Why the Government’s proposed Regulatory Responsibility Bill is ill- founded, constitutionally radical, and likely to hurt democracy.
John Key yesterday announced in his speech from the throne that the Government “will introduce a Regulatory Responsibilty Bill and send it to a Select Committee for submissions and debate". In a guest paper for Maxim Institute, my colleague Dr. Richard Ekins and I explain why the version of the Bill that is publicly available (or any likely variations on it) shouldn’t be enacted. Here are those reasons in brief.
The draft Bill is supposed to make our legislators lift their game. While the PM’s announcement hasn’t yet generated much media attention, the Bill would be a highly significant constitutional change: it is essentially a second Bill of Rights Act 1990. The 1990 Act contains rights that are said to be the product of a stable, strong consensus at international law; the Regulatory Responsibility Bill would protect so-called “principles of responsible regulation.”
No sound case has been made for this kind of think-big constitutional reform. The current version of the Bill (and the principles it contains) is the product of the Regulatory Responsibility Taskforce, which was set up by the Government as required by the National-ACT Confidence and Supply Agreement. The Taskforce gave no good evidence that law-making in NZ is in crisis, did not diagnose the cause of any such problem, and did not consider the range of possible treatments. Instead, its Terms of Reference required it to single-mindedly focus on producing a draft Bill.
The Bill has two serious flaws.
First, some of the “principles of responsible regulation” are unorthodox and unsound.
For example, one of the principles is that legislation should not take or impair property unless it is in the public interest and full compensation is paid. This principle isn’t just limited to the expropriation of property – which the Public Works Act 1981 generally requires compensation for anyway – but would essentially create an extremely wide presumption against any law or regulation that changed how property could be used.
For example, it could be argued that if Parliament wished to criminalize prostitution, this would be a taking of the goodwill of what would otherwise be lawful brothels, and that brothel owners must be compensated. Or that the sellers of a newly-invented drug for recreational use should be compensated if sale of the drug is prohibited.
Second, the way that the principles of responsible regulation would be enforced under the Bill would harm law-making.
People who dislike a democratically enacted law would be able to seek a declaration from the courts that the law is inconsistent with the principles of regulatory responsibility. Judges would have to settle the meaning of the generally vague and highly unorthodox principles, and then decide whether any limitation on the principles is “justified in a free and democratic society”.
This is not statutory interpretation as normally understood, but involves moral, social, and economic – in a word, political – judgments. But judges lack the democratic legitimacy to make these judgments. Further, they are not well placed to make political judgments: they do not have to consult with other affected parties or the wider public.
Although the Bill does not allow judges to strike down legislation that they find inconsistent with the principles of regulatory responsibility, Parliament may well defer to judges’ decisions. Indeed, this appears to be how the Bill is intended to “work”. That would be an abdication of Parliament’s role, which should be to decide what should be law in a free and democratic society, rather than guessing what judges will think and trying to mimic that.
The Bill also requires judges to interpret legislation consistently with the principles of regulatory responsibility where possible. This could lead to judges adopting interpretations of legislation that are strained and inconsistent with what Parliament intended. The established meanings of all legislation and regulations would be unsettled.
The final enforcement mechanism is that the Bill requires senior public servants to certify whether proposals for law comply with the principles. This would politicize the civil service, and create an incentive for Ministers to appoint politically congenial Chief Executives of government departments.
In sum, while the motivation of improving law-making is laudable, the Regulatory Responsibility Bill is not well-grounded, would be a significant constitutional change, and would likely harm law-making. It should not be enacted, and the time and effort of considering it in Select Committee would be better spent considering other options to improve law-making.
The upcoming constitutional review provides a good opportunity to reflect critically on the law-making process, diagnose any problems that may be found, and consider the range of possible responses. (Indeed, given its constitutional significance, it is unclear why the Regulatory Responsibility Bill is being moved outside the constitutional review process.) In our paper, we outline some other options for improving law-making, such as reconsidering the use of urgency and investigating ways to improve post-implementation review of legislation. With resourcing of the magnitude already devoted to the Regulatory Responsibility Taskforce - $585,000 over about six months - much progress on these other options could be made.