Nats promise to cut red tape, deregulate

Public Policy / news

The National Party says the New Zealand economy is held back by bureaucratic rules and it will simplify procedures to help the economy

19th Sep 23, 11:40am by Eric Frykberg

The National Party says it will cut back the layers of bureaucratic rules it says are thwarting business initiative.

Its leader Christopher Luxon says this is a key part of National's economic plan and is being unveiled ahead of the main announcement.

“Today we are announcing the first part of that plan – the actions National will take to cut red tape and complex regulations that are stifling our economy and making it too hard for New Zealanders to get things done," Luxon says.

Many of the aspects of this plan have already been foreshadowed. One of them is repeal of the Labour Government's reforms of the Resource Management Act (RMA): the Spatial Planning Act and the Natural and Built Environment Act.

The Labour Government said these bills would streamline the RMA but National says they would make it worse.

Also in National's sights are the Credit Contracts and Consumer Finance Act (CCCFA) and the Conduct of Financial Institutions Act (CoFI).

The CCCFA famously took people's coffee drinking habits into account when assessing their creditworthiness. Although Labour wound back the extent of these rules, National plans to go further.

It also plans to repeal CoFI, which some in the finance industry said needlessly duplicates another law which requires practitioners to get a Financial Advice Provider (FAP) licence before they can work in the finance industry. CoFI followed probes into the conduct and culture of banks and life insurers in 2018 and 2019 by the Reserve Bank and Financial Markets Authority. The incoming regime aims to ensure financial institutions do what's best for their customers over the entire lifecycle of a financial product, and introduces a fair conduct principle through which financial institutions are required to treat customers fairly.

National also says it will restore 90-day trials for businesses with more than 20 staff so they can trial potential employees.

National has also repeated its earlier pledge to lift the effective ban on Gene Editing (GE) and Genetic Modification (GM) to enable farmers to reduce their emissions.

Also promised is elimination of the need for resource consents for electric vehicle (EV) chargers and the streamlining of building consents and code of compliance certificates.

“Kiwi businesses thrive when we have a dynamic, competitive economy and it’s the Government’s job to get the settings right so that businesses can step up and achieve that," Luxon says.

"That means a predictable and consistent regulatory environment, with less red tape."

Despite National's comment, not everyone believes New Zealand businesses are throttled by red tape. New Zealand was named the easiest country in the world to do business in a series of studies by the World Bank up till 2020, when the studies were discontinued.

A more recent report, done this year by the Economist Intelligence Unit, rated New Zealand lower, and far behind the leader Singapore, but still in the top 10 countries world wide.

Another survey, by a libertarian think tank from Canada, the Fraser Institute, put New Zealand at number three, after Singapore and Hong Kong, for its degree of economic freedom.

Comments like these have been seized on by the economist for the Council of Trade Unions, Craig Renney, who points out that people in New Zealand can start a company online in 15 minutes.

On the other hand, it is common to hear anecdotal accounts of would-be business people spending tens of thousands of dollars on legal fees before they get to sell a single item to a customer.

One rich-lister, Chris Meehan told the New Zealand Herald that this country was the “land of the long red tape”, especially when it came to denying land for building houses, which only made people pay more for shelter than they needed to. Meehan was at the time engaged in a huge row over a building development near Auckland.

Farmers and the real estate industry operatives have also complained about the burden of regulation that they face.

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50 Comments

by Pa1nter | 19th Sep 23, 11:56am 1695081394

Comments like these have been seized on by the economist for the Council of Trade Unions, Craig Renney, who points out that people in New Zealand can start a company online in 15 minutes.

While this sounds like a good indicator of how "easy" it is to conduct business, in Singapore, if you had a drug addicted employee, you'd probably tell the cops.

In NZ, you're legally required to nurture them through their problems, whether they even want you to or not.

Much of our business environment has employers occupying a matriarchal role, and with regulations that has every business needing to operate a level of care in their day to day actions that assumes the worst possible thing might happen at every second.

by Te Kooti | 19th Sep 23, 12:37pm 1695083878

I'd love a matriarchal society. Everything is chill, no wars and the men go fishing everyday...

by Pa1nter | 19th Sep 23, 2:01pm 1695088914

Do you think a lady would let you live like that?

by Te Kooti | 19th Sep 23, 2:52pm 1695091951

I pretty much do live like that...

by Pa1nter | 19th Sep 23, 3:28pm 1695094102

Does she have a sister?

by malamah | 19th Sep 23, 1:01pm 1695085286

While I agree this shouldn’t be the responsibility of the employer, where do these people go? After watching a few proposed solutions for the next term, there seems to be a lot of notion that these people should lose their jobs, lose their homes, lose their benefit and end up in prison. On the surface this seems to get rid of the “problem”, but at a huge financial burden which seems to be brushed under the mat. I wonder if anybody has done a cost analysis on better rehab facilities. I’m sure prison guards are cheaper but I hear even they are leaving for better pay elsewhere

by Pa1nter | 19th Sep 23, 2:01pm 1695088876

Ultimately any drug addict will only sort themselves out when they want to, and not under anyone else's will.

Employer, friend or otherwise, the human thing to do is offer someone in trouble a hand. But on the flipside, if your drug problem is ruining your work performance/attendance, and you don't want help, there's nothing an employer can do.

by Hamish | 19th Sep 23, 3:46pm 1695095198

What if your work situation drives you to drink or harder drugs.......

by Pa1nter | 19th Sep 23, 3:49pm 1695095398

Leave or seek therapy, not a crack pipe.

by RickStrauss | 19th Sep 23, 1:36pm 1695087388

Singapore did at least prioritise fences at the top of cliffs too, by making housing affordable for their people (as in fairness did NZ's postwar govts for the benefit of today's older generations).

by Pa1nter | 19th Sep 23, 1:58pm 1695088711

Freehold housing in Singapore is 15x average income. Leasehold property, which you don't own, is 7x income.

It all catches up in the end.

by RickStrauss | 19th Sep 23, 3:58pm 1695095896

Yes and when policy changes results change too. So today's older generations benefitted from policies to create affordable supply of housing, and policy to turn it into a speculative investment instead.

Then we wonder at bad outcomes in society...

by Pa1nter | 19th Sep 23, 4:12pm 1695096769

I was talking more about Singapore.

The tendency for most places is to have diminishing housing supply, and increased prices. No one has really effectively resolved this issue.

by RickStrauss | 19th Sep 23, 5:03pm 1695099796

It's hard to deliver enough supply for a supported and guaranteed investment. Housing is another matter.

by False economies | 19th Sep 23, 11:56am 1695081366

Whenever you hear politicians talk about "cutting red tape" you just know there will be unintended consequences later on (leaky buildings, increased fraud, house prices increasing, deaths etc).

Classic false economies 😉

by Pa1nter | 19th Sep 23, 11:57am 1695081432

Conversely, many of the safeguards we put in, are paper thin, and super expensive to implement.

by Palmtree08 | 19th Sep 23, 11:57am 1695081452

A vote for the yeast party is a vote for permanent environmental degradation. If the NZ public give this party power, it's the end of our country as we knew it.

by dumbthoughts | 19th Sep 23, 12:07pm 1695082024

90 day trial policy interests me.

Some time ago I was let go under a 90 day trial. In fact, I was booted out the door on the very last day of the trial at about 4.45pm (wasn't even given a chance to go back to my desk and collect my stuff or say goodbye). I was able to challenge this owing to the case law - reference escapes me now - that found a 90-day trial was invalid if the employment contract wasn't signed before work commenced. I was never asked to sign my contract until the morning I was let go. In writing and in the contract we had also agreed to monthly performance reviews, which never took place.

Some years later, the now-owner of the business (who was just a shareholding partner then - the previous management I was terminated under was booted out by him when he took over) admitted to me when I wound up sat next to him in the airport lounge that I was hired along with another person to pick up slack on some anticipated projects. These never materialised as expected so I had little work to do, and while the other employee actually resigned and went back to his old job I stayed on and they used the system to make me redundant easily as the company was very short on cash.

While I was "done over" by the 90-day trial system, as a business owner myself now who works with a lot of smaller businesses I can see the appeal and do think there is some merit. Rather shamelessly, I've done well as a 'hired gun', getting contracts where an employer simply can't afford to make the wrong hire, as they know that although I command a far higher rate they can sack me off whenever with no consequences. I know for a fact some of my clients would rather hire staff (even sometimes I advise this) but they are worried about hiring a wrong 'un who becomes hard to get rid of; the potential costs can be catastrophic.

I think a 90-day trial system needs to strike a balance. E.g. there needs to be an agreed process for performance reviews and if the employer doesn't follow this the trial is void, and there needs to be some system to prevent it being used as a way of acquiring short term labour (which is what happened to me).

If that can be done, I think there are merits in making it more comfortable for smaller businesses to take a punt on employees.

by Nzdan | 19th Sep 23, 12:43pm 1695084218

I too was a victim of the 90 day trial once. I left the company I am currently with to take a punt in another industry. Was advertised as a hybrid internal/external sales role. First day on the job where's my company vehicle? Oh you have to share with the other rep.....

Despite getting out there, cold calling over the phone, bringing in new sales opportunities etc the business model operated in a niche market segment so had limited market share against big box stores and I was let go. Not long after my previous and current employer reached out to see where I was at and offered my old job back in a heart beat.

Heard later on the company quite frequently does this, whether it's to cater for temporary demand or to "take a punt" for growth but it really does play with people's lives. Being sacked not on your merits but because their business model sucks.

I agree, the 90 day trial is far too discretionary. Something in contractual form that gives the employee certainty that if certain metrics are achieved that they will have a job by the end of it, and measurable progress milestones are discussed/logged. That document then becomes the central point if they're let go before 90 days is up and they want to dispute.

by dumbthoughts | 19th Sep 23, 12:54pm 1695084862

Sounds all too familiar!

I had the same issue - job sounded great on paper with lots of interesting work to do. Get there and within first week none of it materialised, an I spent the next ~3 months literally running random errands (e.g. one day I had to take the coffee machine in for repair, the next day I was chauffeuring the managers to and from the airport, or organising the Friday lunches).

Per your third para, exactly the same deal. It was all about trying to fill some temporary, anticipated demand.

I agree that the system needs some kind of 'mandated' approach e.g. MBIE (or whichever government department) provides a structured, templated process that must be used. E.g. there must be a monthly performance review with documented outcomes and any performance issues that might affect ongoing employment are to be listed and opportunity given to address them. If the process is not followed to the letter, then the trial is invalidated.

by Nzdan | 19th Sep 23, 1:22pm 1695086562

Until the 90 day trial becomes more formalized, I won't agree with it. Just like no cause tenancy evictions, puts far too much power in the hands of those who already have power. Otherwise what's next? No-cause arrests by the Police under the guise that we want to keep the community safe?

I do agree with the concept of 90 day trials, but needs to strike a balance. If a business is hiring someone under a 90 day trial, they should have sufficient cashflow to carry on employing past that 90 days. But someone hired for 90 days instantly loses their income through no fault of their own, and if they had the benefit of hindsight would have needed to start interviewing for jobs on day 1 of the trial period to minimize disruption.

by kiwikidsnz | 19th Sep 23, 12:18pm 1695082711

From the people who have promised this for over 3 decades, including 9 years ignoring their promised RMA reform.

It won't happen without ACT riding them.

by kiwi_overseas | 19th Sep 23, 12:25pm 1695083129

So predictable from Nats.

Our economy is held back by the unequal tax treatment of capital gains.

The country pours capital into uselessly and totally unproductively bidding up land prices rather than putting it to productive use.

Nationals proposed brightline test changes and lack of tax changes continue down the same track.

by HSL | 19th Sep 23, 12:48pm 1695084504

You couldn’t be more wrong…..and to prove it. There are many countries that have CGT, and also have a massive wealth gap (USA for instance). The problem is not caused by tax policy, it is caused by a country being unproductive, and governments printing money. Cutting red tape will reduce costs of compliance which in turn will boost productivity. Great policy again. I’m still on the fence between national and act but think voting for the strongest Candidate out of the two locally and party vote the other.

by RickStrauss | 19th Sep 23, 12:59pm 1695085175

Dreamy.

We're unproductive because policy has pushed malinvestment, so much money flowing into land speculation instead of building a business.

No one wants to work anymore. They just want free wealth from housing.

by Foxglove. | 19th Sep 23, 2:03pm 1695089009

Not only not wanting to work in the first place but equally bad is how what work is done, is done. Far too much of NZ’s bureaucracy operates on the basis of all authority, no responsibility. Hence the haste to engage consultants at any whim, in order to be able to lay the blame elsewhere. If National become government though they are going to have utmost difficulty in penetrating let alone shifting this entrenched bloc, culture. Heck even a cut through artist such as Richard Prebble had a hatful of challenges progressing such matters in the 80s as Railways minister for example.

by Pa1nter | 19th Sep 23, 2:04pm 1695089085

We're unproductive for a range of reasons. One of the biggest problems is someone else is prepared to do it cheaper, on easier terms. So you end up having to develop a business that can't be replicated easily by a competing market, that is of significantly higher value.

Ever tried running a decent sized business?

by buyandhodl | 19th Sep 23, 2:17pm 1695089841

You do realize you are discussing a problem that is primarily caused by red tape ensuring supply can never keep up with demand right?

Buying lots of houses is suddenly a lot less profitable if there is an abundant supply of properties relative to demand, ample capacity to meet growth, and a nimble planning system that can meet unexpected peaks in demand on a dime...

by kiwi_overseas | 19th Sep 23, 2:29pm 1695090553

Yes, the land issue is multidimensional.

a) unequal tax treatment

b) unsustainable immigration rate

c) overly regulated land use until MDRS

d) previously record low interest rates.

Doesnt take away the fact that the tax treatment distorts investment.

by buyandhodl | 19th Sep 23, 3:32pm 1695094374

Yeah somewhat, but it's the rest that turns it from a small problem into a very large one.

by kiwi_overseas | 19th Sep 23, 2:31pm 1695090711

No doubt regulations could be streamlined and reviewed from a cost benefit perspective.

But deregulation, no.

Farmers are already using public groundwater supplies as their private sewer.

We do not need further environmental and social degradation.

by Pa1nter | 19th Sep 23, 2:52pm 1695091948

Farmers are already using public groundwater supplies as their private sewer.

I guess it's a sentence like this which is the problem behind legislative thinking.

"Some" farmers might be doing this.

"All" farmers then have to put in mitigating measures because of the "some".

So you have entire sectors bearing costs, over the actions of a few. And it never ends, and eventually you get more commercial entities falling by the wayside, and less entering. And wondering why our productivity is in a spiral.

This isn't to say I'm against any regulation, but that compliance runs counter to productivity.

by RickStrauss | 19th Sep 23, 4:00pm 1695096013

Could just remove a bunch of regulation and replace it with personal responsibility. Make the cost of pollution cleanup user-pays and let farmers (and all other polluters) decide their preferred approach.

It's the socialising if costs that distorts.

by Pa1nter | 19th Sep 23, 4:14pm 1695096878

It's the universal application that distorts, the economy has to pay to assume every actor is bad.

The alternative is a US style system, but that's over litigious.

by Llama_360 | 19th Sep 23, 1:56pm 1695088615

I am 35 and have been somewhat a centrist since I became eligible to vote. Until recently, I thought that all politicians want to pursue policies that they genuinely believe are in the best interests of the country as a whole and will benefit the little people as well as the wealthy. However, I am now really struggling to decide whether I should vote for a group who I still think have the best intentions and have made some real efforts to tackle systemic issues with housing and tax, but have made some rather big blunders in other areas, or the people who should just admit that they are only interested in making things better for "the right sort of people" who are already well off. I'm not sure whether National's agenda is set by lobbyists, whether it is self-interest/borderline corruption on the part of the MPs themselves or whether they really have just drunk the Kool-Aid and are incapable or critically analysing how their ideology will actually play out in practice. There are many social and economic issues that I am not well informed enough about to form an opinion about which party has the best policies but from what I do know, I would not trust anything being said by National / Act about those issues as they just seem to be acting in bad faith when it comes to tax/housing.

by Albert2020 | 19th Sep 23, 2:03pm 1695088984

Great comment. Just go and watch luxons newshub nation interview to see who he really is sticking up for, it ain’t the squeezed middle

by kiwikidsnz | 19th Sep 23, 2:21pm 1695090074

National's agenda may be one thing to consider, Labours track record is another.

A long & depressing read

https://www.bassettbrashandhide.com/post/alex-holland-labour-s-failures

https://www.bassettbrashandhide.com/post/alex-holland-race-based-division

by Larry76 | 19th Sep 23, 2:35pm 1695090937

From a website run by 2 slaves to Rogernomics and a racist baffoon. Quality reading /s

by kiwikidsnz | 19th Sep 23, 2:46pm 1695091584

Another ad hominem response...

Looking forward to seeing a list of errors & corrections ..../s

by blobbles | 19th Sep 23, 8:35pm 1695112511

That's why you shouldn't vote for either of them. There are more than 2 choices you realise?

National are, by and large, captured by special interests. Mainly business groups and property investors. Hell, the leader IS a property investor, who has already avoided the question multiple times of lowering the rent on his rental properties, if they were to change the interest deductibility rules back. Of course he will say he can't "cos Labour pushed up interest rates" or similar

Don't vote for either of them. Protest vote a small party, if you are centrist, TOP is considered extreme centrist.

by ChrisOfNoFame | 20th Sep 23, 3:54pm 1695182071

I am doing exactly this.

At present it'll be two ticks Green.

But if TOP look like taking a seat - I'll switch. Why? The land tax is simple and very hard to escape and it absolutely nails "property investment" into a coffin it should have been in 30 years ago. The Green's wealth tax is trickier but still workable. Both should, IMO, set their rates differently (TOP's lower) and Greens wealth limit somewhat higher (or perhaps regionally). Both can be adjusted over time.

In any event - I'm sick and tired of the gutless action from the purple parties (and their looney, extremist potential coalition partners whose policies are either sound-bite-ist, experimental. or at the whim of some fringe group ... or just plain looney.)

by Smudge02 | 19th Sep 23, 12:37pm 1695083879

I really wish politicians and political parties would stop using the work "promise", like a child promising to behave with their fingers and toes crossed.

At the end of the day there is literally nothing that they could "promise" to do. It simply devalues the meaning of the word.

by ChrisOfNoFame | 19th Sep 23, 3:41pm 1695094905

Wasn't it the Nats that "cut red tape" in the building industry and we ended up with 000's of leaky houses? That sure went well.

by RickStrauss | 19th Sep 23, 4:02pm 1695096138

Caused ~$50 billion of damage with their leaky building crisis. Sold off rail. Killed coastal shipping.

Folk who never grew out of their teenage Ayn Rand phase can be very costly to society.

by Nzdan | 19th Sep 23, 5:28pm 1695101336

Ayn Rand economics currently adds about $18b per year in social welfare costs in the form of benefits to people based on age, regardless of need.

by Simon | 19th Sep 23, 3:53pm 1695095612

The "wasteful speeding" argument is 100% fact based.

Govt don't get multi quotes.

All consultants, companies double their price for govt and they pay it as it's not their money they have targets to meet but saving money is NOT one of them!

Pay way over price for housing - both buying housing and to landlords they pay 2x rent - take emergency housing - over 1k a day for a studio 1 bed motel unit (we the tax payer still, 6 years on, are paying this and its only snowballed).

Bring it on Nats and Act. Cull season!

by HouseMouse | 19th Sep 23, 4:13pm 1695096804

A major gain would be to reform urban development legislation so all development regulation is standards-based. If you comply with the standards you don’t need resource consent.

In most zones in Auckland you automatically need resource consent for a development comprising four or more dwellings. And then it becomes a discretionary process full of discretionary calls on what constitutes ‘good urban design.’ It’s an absolute nightmare, takes a long time and costs a lot of money. For often minimal if any benefit.

if you have a performance standard system, you comply with the standards then can avoid resource consent! If you don’t then you go through the pain of a consent. Creates a great incentive to comply!

by ChrisOfNoFame | 20th Sep 23, 3:58pm 1695182318

100% agree. Works in lots of other countries. But that's not to say it works perfectly. The locals still get to gripe about anything new.

by nzforall | 20th Sep 23, 6:13pm 1695190396

There are bound to be a couple of Nats who have to resign in disgrace- like last time.

And with NZ First superannuation will stay as it is along with the Gold Card.

NZ First are the only party who looks after the elderly and soon to be elderly.

by Nzdan | 21st Sep 23, 8:51am 1695243087

Superannuation, the untouchable liability on all young taxpayers. We'd rather cut back essential services such as health and police before we'd even consider having the discussion around who actually needs an old person's benefit.