In defence of the RIS

Actively removing scrutiny of the operation of Government power is almost always a bad idea.

One day not so long ago a new Government came into power promising a sweeping set of repeals and reforms as part of a “100 day plan”. This Government was a little bit late getting its work going because of lengthy coalition negotiations, so when it got started it tried to move with pace, setting aside some of the usual weak guard-rails around new lawmaking, like full select committee processes or rigorous impact analysis. The Opposition was predictably outraged, telling the House that “the Government thinks that the most important things they are doing don't deserve a proper impact assessment,” while the Government argued it had a duty to move at pace given the issues at play had just been the subject of a general election.

I’m not talking about 2023 of course, I’m talking about 2017. Labour had just come to power and was moving as quickly as possible to implement an extension to Paid Parental Leave, a Healthy Homes Bill, fees-free, and the families package, which cancelled tax cuts and used the money for a variety of spending measures.

Like National now it was attempting to move fast to make clear to the public that it was delivering on its promises, to set up a sense of change and momentum. And that clearly got in the way of some scrutiny - the Healthy Homes Bill was picked up as a resurrection of an Opposition member’s bill rather than as a brand new law, and Paid Parental Leave skipped select committee as the Government argued the issue had been argued enough.

But officials did get a chance to write up some analysis for these changes, even if they had already been decided on. They did these in what are called “Regulatory Impact Statements” (RISs) - formulaic papers that are supposed to be produced for basically any change that involves a Government changing a law¹.

There’s one on the Healthy Homes Bill where MBIE officials try to estimate what the vague promises Phil Twyford was making in the bill would cost landlords and Housing New Zealand. There’s a very flimsy one on Paid Parental Leave. There’s one on strengthening union access and partially banning 90-day trial periods. There’s one on getting rid of National Standards. There’s even one on cancelling the tax cuts, where officials warn that this risks disincentivising work through New Zealand’s steep marginal tax rate.

It is not at all clear that we will get to see these same analyses of the new Government’s legislative agenda.

My former colleagues Thomas and Thomas both broke the story last week that the Government was suspending the RIS for some bits of its 100-day agenda. The exact details of what papers will be exempt and what won’t remain a bit murky - it seems “straight repeals” won’t need a RIS at all but other “new” policies would, although without Treasury’s quality assurance process.

A host of defences of this have been made by the new Government and its supporters. I don’t think they stack up. Here’s why.

Analysis of policy matters even if it is happening anyway

The main argument that the Government has made has been that the impact analysis process is a waste of time on policies the Government campaigned on, as there is no chance of them changing their mind as they have a clear mandate.

This assumes that a RIS is only useful for Governments, which isn’t the case at all.

RISs are gold dust for those of us who watch politics and the operation of power closely, whether as journalists or as Opposition MPs. They give us all a chance to see whether the Government department has properly made the case for making a change (the “problem definition” bit of a RIA) and properly set out the risks of undertaking this change, both in terms of wider effects to different groups (it will cost this group x) and in terms of implementation risks - ie it might just not work at all.

Officials, both at the agency preparing the paper and at Treasury who peer reviews most of the big ones for quality, get a chance to lay out these potential risks and even suggest a different approach to one favoured by a minister. You can actually see this in the just-published RIS on the Government’s move to remove the employment target for the Reserve Bank. This isn’t officialdom killing off reform ideas it doesn’t like - the Government can always pass what it likes - but it is officialdom getting a chance to put its thoughts to public paper.

This stuff is often fodder for attacking Governments with. The risks that rents would go up as a result of tax changes the last Government made were mentioned countless times by the Opposition. Some risks identified by public servants end up happening, leading to even more attacks. This is the lifeblood of democracy: An informed Parliament and commentariat able to argue with not just their views and the official statements of Governments as ammo, but with the very policy papers that Ministers looked at too.

It’s hard not to assume that this is a big reason behind this move by the new Government. It knows the power of a single line of a RIS used ruthlessly in the House and attack ads, even when that single line is actually not that bad in context. It knows that public servants looking at the distributional effects of some of its policies will say things that will result in bad headlines. And it’s had quite a few of them already.

The RIS is a good tool for showing the public this kind of analysis

RISs are of course not the only place this kind of analysis can live - it can be found in Cabinet Papers, departmental reports on legislation, select committee submissions, etc. One assumes that even the fastest moving Government will still produce a Cabinet paper on a repeal of primary legislation, and hopefully that paper will eventually be released to the public.

But the process around RISs has developed into a fairly strong bit of rigour that is worth defending. This process sees:

1. A department suggesting some kind of law change set out its reasons for doing so, including a problem definition, a consideration of risk, and often some detail on why alternative approaches were not taken.

2. A quality assessment on larger pieces of policy from a specialised Treasury team.

3. The publication of the RIS, as unredacted as possible, within 48 hours or so of a policy change being announced.

One of the key reasons the above process works so well is that Treasury are generally (but not always!) the ones who publish RISs, after they have done their quality review. Treasury have a nice little section of their website to do this on and have a culture that encourages openness about policy disagreements within Governments. In my experience, this meant that whenever a RIS was “late” you could call up Treasury and they would either put it up right away or tell you why.

This process is well-known and lets time-poor people² quickly get to the nub of how a new policy was thought out behind closed doors. That’s worth defending. And if you don’t do it through this process, there’s a good chance someone will just leak some other paper anyway.

Repeals deserve a RIS

Another key argument made by the Government is that the repeal of policies should not require a RIS, as the Government is simply returning things to the status quo, and can rely on the original RIS as a kind of mirror piece of advice.

I think there is a reason the John Key-led Government rejected this argument when it first set up the RIS process. Repeals are never as simple as just returning everything to an exact status quo.

To be fair, there is a spectrum here. Repealing laws that have not yet gone into full force, like the Smokefree legislation, is different to repealing something like the 90 day trial ban³, which has been in force for years.

But societies and governments change over time, especially in reaction to new laws, even when they haven’t gone into force. There is value in scrutinising, for example, the message that property developers will get when the Government repeals the new planning law known as the MDRS, which was going to make it legally mandatory for all major cities to allow three-storey townhouses everywhere. The planning changes to effect this law are not actually in place, but the repeal will still have a big impact on the construction industry’s confidence and the “status quo” has changed significantly since the law came into place and the original RIS was written.

Furthermore, if the old RIS really is fine to just flip on its head for the repeal, why not just ask the officials to do that? Surely a second look can’t hurt all that much?

The new Government has a mandate for change. Many will decry its rapid dismantling of the hard-won Fair Pay Agreements legislation, reintroduction of 90 day trials, and rubbishing of the Smokefree plan, but these are policies the parties in Government ran on. They have every right to enact them at the speed that they wish. But they should give us a look in on how they’re doing it.

Recommended reading:

It’s been so long since I’ve done one of these! There are far too many interesting things I want to point you to, and I’m sure I’ve forgotten some below, but here goes.

• Jo Moir’s interview with Chris Hipkins.

• Toby Manhire is very funny on the Government’s moves to de-emphasise te reo.

• I wrote a quick report card on the Government’s first week.

• The

  Environmental Integrity Project
  is a useful NZ perspective Substack on COP. (Hat tip
  Bernard Hickey
  .)

• This thread on weird TV news moments (mostly UK) is gold.

• I’ve just finished Small Things Like These by Claire Keegan, a short book as I am racing to try to finish 50 by the end of the year. Christ it is so good. Like you should just drop everything and try to read it before Christmas. It’s about Christmas - in a small Irish town in 1985. Go find it.

1. From what I can tell, a regulatory impact statement (RIS) sets out the process undertaken in a regulatory impact analysis (RIA). People end up using the terms fairly interchangably.

2. One of the worst things about Parliament is how many speeches you have to give. The House sits for about 90 days a year and for a certain proportion of those days you will be on “house duty” - basically a rota to make sure there is always enough MPs from each party in the House to make quorum and speak on all the various bills and business that come through. Most of the time you are just giving a speech on a bill that is probably fairly arcane to you, that your party may well be supporting or opposing for reasons that are obscure or politically fraught to explain. A RIS provides a fantastic summary of the weaknesses or strengths of any policy, giving you an aide memoire for your speech.

3. The new Workplace Relations Minister Brooke van Velden did indicate this change would have a RIA today.