Making Life Easier for Ratepayers and Businesses

Good afternoon and thank you for the invitation to talk with you today. We agreed the topic of my speech today would be 'Making life easier for ratepayers and businesses'.

That's what drives my current mission as a Minister and as an ACT member of parliament.

My two key portfolios are local government and regulatory reform. Both have their own challenges but are also interrelated. 

When ACT signed a support agreement with the National Party after the last election I sought the portfolios I now have. 

My preference of course was to be Prime Minister, but after briefly considering the idea I decided not to seek the job.  I am not sure if John Key would have agreed anyway!

But the next best things for me were local government and regulatory reform. And the Prime Minister agreed!

Today the government is releasing the first Government Statement on Regulation. It is important because it contains two key commitments:

- to introduce new regulation only when the government is satisfied that it is required; and

- to review existing regulation and remove requirements that are unnecessary, ineffective and costly.

These two commitments arose out of the Job Summit earlier this year where it was recommended that the government delay introducing new regulation that imposed extra and substantial costs on business.

But more importantly, the statement takes a sledgehammer to the nanny state approach of the previous Government by reasserting traditional kiwi values like individual autonomy and responsibility. 

This government will only introduce regulation where it is clearly in the public interest and when private arrangements cannot solve the problem.

We will require a particularly strong case to be made for any regulation that is likely to:

- impose additional costs on business during the current economic recession;

- impair private property rights, market competition, or  incentives on businesses to innovate and invest;  or

- over-ride fundamental common law principles.

I know how difficult it is for businesses struggling to keep up with the many new rules and requirements that have been introduced over the past few years. 

We realise the high compliance costs that are incurred and the time that has to be spent by businesses in dealing with these many and varied regulations.

I would much rather see business operators, like you, devoting your energy and talent to growing your businesses, creating jobs and earning income.

That is, after all, what will drive New Zealand's economic performance forward - not complying with burdensome regulations.

Today's announcement is not just about the number of regulations; it is also about the quality of regulations.

We still need regulations - they are a necessary feature of any lawful society - but they need to be reasonable, relevant and coherent.

We need to achieve a real culture shift in the approach of government agencies to regulation. 

The public service  implements regulation, and ultimately this will be where the Government Statement on Regulation will meet its sternest test. 

We will be making it very clear to the public service that the  change of Government means a change to the way that things will be done from now on.  

To help with this change, we are introducing the following measures to support the delivery of the Government Statement on Regulation:

- Departments must provide annual regulatory plans of all known and anticipated proposals to introduce, repeal or review legislation or regulation

- Departments must certify Regulatory Impact Statements and provide assurance that all policy options have been analysed and major risks and uncertainties identified

- Departments must put in place systems for continually and systematically scanning existing regulation to identify possible areas for reform or further review.

And to make sure that my Ministerial colleagues properly consider the principles in the Government Statement on Regulation, they will have to certify that any new regulation they are proposing is consistent with it.

Meanwhile the Government has begun rolling back several of the regulatory measures put in place by the previous Labour led Government.

A taskforce was set up earlier this year to recommend changes to the Regulatory Responsibility Bill, which demands that regulators show restraint and respect for private rights and interests. 

The taskforce will report back to the Government by the end of September.

We are also addressing other important areas, including the problems, delays and frustrations caused by the Building Act and the Resource Management Act.

Reviews of both these Acts are well underway to ensure that life is made easier for people to run businesses, builders to build, and DIYers to get on with their home improvements.

And I am not just committed to cutting red tape.  I am determined to absolutely slash it!

The government is introducing an annual Regulatory Reform Bill to address what we term 'low hanging fruit' - the infuriating laws that make life difficult for ratepayers and businesses.

Closing the income gap with Australia is a key goal of mine.  Recently I announced the establishment of the 2025 Taskforce, to be chaired by Don Brash.  We are fortunate to have someone of his calibre in this role.

The taskforce is a key component in the ACT-National confidence and supply agreement, reflecting the importance we place on working to close the income gap with Australia. That income gap is one of the reasons we lose so many talented, hard-working New Zealanders every year.

The Taskforce will provide an initial report in October this year.  It will identify the policy settings and changes that will deliver the productivity growth necessary for a stronger, more prosperous economy.  Further progress reports will then be provided in 2010 and 2011. 

This is not about setting up a group of important people to deliver a report and then hope for the best. It is about plotting our progress towards an end goal by 2025.

So far I have talked mainly about regulatory issues from a business point of view, while acknowledging the impacts on homeowners of legislation such as the Building Act.

I now want to talk about some of the issues we are addressing in the local government sector that affect commercial and residential ratepayers alike.

Before and since last year's election I have received thousands of letters and emails from ratepayers concerned about particular decisions of their councils, or the level of rates. These issues are closely linked.

Ratepayers and citizens have had unreasonable rate increases imposed on them in recent years. 

This is in large part due to the high and unacceptable costs imposed by central government on local government.

Successive governments have imposed large costs on local government without care or foresight.  Inevitably these costs are passed on to ratepayers, who are forced to pay.

So how are we addressing this issue?  At Local Government New Zealand's request we have put a moratorium on the introduction of drinking water standards.  There is a review underway to examine the impact of new air quality standards on the local government sector.

I have already mentioned the two prime examples of over regulation - the Resource Management Act and Building Act. 
The reform of these two Acts will go a considerable way to reducing councils' planning and regulatory costs. And that will produce a better result for ratepayers and businesses through lower costs and lower rate increases.

On a wider front, there is work underway to improve the Local Government Act. These improvements, when implemented, will contribute a more efficient and responsive local government sector.

The review aims to improve transparency, accountability and financial management. I want to see councils more engaged with their ratepayers and citizens.  After all it is ratepayers' money that provides the funding.

The work is being guided by three principles:

- local government should operate within a defined fiscal envelope,

- councils should focus on core activities, and

- council decision-making should be clear, transparent and accountable.

To ensure better fiscal management and a focus on core activities, councils need to take a strategic approach to budgeting by first establishing limits on expenditure, rates, and debt, and setting spending priorities within those limits.

Local government should be about enabling democratic local decision making and action by and on behalf of local communities.

The sector needs to shift the emphasis of decision-making from ‘on behalf of' citizens and ratepayers to ‘by' citizens and ratepayers.

As part of this work, we will be looking at the circumstances in which referenda and polls can be effectively used as decision-making tools. Referenda have already been used by some councils to gain a mandate for council spending and particular initiatives.

Currently the only opportunity ratepayers have to express their views is at local body election time every three years.
You will be aware of the recent publicity on the question of core council services. 

Since last year's election I have received thousands of letters and comments from ratepayers unhappy with a particular decision of their council. I am determined to oversee a better relationship between local authorities and their electors.

There is currently no formal definition of local authority core services. Officials are working on defining what are, and are not, core services.

I am not suggesting that the Government stop councils from doing things - despite what you might have heard in media reports.  Nor do I want to tell local authorities what they can and cannot do.

What I am proposing is that councils focus on core services and seek a citizen mandate for activities that are non-core services.  This will encourage greater local democracy and I think a better connection between councils and ratepayers.

You will all be aware of the changes to local governance in Auckland.  We want to transform Auckland into a great city in which do business, to live in and to visit.

For too long Aucklanders have been sold short by their local government because the structure and governance arrangements have not worked.

The Government is busy and so am I, along with my over-worked officials. The work programme is challenging, but it's also very exciting to be getting so much done.

I am determined to create a better business environment and more efficient, transparent and accountable local government.

New Zealand is a wonderful country of resourceful, energetic people.  I am determined to help unlock that potential, and make things much, much better.

Thank you again for the invitation to join you here today. I am looking forward to your questions and comments.