Better quality regulation - Leading the development of better quality transport regulation and frameworks

Well-functioning markets need both good regulation and good regulators. This section addresses the issue of good regulation, while ‘good regulators’ is addressed under the intermediate outcome ‘Improved government transport agencies’ performance’.

Improving the quality of regulation and removing any unnecessary regulation is an important part of the government’s economic programme. It will enhance NewZealand’s productivity growth and international competitiveness. 

Regulation directly affects how markets, and firms in those markets, operate and allocate resources. Regulation can support markets operating effectively and reduce anti-competitive practices. Poor quality regulation can constrain growth by creating incentives for socially and economically unproductive activities and increasing the costs of doing business.

Lifting the quality of transport regulation will:

  • minimise regulatory costs and charges so businesses and others are not burdened by unnecessary compliance costs or outdated regulation
  • help markets function well by ensuring regulations do not inadvertently create barriers to entry, reduce the effective flow of information, confer monopoly rights or inhibit innovation
  • ensure transport regulation is well understood and compliance is maximised.

The Ministry's role in better quality regulation

The Ministry's role is to promote transport regulation and frameworks that represent good practice. It supports the government in achieving its policy objectives, recognising that transport Crown entities exercise statutorily independent roles and powers.

The Ministry contracts with the Civil Aviation Authority, Maritime NZ and the NZ Transport Agency each year for their annual rules development programmes. The Ministry needs to effectively manage the annual regulatory programme with the transport Crown entities. It also needs to ensure regulatory proposals represent the best solution, do not impose unnecessary costs on users and are prepared efficiently and on time.

To deliver better quality regulation and frameworks the Ministry will:

  • increase the efficiency of the transport regulatory system so it does not impose unnecessary costs on users or prevent effective operation of the market.

Better quality regulation – what we intend to achieve

The Ministry’s intended impacts in this area over the next four years, and the projects and activities that will deliver them, include the following:

Impact 1: A more efficient transport regulatory system that does not impose unnecessary costs on users

A fit-for-purpose regulatory system

The Ministry will take a leadership role and work across the transport sector to consider whether the regulatory system is fit-for-purpose and, if not, what further opportunities might exist for improving regulatory outcomes. This will involve thinking more broadly about what constitutes regulation and what outcomes the government and the sector want from the regulatory system.

The Ministry’s Regulatory Reform Programme has:

  • identified several key areas for reform
  • streamlined the regulatory design process so it is more efficient and timely
  • brought increased rigour into the rules process so only matters that genuinely require a rule are included in the programme.

The Ministry has established a programme to periodically review transport legislation and subordinate regulation to ensure that it remains fit-for-purpose. This programme includes an initial assessment of whether particular aspects of the regulatory framework impose unnecessary cost on users and whether there are better alternatives, for example, less or no regulation, different regulation or non-regulatory policies. The Ministry is examining transport regulation to identify where regulations, or the application of these regulations, may be inhibiting the effective operation of markets and to better understand the factors contributing to such unintended effects.

Civil aviation law reform

We are reviewing a number of economic, safety and security issues relating to the Civil Aviation Act to ensure it is fit-for-purpose. We will also review the Airport Authorities Act for the same reason. We will provide advice to the Minister, and consult on proposed changes to these Acts by the end of June 2014.

Annual rules programme

The Ministry will actively manage the annual rules programme with the Civil Aviation Authority, Maritime NZ and the NZ Transport Agency to ensure regulation is of good quality and to improve safety and environmental outcomes. The allocation of funding for Crown entity rule development will be moved to a contestable basis. This will allow funding to be allocated flexibly, in response to shifts in government rule-making priorities, while also recognising the need to retain and develop the skilled people needed for efficient and effective rule-making across the transport sector.

Driver licensing reform

The Ministry is reviewing the current Driver Licensing Rule, ensuring it reflects the needs of the transport system. The review aims to clarify the Rule, reducing and simplifying compliance requirements and transactions. We will provide advice to the Minister and Cabinet on changes to the Rule in 2015.

Vehicle licensing reform

The Vehicle Licensing Reform project identified opportunities to reduce the regulatory burden of the four vehicle licensing regimes, while ensuring the ongoing robustness and safety of the transport system. Following Cabinet’s agreement to reform the warrant of fitness and certificate of fitness systems in early 2013, the Ministry and the NZ Transport Agency have been working on the implementation needed to realise an estimated $1.8 billion in benefits to motorists and businesses over 30 years. The savings will come from reduced warrant of fitness inspection and compliance costs, justice and enforcement costs, and less time spent by motorists getting a warrant of fitness, and will have a flow-on benefit for the wider economy.

The certificate of fitness reforms will lead to productivity improvements for transport operators by reducing the time commercial vehicles are out of service. The estimated $160-460 million in benefits (to the commercial vehicle sector) over 30 years should start to be realised during 2015 with the first appointments of new inspection organisations, sites and inspectors.

Further work is being undertaken to develop specific proposals to improve annual vehicle licensing compliance.

Road user charges

Following on from the first evaluation of the Road User Charges Act 2012 in 2013, we will complete the second scheduled evaluation in 2014. The second evaluation will focus on how well the new system is working and how this relates to the outcomes that were expected from the road user charges system reform. The evaluation will link with, and build on, the first cycle evaluation results. It will inform ongoing implementation and maintenance of road user charges legislation.

Better quality regulation – how performance will be assessed

Outcome measures

Changes to transport regulatory environment are estimated to provide a net economic benefit to the economy.

Regulatory changes commonly involve a mix of monetarised and non-monetarised costs and benefits. An assessment of 16 regulatory impact statements in 2012 identified monetarised benefits of $19.65 million per annum for 10 years.

100 percent of transport regulatory impact statements are assessed as ‘meets’ or ‘partially meets’ quality criteria.

In 2013/14 (to 31 March 2014) all 9 of the Ministry’s regulatory impact statements met the quality criteria (100 percent)

2012/13: 10 met, 3 partially met;

2011/12: 6 met, 11 partially met, 1 did not meet quality criteria;

2010/11: 9 met, 1 partially met;

2009/10: 15 met, 8 partially met.

Impact measures – a more efficient transport regulatory system that does not impose unnecessary costs on users

90 percent of the scheduled programme of periodic reviews of regulations and rules completed in scheduled review year.

100 percent of the 2012/13 programme of periodic reviews was completed during the year. This was a new measure in 2012/13. 2013/14 is tracking at 100 percent.

Reduced average timeframe for rule development (from commencement of rule development process to rule coming into force).

Average age of rules projects

2009/10

2010/11

2011/12

2012/13

2013/14

3.9 years

4.5 years

4.9 years

3.5 years

3.3 years as at 31 March 2014

 

Previous: Intermediate outcomes  |  Contents  |  Next: Transport markets