Regulatory Standards Bill Passes First Reading
In a high-cost economy, regulation isnt neutral – its a tax on growth. This Government is committed to clearing the path of needless regulations by improving how laws are made, says Regulation Minister David Seymour.
Minister for Regulation
Regulation Minister David Seymour welcomes the passing of a Bill for transparent and principled lawmaking, with the Regulatory Standards Bill passing its first reading in Parliament today.
'New Zealand's low wages can be blamed on low productivity, and low productivity can be blamed on poor regulation. To raise productivity, we must allow people to spend more time on productive activities and less time on compliance,' says Mr Seymour.
The Regulatory Standards Bill:
• provides a benchmark for good legislation through a set of principles of responsible regulation
• enables transparent assessment of the consistency of proposed and existing legislation with the principles
• establishes a Regulatory Standards Board to independently consider the consistency of proposed and existing legislation, and
• strengthens regulatory quality by supporting the Ministry for Regulation in its regulatory oversight role.
'In a nutshell: If red tape is holding us back, because politicians find regulating politically rewarding, then we need to make regulating less rewarding for politicians with more sunlight on their activities. That is how the Regulatory Standards Bill will help New Zealand get its mojo back. It will finally ensure regulatory decisions are based on principles of good law-making and economic efficiency,' Mr Seymour says.
'Ultimately, this Bill will help the Government achieve its goal of improving New Zealand's productivity by ensuring that regulated parties are regulated by a system which is transparent, has a mechanism for recourse, and holds regulators accountable to the people.
'The law doesn't stop politicians or their officials making bad laws, but it makes it transparent that they're doing it. It makes it easier for voters to identify those responsible for making bad rules. Over time, it will improve the quality of rules we all have to live under by changing how politicians behave.
'In a high-cost economy, regulation isn't neutral – it's a tax on growth. This Government is committed to clearing the path of needless regulations by improving how laws are made.'
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1News
6 hours ago
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NZers are not getting a 'raw deal' on butter, says Nicola Willis
The Finance Minister does not believe New Zealanders are getting a "raw deal" on butter, but has accepted there is no getting away from how expensive it is right now. Nicola Willis met with Fonterra's chief executive Miles Hurrell at Parliament on Tuesday evening. While the two meet regularly, there was increased interest in the meeting due to the current price of butter. Willis had earlier said it was something she would discuss with Hurrell. Finance Minister Nicola Willis says the price of butter will be discussed at her meeting with the giant co-op. (Source: 1News) Characterising the meeting as "constructive and engaging," Willis said Hurrell was candid about the way butter was priced in New Zealand. ADVERTISEMENT Her summary of her meeting with Fonterra largely zeroed in on her drive to increase supermarket competition. The large proportion of what people pay for butter is dictated by global demand, which is something the government could not control. "Were that price to come down, you would expect that to be reflected in the prices that New Zealand shoppers pay," Willis said. Hurrell had told her that butter had once been the hardest product for Fonterra to sell globally, but the increasing demand was due to reporting on its health benefits. "It was once viewed as a bogeyman," she said. The meeting had reinforced Willis' interest in increasing supermarket competition to put downward pressure on the price of butter. "All roads lead back to supermarket competition. I continue to believe that is the most powerful lever that the government has on this issue. We will never be able to control global dairy prices. What we can influence is the amount of competition in New Zealand's grocery sector and we have a lot of work underway to address that." ADVERTISEMENT Fonterra had also observed the supermarket competition. Finance Minister Nicola Willis does not believe New Zealanders are getting a "raw deal" on butter. (Source: "Miles specifically conveyed that Fonterra operates in a number of markets around the world, most of which have a more competitive supermarket sector, and that it does feel different in New Zealand." She would leave it to supermarkets and Fonterra to argue who was charging what margin. "The sense that I got from my engagement with Miles is that it's a constant battle between them. Each party are probably going to point fingers at the other." Hurrell would not answer questions when RNZ approached him outside Parliament on Tuesday night, but a Fonterra spokesperson said the meeting was "constructive". Willis said she had encouraged Hurrell to front, in particular to explain what proportion of the margins go to Fonterra and what goes to supermarkets. ADVERTISEMENT Acknowledging that Fonterra's job was to get the best possible price for its shareholders, Willis also accepted New Zealanders saw the downsides of that when they were shopping. "I've been satisfied that I don't think consumers are getting a raw deal. I think that there is good work going on to ensure that there is pressure and competition from Fonterra to try and keep its prices low. But I get it. Butter is expensive right now. There's no getting away from that."
NZ Herald
13 hours ago
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Explainer: Why have New Zealand butter prices gone up – and when will that change?
To paraphrase former US President Bill Clinton: it's the economics, stupid. One big factor behind the rise, according to economists, is that New Zealand exports wholesale butter products and the price for this has soared internationally. As Infometrics economist and chief forecaster Gareth Kiernan explained, a 74% rise in international butter prices at Fonterra's Global Dairy Trade auctions between August 2023 and May this year has 'directly flowed through into retail prices within New Zealand'. What's behind that jump? Kiernan explains it 'reflects a mixture of demand and supply factors, including lower dairy production volumes in the US, Europe, South America, and China' as well as 'a sharp drop in Australian [dairy] production between 2021 and 2023 that has not been fully recovered from; and strong demand growth in Asia'. 'Weather events, including both drought and periods of excessive rainfall, have been a contributing factor to many of the supply issues overseas. However, tougher environmental regulations, higher energy prices, and a bluetongue virus outbreak in late 2024 have also negatively affected European dairy production,' Kiernan added. So a reduction in global supply, together with stronger demand, has pumped up the prices. Michael Harvey, senior analyst in dairy and consumer foods for Rabobank, makes similar points and highlights the rise in the cost of dairy products that New Zealand exports. 'It's across all channels,' he told the Herald. 'And it ultimately comes down to global prices'. The reality is that New Zealand exports 98% of the dairy products it produces, Harvey says, and the country has a very large and very successful dairy industry. Because we export so much, our local prices are heavily affected by the demand in those export markets. In a sense, we are paying the price of our own success. New Zealand exports the overwhelmingly majority of the dairy it produces. Photo / NZME This morning, David Seymour told Herald NOW's Ryan Bridge that high butter prices are actually really good news for the economy, and we should all be happy about the money flowing into farmers' pockets. Is David Seymour right? Yes, Kiernan says. 'They are undoubtedly painful for consumers, but they mean that dairy farmers' incomes are increasing, which will help drive New Zealand's economic recovery over the next 18 months,' he adds. 'Low dairy prices (along with high costs) during 2022 and 2023 led to a pull-back in farm spending, hurting economic activity in provincial areas. Improving incomes will see more spending on farm supplies, equipment, and machinery, boosting economic activity and jobs in provincial areas.' Kiernan goes further and says that rising dairy prices are more important to the country's economic recovery than lower interest rates: 'In our view, the lift in dairy prices, along with rising meat prices and high horticulture prices, is shaping as an even more important component of the economy's recovery than declining interest rates'. Consumer NZ, however, said Seymour 'missed the point' with his statement. Deputy Prime Minister of New Zealand David Seymour says high butter prices are good news for the country's economy. Photo / Michael Craig 'Our research this month has found that 70% of New Zealanders rank the cost of food and groceries as a top three financial concern. 'Most New Zealanders don't believe the Government is doing enough to keep food affordable – two-thirds of people said they have low confidence in current government policies.' 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The not-so-good news: The latest OECD/FAO forecasts show only an 8% correction in prices between 2024 and 2026, which means there is no immediate relief on the horizon, as this will still leave butter prices higher than people were used to a few years ago. The reason behind this, Kiernan says, is 'further growth in demand from India, Pakistan, the Middle East, and North Africa, which is expected to remain reasonably strong'. So the bad news for bakers, cakers and scone-makers: not only are butter prices not about to drop any time soon, they may actually go even higher. 'The full effects of international butter price rises through to May have probably not quite flowed through into retail butter prices in NZ yet, so there is still a near-term risk that retail prices could push a bit higher,' Infometrics' chief forecaster says. 'Because we have yet to see any dip in international prices, it's too early to be certain about the timing of any reversal in retail prices, so it might not be until late 2025 or early 2026 that supermarket butter prices start to ease a little from current highs.' Rabobank's Harvey agrees: 'We are not expecting the global price to rapidly decline in the next six to 12 months, but there'll be some pressure. Relief is on the horizon, but there won't be a dramatic decline'. If you look at the Global Dairy Trade (GDT) as a global indicator of prices, these have fallen marginally in recent months, but are still very high, Harvey explains. 'It becomes a question of when we will see some correction,' he adds. How that correction will happen also depends on several factors. 'It could be that customers just stop buying, because the price is too high, or a supplier response from manufacturers. You'll get a balance of that,' Harvey says. 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Now this is at the margin, it is a small proportion of the overall price that you pay, between 5% and 10% of the overall price shared between Fonterra and the retailer. 'What is clear is that different retailers make different decisions about what margins they charge,' Willis said. Speaking to the Herald before the meeting, Harvey said there's 'not much the Government can do' in the short term as the Beehive is largely unable to influence global pricing. There are some players along the supply chain who can have an impact, though. 'Retailers will look to trade down where they can. They are very mindful of this,' Harvey says, adding that we should expect to see more 'promotional activity' that customers can take advantage of. In summary Butter is expensive right now, but it's probably going to get worse before it gets better – and there isn't much anyone can do about it. That's good if you sell butter (or the raw ingredients used in production). For those who buy it as part of their weekly shop, it's something that's a lot harder to swallow.
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'Butter Is Expensive Right Now. There's No Getting Away From That' - Finance Minister Nicola Willis
The Finance Minister does not believe New Zealanders are getting a "raw deal" on butter, but has accepted there is no getting away from how expensive it is right now. Nicola Willis met with Fonterra's chief executive Miles Hurrell at Parliament on Tuesday evening. While the two meet regularly, there was increased interest in the meeting due to the current price of butter. Willis had earlier said it was something she would discuss with Hurrell. Characterising the meeting as "constructive and engaging," Willis said Hurrell was candid about the way butter was priced in New Zealand. Her summarisation of her meeting with Fonterra largely zeroed in on her drive to increase supermarket competition. The large proportion of what people pay for butter is dictated by global demand, which is something the government could not control. "Were that price to come down, you would expect that to be reflected in the prices that New Zealand shoppers pay," Willis said. Hurrell had told her that butter had once been the hardest product for Fonterra to sell globally, but the increasing demand was due to reporting on its health benefits. "It was once viewed as a bogeyman," she said. The meeting had reinforced Willis' interest in increasing supermarket competition to put downward pressure on the price of butter. "All roads lead back to supermarket competition. I continue to believe that is the most powerful lever that the government has on this issue. We will never be able to control global dairy prices. What we can influence is the amount of competition in New Zealand's grocery sector and we have a lot of work underway to address that." Fonterra had also observed the supermarket competition. "Miles specifically conveyed that Fonterra operates in a number of markets around the world, most of which have a more competitive supermarket sector, and that it does feel different in New Zealand." She would leave it to supermarkets and Fonterra to argue who was charging what margin. "The sense that I got from my engagement with Miles is that it's a constant battle between them. Each party are probably going to point fingers at the other." Hurrell would not answer questions when RNZ approached him outside Parliament on Tuesday night, but a Fonterra spokesperson said the meeting was "constructive". Willis said she had encouraged Hurrell to front, in particular to explain what proportion of the margins go to Fonterra and what goes to supermarkets. Acknowledging that Fonterra's job was to get the best possible price for its shareholders, Willis also accepted New Zealanders saw the downsides of that when they were shopping. "I've been satisfied that I don't think consumers are getting a raw deal. I think that there is good work going on to ensure that there is pressure and competition from Fonterra to try and keep its prices low. But I get it. Butter is expensive right now. There's no getting away from that."
