies and bylaws.
Stalin thought ‘quantity has a quality all of its own' but businesses and farmers don't. Sometimes you have to set a thief to catch a thief and the Regulatory Standards Bill is an important and long overdue counterpart to the powerful Bill of Rights. The Regulatory Standards Bill proposes testing legislation against six high-brow principles, such as accordance with the ‘rule of law', ‘individual liberty' and ‘property rights' among others. What we're talking about is the basis for a free liberal market economy and society. Regulators will think twice before slipping poor regulation into Parliament because the courts will be able to deliver an embarrassing ‘declaration of incompatibility'. While this won't strike out incompatible legislation, such a declaration would surely become an electoral albatross. The end result may be a focus upon regulatory outcome rather than output. If less regulation means more parliamentary time debating the future, all the better.
The Regulatory Standards Bill is no sheep in wolf's clothing, but is a big step towards empowering the public against the state.
