Leading the development of better quality transport regulation and frameworks

Better quality regulation is important to the government

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 New Zealand’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.

Across the world, governments are revisiting their approaches to regulation. As a sector, transport can make changes to create new and innovative ways of tackling policy problems.

Lifting the quality of transport regulation will help markets to function well by ensuring:

  • regulatory costs and changes are minimised, so businesses and others are not burdened by unnecessary compliance costs or outdated regulation
  • regulations do not inadvertently create barriers to entry, reduce the effective flow of information or confer monopoly rights
  • 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 New Zealand and the New Zealand 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 – Ministry impacts and actions

The Ministry’s intended impacts in this area over the next three 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

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.

The Ministry will examine transport regulation to identify whether the regulatory system may be inhibiting or preventing the effective operation of markets.

We will review 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.

The Ministry will actively manage the annual rules programme with the Civil Aviation Authority, Maritime New Zealand 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. The Ministry will review the current Driver Licensing Rule, ensuring it reflects the needs of the transport system. The review aims to simplify and clarify the expression of the Rule, reducing and simplifying compliance requirements and transactions. We will provide advice to the Minister and Cabinet on changes to the Rule in early 2014.

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, the Ministry and the NZ Transport Agency are 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 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. Further work is being undertaken to develop specific proposals to improve annual vehicle licensing compliance and to review the scope and management of transport services licensing to better target risk.

We will complete an evaluation of the new Road User Charges Act, following its first year of operation. Recent reforms were the first major change to the system in 30 years. The evaluation will help to assess the success of the changes in simplifying and modernising the system, removing opportunities for evasion, and reducing compliance costs for businesses and the public. It will inform ongoing implementation and maintenance of the new legislative framework.

 Better Quality Regulation
Outcome measures
Changes to transport regulatory environment are estimated to provide a net economic benefit to the economy  This is a new measure and historical data is not available. Data will be drawn from Ministry regulatory impact statements to identify the aggregate benefits and costs of charges to the transport regulatory system.
100 percent of transport regulatory impact statements are assessed as 'meets' or 'partially meets' quality criteria.  In 2012/13 (to 31 March 2013) five of the Ministry's regulatory impact statements met the quality criteria and two partially met the quality criteria (100%).
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 scheduled programme of periodic reviews of regulations and rules completed in scheduled review year.  The programme of periodic reviews is a new initiative.  Data for previous years is not available. 
Reduced average timeframe for rule development (from commencement of rule development process to rule coming into force). Average age of rules projects
2008/09  2009/10  2010/11  2011/12  2012/13 
3.3 years  3.9 years  4.5 years  4.9 years  3.5 years 

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