Regulatory Standards Act: Enhancing Transparency and Accountability in Local Government

Thank you to LGNZ for the opportunity, and thank you to the mayors, chairs, and councilors for putting your names forward to serve your communities. It’s not meant to be glamorous, it’s often thankless, but it really matters because you can’t have representative democracy without representatives.

Just like democracy doesn’t work without representatives, it also needs informed voters. That brings me to the Regulatory Standards Act.

At its heart, it is an information device. It is a codified declaration of how a regulation affects citizens. It is designed to help political markets function, by letting voters understand the impact of their representatives’ regulations.

We take a wide view of regulation. Some people mean a specific category of secondary legislation. We mean any instrument constraining the use and exchange of private property, including bylaws.

It will be law in a few months, by July 1 at the latest, and from that time it will require Consistency Accountability Statements by Councils making bylaws.

A Consistency Accountability Statement asks and answers basic questions about how a new law affects citizens liberties and property rights. What problem is the council trying to solve? What is the cost of the solution? What are the benefits? And who do those costs and benefits accrue to?

To make the Statements credible and meaningful, they can be reviewed by the Regulatory Standards Board, so there is an incentive to maintain quality.

Over time, the publication of Consistency Accountability Statements is designed to drive out poor regulation by making it easier for voters to identify it, and the people responsible.

The Regulatory Standards Act is designed to address New Zealand’s major problem with productivity. At the moment, after a period of inflation, productivity is appearing as affordability. Nonetheless, affordability and productivity are two sides of the same coin low productivity means less to buy and less income to buy it with.

The average rates bill has increased 43 per cent since 2022. You lump that in with the things that are out of your control, like energy, food and petrol, and you can understand why people are so jaded.

Councils are both the victim and the perpetrator of poor regulation. So many of the costs you face from earthquake strengthening to temporary traffic management are the result of regulation. You also place a lot of cost on ratepayers in your jurisdiction. Councils and ratepayers both have a vested interest in improving the standard of regulation.

Bad regulation doesn’t just cost money. It stops good things from happening. Property developers abandon proposals that would ease the housing crisis because of ballooning regulatory costs. Community parades disappear under the weight of compliance costs, even when nothing’s gone wrong before. The climbing wall at Sir Edmund Hillary's old school has signs put up saying don't climb.

Here’s what we can do – less. Central Government and Local Government both have a shared responsibility to inflict fewer costs on people. Preventing bad regulation which sucks up time and money is one of the best places we can start.

Central Government isn’t shirking responsibility. We’re finally getting rid of overzealous earthquake laws, methane reduction targets are being halved so farmers can keep on farming, health and safety laws are being overhauled to focus on critical risks. Thanks to resource management reform the number of consents required is expected to half. Meanwhile, peer reviewed analysis estimates that work by the Ministry for Regulation in its first 18 months will deliver a net public benefit of $280 million.

Even small regulations that might seem inconsequential add up. For example, council dictates that Wellington public transport can’t advertise alcohol or food high in sugar and salt. Meanwhile, passengers walk past advertisements for vodka cruisers delivered by uber inside the station. Instead of raising fares or putting more costs on ratepayers, it could be that a needless ban on advertising is preventing the service from being efficient.

I’m sure there are countless examples like this. The Regulatory Standards Act is going to be the mechanism which levels the playing field between the overzealous regulator, and the regulated party.

How does it work? The Regulatory Standards Act requires certain laws to be tested against long-standing legal principles and to have the benefits and costs assessed. As an information device, it doesn’t prevent a Council passing a law, it does require you to do it more transparently than ever before.

Once part 2 of the Act comes into force, councils will generally need to prepare and publish a Consistency Assessment Statement, a CAS, whenever they make or amend secondary legislation, unless the instrument is specifically excluded.

The Act also creates a pathway for classes of existing secondary legislation to be brought into scope later, by notice - but only where that notice is affirmed by Parliament.

Councils won’t be expected to go back and write CASs for every existing bylaw by default. Existing secondary legislation only becomes a CAS obligation if it is captured through those mechanisms, or if a CAS already exists for it, or if councils later amend it in a way that triggers the requirements.

If a CAS identifies that a bylaw is inconsistent with one or more principles of responsible regulation, the Act doesn’t say stop. It says explain. The council must publish a brief statement explaining why the inconsistency exists. For example, because of a legitimate public safety objective. The point is transparency and discipline: if you depart from the principles, you do it consciously and you tell ratepayers why.

Councils will also need to get ahead of the curve by developing plans for regularly reviewing the secondary legislation that falls within scope. This is not meant to be a one-off compliance exercise, but an ongoing habit of keeping rules up to date, proportionate, and justified.

These requirements will start on a date set by Order in Council. And if anything hasn’t commenced before then, the Act provides a backstop: any remaining parts come into force by 1 July 2026.

A number of councils argued local government should be excluded and warned this will impose time and cost and make it harder to pass bylaws. Yes, that is the point, it will be harder to put costs onto ratepayers.

However, I don’t buy that councils don’t have the time to be transparent. Councils somehow find time to make declarations about foreign wars and climate change, invest in relationships with sister cities with no benefit to 99.9 per cent of their ratepayers, ban sugary advertising, and find time to reinvent themselves as Tiriti-centric organisations. Councils just aren’t in a position to argue they can’t file a Consistency Accountability Statement.

Let me offer a ratepayer’s perspective.

If your council can’t explain why a bylaw is necessary, can’t show it’s proportionate, and can’t justify the costs it imposes, then maybe it should be harder to pass.

The Ministry for Regulation is preparing support material to help councils implement the Act, including statutory guidance issued by the Minister for Regulation and the Attorney-General, and non-statutory guidance, such as templates, to make CASs easier and more consistent.

And one more practical point: there has sometimes been confusion about what counts as secondary legislation. The definition sits in the Legislation Act 2019. Bylaws are in scope, and so is any other instrument made by a local authority or council-controlled organisation that has significant legislative effect. If ratepayers are paying for it, and it materially affects their lives, they deserve clarity about it.

Now if all of that sounds boring, good. Responsible governance isn’t fun and doesn’t involve thinking up new bylaws and regulations to scratch an electoral itch when it arises.

Let me put this into perspective with something topical that I’m sure many of you are dealing with. Dog attacks, there’s been a brutal uptick in dog attack incidents and I know there is a lot of fear out there right now, rightly so. The pressure comes on to do something.

With every salient issue there’s a desire to find a solution that’s easy and wrong, which is what we’re trying to avoid.

Bluntly the dogs causing issues are likely owned by gangs and degenerates – people who already ignore the rules. Councils would be wise not to perform any kneejerk regulating that actually just puts more cost or burden on the good dog owners.

That’s the kind of moment where the Regulatory Standards Act helps. It forces you to ask: will this actually work? Who pays? Who gets punished? What’s the evidence? Is there a smarter option that targets the actual problem rather than the compliant majority?

When central or local government gets it wrong it’s the public that pays. We owe it to taxpayers and ratepayers to deliver better value, better service and fewer unnecessary regulations.

That’s my challenge to you. But I’ll also offer this, we will help you implement this properly. We’ll provide guidance, templates, and practical support, because the goal isn’t to trip councils up but to lift the quality of decision-making across the board.