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Scoop
6 hours ago
- Scoop
Ministry Feared Costs Of $60m A Year To Review Laws Under Regulatory Standards Bill
Officials have warned David Seymour's Regulatory Standards Bill could be much more expensive than previous estimates suggested, and could lead to business uncertainty, slowing economic growth. Seymour is playing down the concerns, saying AI will solve some of those problems and the officials have not accounted for some aspects of the bill he expects will speed up government processes. The documents released under the Official Information Act show Ministry of Business, Innovation and Employment (MBIE) officials feared $50 million to $60m a year in costs to government departments would be on the low end of estimates. They also believed the bill would slow the passage of legislation by two to four weeks, and make the business environment more uncertain, slowing economic growth. Like other departments and in line with the Regulatory Impact Statement prepared by the Ministry for Regulation, MBIE also expressed "concerns about the proposals outlined and their ability to support genuine improvement in regulatory quality", and said there were other, better options for achieving the bill's aims. MBIE estimates of costs to review legislation In feedback ahead of last week's select committee hearings, MBIE officials particularly expressed concern over the additional costs the bill would impose, saying up to three full-time staff would be needed for each of the 95 laws the ministry is responsible for, costing the ministry up to $34.2m over multiple years. "This translates to 95 - 285 FTE in total ($11.4 to $34.2 million). The range in estimates reflects the differences in size and complexity between different pieces of legislation - larger Acts such as the Building Act 2004 would take significantly more resources to review than smaller legislation." As an example, the Building Act includes 680 sections and has 34 pieces of secondary legislation. "It is very roughly estimated that a dedicated team of 6-8 FTE (full time employees) with a manager may be required in order to undertake the consistency reviews and provide advice to the Minister on whether departures are justified." This figure does not include new legislation and regulations, which are covered by the RSB. MBIE estimated an additional full-time employee would be needed for each new bill the government asks the ministry to write, with the requirements of the Regulatory Standards Bill adding "an additional 2-4 weeks into the legislative process". "As an indication, MBIE has supported the passage of 6 Acts so far in 2024/25," the advice stated. "It is highly unlikely that we could meet these additional costs within baseline as suggested within the Cabinet paper without significant impacts on MBIE's ability to deliver Ministers' policy priorities." The figures also do not include the estimated 450 to 550 pieces of existing secondary legislation (regulations) the ministry also oversees - which had originally been included in the RSB's scope and could still be added at a later date. Questioned about the figures, MBIE said they were high-level estimates and could yet change. "The advice provided high level estimates with a range of costs and timeframes based on the work that might be required as a result of the Bill. We would need to revise and update these estimates when the Bill is passed." Estimated $50m to $60m annual cost to departments a 'lower bound' MBIE's advice also quoted from the Regulatory Impact Statement prepared by Seymour's Regulations Ministry an estimated annual cost to departments of "$50m-$60m per year", saying this was likely on the lower end. "As per previous MBIE advice, MBIE considers that the assumptions made by the Ministry for Regulation in developing that estimate make it a lower bound. In regulatory-heavy portfolios, MBIE estimates that up to 15 percent of the policy resource will need to be engaged in this work." The documents show MBIE offered to help the Regulations Ministry come up with a more accurate accounting. "We offered to work with the Ministry to better cost the work that would be involved in undertaking consistency reviews. In the 48 hour timeframe for comment, it was not possible to complete robust analysis on agency impact but our assessment is this [is] substantial for agencies with a significant volume of regulatory stock such as MBIE". However, the publicly available Regulatory Impact Statement predicted the bill would cost $18m annually across the whole of government. RNZ has sought clarification from MBIE about where the $50m to $60m figure came from, and whether it was still current. Seymour expects AI will bring department costs down Questioned about the costs, Seymour said the officials did not seem to be accounting for the fact the range of considerations in the RSB were narrower than already required under the Cabinet Manual, nor that it would replace most of the work done to produce Regulatory Impact Statements. "It's disappointing that MBIE officials think it's too hard to consider the impacts of their regulations on Kiwis," he said. "It says more about their productivity and attitude towards Kiwis than the Bill. Businesses who have to comply with their rules and regulations are constantly innovating and improving their processes, why can't these officials? "This isn't a zero-sum game. Kiwis all over the country are faced with endless costs caused by overzealous bureaucrats who aren't accountable. By preventing more bad regulations, and getting rid of pointless old ones, we'll save the country far more money than these bureaucrats could ever spend." He suggested AI could also help. "Look at the pace of development of AI, the cost estimates were based on a human reading through every piece of legislation, I suspect that actually we'll be able to do it much faster than we expected because of AI," he said. "Could it change the way that a government department scans the legislation it's responsible for to pick out things that might be consistent or inconsistent with a peer to principles? That's already here." He pushed back when asked if AI could be trusted to do that work. "I don't think the issue is that you're going to trust it. I think the issue is that you're going to use it to speed up the work that humans are ultimately trusted for." Victoria University senior lecturer in Artificial Intelligence Andrew Lensen warned artificial intelligence is not the silver bullet David Seymour has suggested it will be for reducing the cost of the Regulatory Standards Bill. "There are some benefits we've seen in the public sector with the use of AI to help public servants do some stuff, but I think what the minister is proposing is very optimistic and not at all what I'd suggest as a reasonable solution," Lensen told Midday Report. He said human oversight would be needed if AI was used to make sure there were no mistakes or inaccuracies. "If you need someone to baby-sit a model, or baby-sit that system, then it's sort of limited how much efficiency you can gain from that process," Lensen said. He added the return investment in AI is not clear because there is a big risk of legal costs if AI makes a mistake. Concerns over opposition to RSB affecting business confidence The advice shows MBIE was also concerned about the effect of the RSB on business confidence, because the principles in it were likely to change under a future government. "Because some of the principles in the Bill are viewed as novel or contentious, as opposed to widely accepted, there is a risk to the durability of the principles, and potentially the Bill as a whole. "Future legislation, designed to be consistent with novel principles, may also take on characteristics that are seen as unorthodox, and eventually be subject to regulatory churn." Emails between officials show the ministry raised with Immigration Minister Erica Stanford that the bill would make the regulatory environment less predictable, "which can constrain business' commitment to investment and growth". RNZ has sought comment from Seymour about the effect on business confidence. Cost estimates 'highly concerning' - Greens The Green Party's regulations spokesperson Francisco Hernandez said the ministry's cost estimates were highly concerning, saying officials would be focused on "doing make-work jobs just to comply with the extremist provisions of the Regulatory Standards Bill". He was also concerned the bill would have a chilling effect on regulations "that protect people and planet". "Instead of the money going to frontline public services, it's just going to be wasted on the cost of basically pursuing one person's ideological vanity project." He said Seymour's explanations sounded like "total BS", saying it was "desperation". He pointed to a study from the United Kingdom which suggested AI could save public servants two weeks in a 52-week year, less than 5 percent. "AI is quite good for doing the sort of low-level administrative tasks and simplifying those things, but the level of nuanced work of interpreting secondary legislation and how it applies to a principles framework that, again, is like created by human beings - it's not really the sort of thing that could easily be automated," Hernandez said. "Seymour is spinning." He said he agreed with the analysis on the bill impacting business confidence, and pushed back on suggestions the current opposition repealing the bill could be partly to blame for it - saying it was not just the opposition showing signs of not supporting it. "The coalition itself is showing cracks around the seams around that, so if Seymour can't even get the full unequivocal support of his colleagues in cabinet, then that goes to show how extreme this bill is." Cabinet removed requirement to review every 10 years after every ministry complained The documents also showed significant concern from MBIE about an earlier version of the RSB the ministries were asked to provide feedback on, which would have required all legislation and regulations to be reviewed at least once every decade. This requirement was removed by Cabinet before the bill was introduced to Parliament. An email in the documents showed concerns about the 10-yearly reviews was widespread. "David will address the resourcing issue in the meeting, as it has been raised by every agency and several ministers," the email said. Questioned about the prospect of changes to the bill following the select committee process, Seymour used the matter as an example of changes already made. "People said 'oh, that'll be too much work for the department', we said 'well, if it's too much work for the government to read all of its laws in 10 years, imagine the poor buggers who have to follow these laws out there anyway'. We said 'okay, we'll take the 10 year thing out, take pressure off that'. That's the kind of change they've already made."
Scoop
11 hours ago
- Scoop
On The Costs Of Regulating Cost, And Burkina Faso As A Role Model
Article – Gordon Campbell Funny how blow-out gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Funny how 'blow-out' gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Case in point : the original cost estimates for the Regulatory Standards Bill came to $18 million a year – but this week, MBIE calculations released under the Official Information Act indicate that the annual cost could be $50-60 million, or roughly three times the original figure. Sounds like a cost blow-out to me. The sort of incompetence the Bill was created to prevent. MBIE has also calculated that between 95 and 285 full time equivalent staff would be needed to carry out the legislative vetting work envisaged. And already we know that staff at Seymour's Regulations Ministry get paid considerably more than other public servants, on average. In response, Seymour has queried the figures, and suggested that AI would help to reduce those costs. (Hmm. What could possibly go wrong if we asked Chat GTP to rewrite the Resource Management Act in the style of Ayn Rand?) At best, AI might conceivably cut the time spent on several basic administrative tasks, but that would hardly bridge the gap between $18 million and $50-60 million. As the Greens regulation spokesperson Francisco Hernandez told RNZ, one UK study showed that AI would reduce public service labour costs by only about 5%. With the Bill, Hernandez says, money is being diverted from frontline public services into'one person's ideological vanity project': 'But the level of nuanced work of interpreting secondary legislation and how it applies to a principles framework…its not the sort of thing that could easily be automated.' Nor will the Regulatory Standards Bill do much to restore business confidence, which MBIE expects will be negatively affected by the introduction of an extensive vetting process and related compliance worries that are unlikely to survive a change of government. Offal in, offal out This week, the news has been almost as bad about another ACT Party fiasco – the school lunches programme. In recent weeks, a venerable political gambit has been used to repair the programme as a success. First, government enacts a terrible idea, and lots of people complain. No matter how many of them complain – or how loudly – the government totallky ignores them and, over time, people just give up. The government then declares the decline in the number of complaints to be a sign of success! That's exactly what has happened with school lunches. People have been forced to accept a shoddier product as the new norm. This week though, Business Desk revealed just how shoddy that product has become. Reportedly, an offal mince blend is now being used in school lunches instead of pure beef mince, in order to cut costs. The School Lunch Collective has started using a cheaper offal mince blend, a move that has raised compliance questions. The supplier, headed by the Compass Group, quietly updated its website to disclose the use of 'beef trim/heart' only after BusinessDesk and regulators made inquiries late last week. Business Desk understands the value blend, which is 50% beef trim and 50% beef heart, is about 25% cheaper than pure beef mince. Feeding offal to children to make a buck….Truly, anyone who voted for the ACT Party at the last election should now be hanging their head in shame. Out of Africa Unless a natural disaster, coup or rugby team is involved, Africa rarely makes it onto our news bulletins. Even back when it was called Upper Volta, Burkina Faso barely rated a mention. Yet weirdly, Burkina Faso's young leader Ibrahim Traore recently became a point of contention between the leaders of two of our major political parties. Traore was praised by Te Pāti Māori leader Rawiri Waititi, and damned by ACT Party leader David Seymour with equal fervour. As is usually the case with any country not in the Anglophile sphere of interest, local media coverage didn't go much beyond the initial 'he said/he said' exchange. That's a pity, given that in the non-Anglo media, Traore is arguably the most popular political figure on the African continent right now. To Waititi, Traore is a 'hero' – the view that Seymour has described as 'insane.' Insane? This seemed rich coming from someone who – as recently as 2023 – was still expressing his admiration for Margaret Thatcher. Why does Waititi rate Traore so highly? After seizing power in a coup in 2022, Traore's regime cut ties with France, its former colonial ruler, and set up a state-owned mining company. He also required foreign mining firms to (a) give the citizens of Burkina Faso a 15% stake in their local operations and (b) transfer skills to the local people. To further ensure that Burkina Faso receives a fairer share of the benefits from its mineral wealth, Traore is also said to be building a gold refinery and establishing national gold reserves for the first time in the nation's history. The leaders of Mali and Niger are doing much the same. As the UK Financial Times has reported: Their more interventionist stance….stems from a desire to assert national sovereignty after decades under the thumb of western miners and subject to contracts the new rulers view as tilted in favour of the companies. They have been rewriting mining laws, demanding higher tax payments and larger ownership stakes in the industry, but have also resorted to restricting operations, issuing arrest warrants and detaining employees. The effects of France's grim colonial record of exploitation and oppression are still evident. Just before Traore's coup, the literacy rate for those aged 15+ was below 35%, which is almost half the average level of literacy found across the Sahel, the region located between the Sahara desert and the savannahs of Central Africa. Burkina Faso and two other Sahel countries (Mali, Niger) have cut ties with Western colonial powers and forged defence links with Russia, and its Wagner Group of mercenaries. Unfortunately though…right across the Sahel region, the banking system remains in France's colonial grip. How come this is still possible? As the US Foreign Policy magazine recently conceded in an article otherwise hostile to Traore: …[There] is a growing frustration with France's continued economic role in Africa, a result of the enduring Central and West African franc currency systems that continue to exist in twelve former French colonies in the region. This currency regime, which during de-colonization aimed to provide a smooth landing for African economies by pegging their currencies to the stability of the French franc, has endured through the transition to the euro until today. Yet, perhaps the most humiliating aspect of this system is that 50 percent of each member state's foreign assets are held in Paris, plus an additional 20 percent for 'sight liabilities.' All up, one can readily see why Traore's fightback against Western economic dominance and minerals extraction has struck a sympathetic chord with Waititi. Despite the authoritarian nature of the Burkina Faso regime, some of its brutal suppression of dissent has been a survival tactic in the face of the advances by jihadi military forces. For that reason alone, Traore's survival is in the West's self-interest. The jihadis appear to be winning, across much of the Sahel region. To combat them, the Sahel governments that have kicked out France and the United States have not only turned to the Wagner Group for military assistance, but have offered mining rights to Moscow in compensation. Russian assistance has also boosted Traore's sophisticated social media presence. As a result, deepfake AI videos of Beyonce, Justin Bieber and R Kelly have appeared online in which they appear to wish God's blessing on Ibrahim Traore for a long life, and for many more years of enlightened rule. In reality, Traore's rule barely extends beyond the country's two main cities, with jihadi militia controlling much of the countryside. Elections have to be deferred, Traore claims, until these Salafi fundamentalist forces are defeated – otherwise, people would be killed by the rebels for daring to cast a ballot. Given the extent of the jihadi threat, Burkina Faso is now rated by some as being the world's number one centre of Salafi terrorism. Footnote: Unfortunately, politics readily lends itself to this lionising vs demonising process, focussed on individual heroes and villains. The Congolese politician Laurent Kabila once called this process 'dancing in the glory of the monster.' Meaning : it's not about the man, it should be about the system. We need to better understand why the political system rewards the sort of leaders we get. Anthem for a nation The Ivory Coast has always had a strong influence on the music of Burkina Faso. Born in Ivory Coast, the artist now known as Floby has been a fixture on the Burkinabe music scene for over 15 years. From last year, here's a single in which he celebrates his country, and its people:
Scoop
12 hours ago
- Scoop
On The Costs Of Regulating Cost, And Burkina Faso As A Role Model
Funny how 'blow-out' gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Case in point : the original cost estimates for the Regulatory Standards Bill came to $18 million a year – but this week, MBIE calculations released under the Official Information Act indicate that the annual cost could be $50-60 million, or roughly three times the original figure. Sounds like a cost blow-out to me. The sort of incompetence the Bill was created to prevent. MBIE has also calculated that between 95 and 285 full time equivalent staff would be needed to carry out the legislative vetting work envisaged. And already we know that staff at Seymour's Regulations Ministry get paid considerably more than other public servants, on average. In response, Seymour has queried the figures, and suggested that AI would help to reduce those costs. (Hmm. What could possibly go wrong if we asked Chat GTP to rewrite the Resource Management Act in the style of Ayn Rand?) At best, AI might conceivably cut the time spent on several basic administrative tasks, but that would hardly bridge the gap between $18 million and $50-60 million. As the Greens regulation spokesperson Francisco Hernandez told RNZ, one UK study showed that AI would reduce public service labour costs by only about 5%. With the Bill, Hernandez says, money is being diverted from frontline public services into'one person's ideological vanity project': 'But the level of nuanced work of interpreting secondary legislation and how it applies to a principles not the sort of thing that could easily be automated.' Nor will the Regulatory Standards Bill do much to restore business confidence, which MBIE expects will be negatively affected by the introduction of an extensive vetting process and related compliance worries that are unlikely to survive a change of government. Offal in, offal out This week, the news has been almost as bad about another ACT Party fiasco – the school lunches programme. In recent weeks, a venerable political gambit has been used to repair the programme as a success. First, government enacts a terrible idea, and lots of people complain. No matter how many of them complain – or how loudly - the government totallky ignores them and, over time, people just give up. The government then declares the decline in the number of complaints to be a sign of success! That's exactly what has happened with school lunches. People have been forced to accept a shoddier product as the new norm. This week though, Business Desk revealed just how shoddy that product has become. Reportedly, an offal mince blend is now being used in school lunches instead of pure beef mince, in order to cut costs. The School Lunch Collective has started using a cheaper offal mince blend, a move that has raised compliance questions. The supplier, headed by the Compass Group, quietly updated its website to disclose the use of 'beef trim/heart' only after BusinessDesk and regulators made inquiries late last week. Business Desk understands the value blend, which is 50% beef trim and 50% beef heart, is about 25% cheaper than pure beef mince. Feeding offal to children to make a anyone who voted for the ACT Party at the last election should now be hanging their head in shame. Out of Africa Unless a natural disaster, coup or rugby team is involved, Africa rarely makes it onto our news bulletins. Even back when it was called Upper Volta, Burkina Faso barely rated a mention. Yet weirdly, Burkina Faso's young leader Ibrahim Traore recently became a point of contention between the leaders of two of our major political parties. Traore was praised by Te Pāti Māori leader Rawiri Waititi, and damned by ACT Party leader David Seymour with equal fervour. As is usually the case with any country not in the Anglophile sphere of interest, local media coverage didn't go much beyond the initial 'he said/he said' exchange. That's a pity, given that in the non-Anglo media, Traore is arguably the most popular political figure on the African continent right now. To Waititi, Traore is a 'hero' - the view that Seymour has described as 'insane.' Insane? This seemed rich coming from someone who – as recently as 2023 – was still expressing his admiration for Margaret Thatcher. Why does Waititi rate Traore so highly? After seizing power in a coup in 2022, Traore's regime cut ties with France, its former colonial ruler, and set up a state-owned mining company. He also required foreign mining firms to (a) give the citizens of Burkina Faso a 15% stake in their local operations and (b) transfer skills to the local people. To further ensure that Burkina Faso receives a fairer share of the benefits from its mineral wealth, Traore is also said to be building a gold refinery and establishing national gold reserves for the first time in the nation's history. The leaders of Mali and Niger are doing much the same. As the UK Financial Times has reported: Their more interventionist from a desire to assert national sovereignty after decades under the thumb of western miners and subject to contracts the new rulers view as tilted in favour of the companies. They have been rewriting mining laws, demanding higher tax payments and larger ownership stakes in the industry, but have also resorted to restricting operations, issuing arrest warrants and detaining employees. The effects of France's grim colonial record of exploitation and oppression are still evident. Just before Traore's coup, the literacy rate for those aged 15+ was below 35%, which is almost half the average level of literacy found across the Sahel, the region located between the Sahara desert and the savannahs of Central Africa. Burkina Faso and two other Sahel countries (Mali, Niger) have cut ties with Western colonial powers and forged defence links with Russia, and its Wagner Group of mercenaries. Unfortunately across the Sahel region, the banking system remains in France's colonial grip. How come this is still possible? As the US Foreign Policy magazine recently conceded in an article otherwise hostile to Traore: ...[There] is a growing frustration with France's continued economic role in Africa, a result of the enduring Central and West African franc currency systems that continue to exist in twelve former French colonies in the region. This currency regime, which during de-colonization aimed to provide a smooth landing for African economies by pegging their currencies to the stability of the French franc, has endured through the transition to the euro until today. Yet, perhaps the most humiliating aspect of this system is that 50 percent of each member state's foreign assets are held in Paris, plus an additional 20 percent for 'sight liabilities.' All up, one can readily see why Traore's fightback against Western economic dominance and minerals extraction has struck a sympathetic chord with Waititi. Despite the authoritarian nature of the Burkina Faso regime, some of its brutal suppression of dissent has been a survival tactic in the face of the advances by jihadi military forces. For that reason alone, Traore's survival is in the West's self-interest. The jihadis appear to be winning, across much of the Sahel region. To combat them, the Sahel governments that have kicked out France and the United States have not only turned to the Wagner Group for military assistance, but have offered mining rights to Moscow in compensation. Russian assistance has also boosted Traore's sophisticated social media presence. As a result, deepfake AI videos of Beyonce, Justin Bieber and R Kelly have appeared online in which they appear to wish God's blessing on Ibrahim Traore for a long life, and for many more years of enlightened rule. In reality, Traore's rule barely extends beyond the country's two main cities, with jihadi militia controlling much of the countryside. Elections have to be deferred, Traore claims, until these Salafi fundamentalist forces are defeated - otherwise, people would be killed by the rebels for daring to cast a ballot. Given the extent of the jihadi threat, Burkina Faso is now rated by some as being the world's number one centre of Salafi terrorism. Footnote: Unfortunately, politics readily lends itself to this lionising vs demonising process, focussed on individual heroes and villains. The Congolese politician Laurent Kabila once called this process 'dancing in the glory of the monster.' Meaning : it's not about the man, it should be about the system. We need to better understand why the political system rewards the sort of leaders we get. Anthem for a nation The Ivory Coast has always had a strong influence on the music of Burkina Faso. Born in Ivory Coast, the artist now known as Floby has been a fixture on the Burkinabe music scene for over 15 years. From last year, here's a single in which he celebrates his country, and its people:
