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Regulatory impact statement requirements

When is a regulatory impact statement
required?

All policy proposals submitted to Cabinet that result in government bills,
statutory regulations, or that propose that the government support or adopt a
Members' bill must be accompanied by a regulatory impact statement (RIS), unless
an exemption
applies.

'Statutory regulations' has the same meaning as 'regulations' in the Regulations (Disallowance) Act 1989. This means that a RIS is
required for any proposals for deemed regulations submitted to Cabinet for
consideration. This includes when statutory regulations are to be made by
individual Ministers under an enabling power in an Act and the Minister's
decision is referred to Cabinet for noting.

A RIS is required at the time 'in principle' or final decisions are sought
from Cabinet and before the preparation of drafting instructions on the bill or
regulations. It does not need to be resubmitted with the actual bill or
regulations. A RIS is not required for Cabinet submissions seeking intermediate
decisions, but it may be prudent to provide a draft RIS at this stage.

Departments are required to include the RIS when circulating Cabinet papers
for departmental consultation, including to their usual Treasury Vote team
contact. When circulating the RIS with the Cabinet paper, departments should ask
other departments to comment on the RIS as well as on the Cabinet paper.

What information should be
included in the regulatory impact statement?

The RIS must contain the following information (these headings are a useful
guide to the analysis that needs to be undertaken in developing a proposal). A
Word template setting out these headings is attached to the Regulatory
Impact Analysis Guidelines, which are available on the Treasury website at
http://www.treasury.govt.nz/publications/guidance/regulatory/impactanalysis.

Executive summary

One paragraph of no more than 150 words summarising the problem, the
preferred option, and the main impacts.

Adequacy statement

A statement about who has reviewed the RIS (either the Treasury's
Regulatory Impact Analysis Team or the name of department that has
reviewed the RIS) and whether the RIS is adequate according
to the criteria agreed by Cabinet.

Status quo and Problem

A brief, high-level summary of relevant key features of the current
situation - not just features of the current regulation.

A summary of why government action is needed, including why the current
arrangements are insufficient to address the problem. This should contain an
appropriate level of detail on the costs and benefits of the status quo
(including compliance costs, risks and opportunities).

Objectives

The objectives that options are measured against.

Alternative options

For each option that is neither the status quo nor the preferred
option:

a brief, high-level summary of key features of the option;

why it is not the preferred option, including an appropriate level of
detail on the benefits and costs (including compliance costs, risks and
opportunities).

Preferred option

A brief, high-level summary of key features of the preferred option.

Why it is preferred and a statement of all of the proposal's impacts,
including details of the benefits and costs (including an assessment of the
proposal's net benefit, where possible and appropriate).

A risk assessment with a description of how risks will be/are being
mitigated.

Steps that have been taken to minimise compliance costs, if any.

A paragraph that briefly describes how the preferred option would impact
on the stock of regulation, including whether the proposal overlaps and
interacts with existing rules, whether the proposal makes any existing rules
redundant, and whether these rules are being removed or altered as part of
the proposal.

Implementation and review (note: this section does not
need to be completed for tax policy proposals)

How the proposal will be given effect, including timetables where
available.

Plans for notifying affected parties of what they need to do to comply
with any new requirements, if any.

The enforcement strategy that is to be implemented to ensure that the
preferred option achieves the public policy objective, if any.

Plans for monitoring and evaluating the preferred option, including key
dates, if any.

Consultation

Who was consulted in the course of developing the policy proposal? What was
the form of consultation? Key feedback from stakeholders and government
departments on each of the options considered, with particular emphasis on any
significant concerns that were raised about the preferred option, how the
department authoring the RIS altered the proposal to address these concerns,
and, if they did not alter the proposal, why not.

When providing a discussion of impacts of options, the RIS should not be
limited to economic concerns, and should examine the full range of outcomes
including social, cultural, health, and environmental outcomes.

The RIS should provide a summary of the required information and should focus
on the analysis of the options, including why the preferred option is best.
Background elaboration should be kept to a minimum. The RIS needs to be able to
stand alone. Departments should clearly specify the assumptions they have made
about the drivers of the problem or issue and how the proposed solutions will
influence these drivers. The length of the RIS will depend largely on the
complexity of the problem under consideration, the number of options considered,
and the extent of the analysis conducted on the proposal and the alternatives,
which should be appropriate given the magnitude of the proposal.

Related pages

Exemptions
from regulatory impact statement requirements

The
content for the Regulatory Impact Analysis section in Cabinet
papers