Friday, 27 November 2009

The Regulatory Responsibility Act

Just last month the report of the Regulatory Responsibility Taskforce was released. Not that many people seem to have noticed. The taskforce was headed by former secretary of the Treasury Graham Scott and included Paul Baines, Hon David Caygill, Richard Clarke QC, Jack Hodder SC, Dr Don Turkington and Dr Bryce Wilkinson. The full report is available here.

One person who did notice is Roger Kerr, who had a piece on the report and the Regulatory Responsibility Act in the The Independent on the 26th of November 2009. He argues that,
The Taskforce report is an outstanding piece of legal and economic analysis. It should give the government comfort that the bill it proposes respects constitutional principles and the sovereignty of parliament. The bill would present no barriers to the adoption of sound regulations but should help to screen out bad ones.
And New Zealand has, unfortunately, much in the way of bad regulation.

Kerr goes on to explain that,
[t]he structure of the bill has three main elements.

First, it elaborates principles for responsible regulation, drawing on the RIS requirements and the LAC Guidelines, that are to apply to new legislation and, over time, to all legislation. These cover such things as the rule of law, personal liberties, taking of property, taxes and charges, and processes for good law-making.

Second, it requires those proposing new legislation (such as ministers and chief executives) to certify that the legislation is compatible with those principles and, if not, the reasons for the incompatibility.

Third, it grants courts the power to declare legislation to be incompatible with those principles.
Note that the,
[c]ourts are given no other powers: they would not be able to stop the passage of legislation by injunctions and would have no new ability to award compensation for regulatory takings. A declaration would only carry moral authority.
One wonders what would happen if a government did go against such a court declaration. Is moral authority enough?

Kerr makes the point that,
[t]here may be opposition to a ‘regulatory constitution’ by politicians who do not wish to tie their hands but rather be free to regulate for the benefit of some interest group rather than in the public interest.
But this seems to be the main reason for having such a bill, trying to stop politicians from regulating for the benefit of some interest group or another ... and themselves.

Kerr also makes another interesting point,
So far there has been minimal media coverage of a proposal that stands to rank with the earlier ‘economic constitutions’ and attract international interest.
Why? Is the media just not interested or do they just not realise the importance of such a bill? Given the woeful standard of economic reporting in this country, it may well be that journalists are just unable to understand the importance of the bill.

Kerr adds
It deserves wider public exposure and debate.
And so it does. So give it more!

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