Source: New Zealand Government
Minister for Regulation David Seymour says early analysis shows huge economic benefits from cutting red tape, many times larger than the cost to the taxpayer of doing it.
“Cutting red tape is already delivering real value for New Zealanders, and pointing to great potential for more” Mr Seymour says.
“Peer reviewed analysis estimates that work by the Ministry for Regulation in its first 18 months will deliver a net public benefit of $223 million to $337 million. The return on investment is large, from expenditure of around $20 million.
“The return is $11–$17 in benefit for every dollar spent on the Ministry. It shows what I have been saying for years, we are overregulated, and the proof is shown in the benefits of cutting red tape.
“Removing the effective ban on medical conferences is one example. The ban on advertising new medicines sent major conferences to Australia or Fiji. The Ministry for Regulation reviewed the rule after a tip from the red tape tipline. It found comparable countries don’t have these bans because they don’t make sense, and fixed it. Two of Australasia’s largest medical conferences are already booked here for 2026. Total benefits are estimated between $6 million and as high as $35 million a decade if more conferences come here.
“Another example is the Hairdressing and Barbering Sector Review that revoked all sector-specific regulations. They were either unnecessary, already managed by other rules, or applied inconsistently between local authorities. This Sector Review means an estimated $6.5 million in benefits for hairdressers and barbers. We are doing four Sector Reviews a year, and the savings will keep coming for Kiwi businesses.
“Every unnecessary regulation is a barrier to growth. This Government is committed to fixing this by clearing the path of needless regulations and improving how laws are made.
“These estimates are early and conservative. They are based on the work the Ministry has completed in its first 18 months. It shows a relatively small investment in getting regulation right pays off many times over. As the Ministry continues to evaluate more sectors of the economy, the payoff will increase.
“The benefits arise from practical, common-sense changes like allowing major medical conferences to take place here and improving settings to support the hemp industry, through to larger system-wide reviews of sectors like agricultural and horticultural products and early childhood education. Using standard cost-benefit methods and appropriate discount rates, officials assessed the net public benefit of the changes in present value over a 10-year period.
“Indicative estimates suggest potential net public benefits from reforms in areas such as early childhood education (ECE), agricultural and horticultural approvals (AgHort), telecommunications, and industrial hemp totalling around $204–$275 million over 10 years.
To avoid overstating the gains, officials deliberately used conservative assumptions, excluded benefits that could not be credibly monetised, and worked within data constraints for older proposals. The work has been peer reviewed by Motu.
“To grow its way out of deficit and give future generations better opportunities, Government can’t just shuffle taxes and borrow more. Government policy must make it easier to produce, invest, and employ. Better regulation lifts productivity by letting people spend less time on paperwork and more time creating value,” says Mr Seymour.
“With the Regulatory Standards Act now in place, my focus is to build on this work so that every rule made by Government is genuinely in the public interest.”
