New Zealand's Regulatory Standards Act fails its first real test, commentator argues

HouGarden New Zealand, 21 September — The following reflects the views of the article's author and does not represent the editorial position of HouGarden.

Parliament this week sat under urgency to pass amendments to local government legislation, patching gaps exposed by the Fast-track Approvals Act — one of the current Government's flagship laws. The changes were prompted by alarm among councils in both the North and South islands after developers unveiled large housing projects without the required infrastructure, including wastewater treatment. Local authorities fear the shortfall could ultimately fall on ratepayers — property owners who pay local government rates — rather than on developers or central government.

Only last month, the Government was forced to apologise to pensioners after their winter energy payments were delayed. The cause was traced to what may have been a drafting error in the Social Security (Mandatory Reviews) Amendment Act, itself passed under urgency, which had not anticipated the systemic difficulties that arose when officials tried to implement the new policy. These are two separate incidents, the commentator notes, but they raise the same question.

That question is: had the Regulatory Standards Act 2025 (RSA) been properly applied, would either problem have been avoided?

The RSA was passed specifically to lift the quality of new legislation. It establishes principles of 'responsible regulation' and requires governments to assess proposed laws against those principles before enactment. The Act predates the Fast-track Approvals Act, and the social security amendment was rushed through under urgency — but the commentator asks whether applying the RSA's framework would have made any practical difference in either case.

The author's answer is largely no. One reason is structural: section 15 of the RSA places the duty of stewardship over regulatory systems on government chief executives rather than on portfolio ministers. The commentator argues this dilutes the constitutional principle of ministerial accountability. Ministers are supposed to be accountable for outcomes, yet when the winter energy payment blunder emerged, the Government's initial response was to point to officials.

On the Fast-track Approvals Act, the commentator argues the RSA's principles are unlikely to have caught the infrastructure gaps either. The Act's responsible-regulation principles prioritise the interests of property owners and developers. They require consideration of any 'taking, or severe impairment of property', consultation with affected stakeholders, and assessment of who will benefit and who will suffer from proposed measures.

Those provisions might, in theory, have prompted questions about the burden falling on ratepayers for developments that require new services and infrastructure. But the Act also instructs lawmakers to avoid unnecessary levies and fees — a direction that cuts against requiring developers to fund the infrastructure their projects need. The commentator notes there is no requirement in the RSA's principles to consider the principles of the Treaty of Waitangi or te ao Māori values.

The author argues that a more inclusive Regulatory Standards Act — one not solely neoliberal in its orientation — would have drawn on a broader legal tradition. As an example, the commentator points to the Supreme Court's decision in Ellis v the King, a real and significant New Zealand case in which the court held that tikanga, Māori customary law, now forms part of New Zealand's common law — not only in cases involving Māori, but potentially in any case, enriching what the court described as Aotearoa's distinctive system of precedent.

The commentator suggests that two tikanga concepts in particular could have informed better lawmaking. Manaakitanga — broadly, a duty of care and responsibility toward those affected by one's actions — spans the common law distinctions between a duty not to cause harm and a fiduciary duty to protect vulnerable parties. Whanaungatanga, understood as respectful relationships, would have required genuine engagement with stakeholders such as councils and ratepayers before legislation was finalised.

The piece closes by invoking Sir Geoffrey Palmer — former Prime Minister and one of New Zealand's leading constitutional scholars — who once described New Zealand as having the 'fastest law in the West'. Recent events, the commentator concludes, show that remains true, and that the measures meant to slow things down and improve quality are proving to be, in the author's words, 'mere ideological virtue-signalling'.

For property developers and buyers of new homes, the practical implication is straightforward: projects approved under the Fast-track Approvals Act may still face infrastructure constraints, and the question of who pays to resolve them — councils, developers, or ratepayers — has not been settled by the emergency amendments Parliament passed this week.