Parliament to Revise Compensation Clause in Regulatory Standards Bill

The parliamentary committee reviewing the Regulatory Standards Bill, introduced by David Seymour, has proposed significant changes regarding property compensation. On March 31, 2023, the finance and expenditure committee recommended that property owners should only receive compensation from the state if they experience “severe impairment” to their property.

While the majority of the committee advocates for the bill’s progression, opposition from the Labour Party and the Green Party remains strong, with all three opposition parties voting against the legislation. The Ministry for Regulation’s report, referenced in the committee’s findings, revealed that out of 159,000 submissions received on the bill, an overwhelming 156,000 (or 98.7 percent) opposed it.

The government contends that the bill aims to enhance the quality of lawmaking by aligning it with core principles like the rule of law, property rights, and good governance. It also proposes the establishment of a ministerially-appointed board to evaluate laws for adherence to these principles, although the board’s recommendations would be non-binding.

One of the most notable amendments comes from the committee’s recommendation to redefine the compensation clause. Previously, it stated that legislation should not take or impair property without owner consent unless justified by fair compensation. The new recommendation suggests that “fair compensation” should be mandated only when property experiences “severe impairment,” raising questions about the definition of severity and the conditions under which the Crown would owe compensation.

This proposed alteration has sparked concerns among Labour MPs, who argue that the bill’s approach is fundamentally flawed and ideologically driven. They highlighted that legislation requiring public-facing businesses, such as shops and cafes, to retrofit accessibility ramps could be classified as an “impairment” on property rights. Labour argued that such measures are crucial for ensuring equitable access for disabled individuals.

Debate continues within the committee. Labour MPs expressed their disappointment, stating, “There are a host of reasons why this committee should recommend that this bill not pass. It is unworkable, ideological, and deeply flawed.” They emphasized the risk of discouraging important legislation aimed at improving accessibility.

In a further critique, the Green Party has pledged to repeal the bill and disband the Ministry for Regulation should they gain power in the upcoming elections. They criticized the bill as part of a broader libertarian agenda, arguing that it undermines essential regulatory frameworks.

The committee’s report also recommended clarifications regarding which legislation would be exempt from the bill’s consistency assessment requirements. This would include laws that implement Treaty settlements and those recognizing agreements under the Marine and Coastal Area (Takutai Moana) Act.

The National Party and New Zealand First have also expressed reservations about the bill, indicating that internal coalition discussions are ongoing. Winston Peters, leader of New Zealand First, previously described the bill as a “work in progress.”

As the coalition government reviews these recommendations, the proposed law is expected to return to Parliament for a second reading. The government aims to pass the bill before the end of the year, with a target implementation date set for early 2026. The ongoing debates reflect deep divisions between the parties regarding the fundamental principles of good lawmaking, and it remains to be seen how these discussions will evolve in the coming weeks.

Regulation Minister David Seymour has been approached for comment on the committee’s recommendations and the next steps regarding the bill.