Ministry for Regulation – building up from establishment phase with a big job to do

The Ministry for Regulation was established on 1 March 2024. The Ministry, one of five central government agencies, is a small agency with a big job to do.

The Ministry has four key functions: 

• help ensure the quality of new regulation
• improve the functioning of existing regulatory systems
• raise the capability of those who design and operate regulatory systems
• provide continuous and enduring improvements to the regulatory management system.

Good regulation is important for our economic performance. It impacts on our attractiveness as a place to do business, our economic productivity, and people’s wellbeing.

An NZIER study from 2015 estimated the administrative costs for New Zealand businesses to comply with tax and regulatory requirements at $5 billion. Of this, over half is related to non-tax regulation, which was estimated as being around 1.3% of GDP.

International comparisons from the OECD suggest that the relative effectiveness of New Zealand’s regulation has declined over recent years. For instance, in terms of product market regulation we have slipped from second place in 1998 to 20th place in 2023. 

We also know that businesses regularly report that regulation is a barrier to innovation. 

If New Zealand is to continue to be a great place to live and do business, then we need to make sure that our regulations are achieving what they are intended to and doing so, at the least cost.

As at Friday 16 August 2024, there was a total of 63 people working for the Ministry. This total includes people seconded from other agencies, staff on permanent and fixed term employment agreements, and a small number of people engaged as contractors.  

Information provided for a written parliamentary question dated 3 July 2024 outlined that the mean (average) salary of people employed (either on fixed-term or permanent employment agreements) by the Ministry was $154,500.

The Ministry has also provided a range of additional information about staffing, salary details, recruitment and hiring practices in response to other information requests.

The Ministry is almost six months old (on 1 September 2024) and is still in establishment phase. The Ministry is currently staffed by people who are permanent employees, people who are on fixed term agreements (for specific time periods), people who are seconded from other government agencies, and a small number of people who are engaged as contractors. 

The Ministry’s approach to employing or engaging any resource is one of fiscal prudence, alongside the need to ensure the new Ministry has the right amount of specialist support and technical expertise required in establishment phase. 

The Ministry for Regulation has confirmed its final structure will consist of 91 permanent full-time staff. 

The Ministry is currently recruiting to its permanent structure. It is anticipated those roles will be filled over the next six months, which will see many of the fixed term, and contractor resources decrease significantly. 

Each role that is advertised will be assigned a band (a remuneration range), that has been sized or tested against similar roles in the market, including both the public and private sector. When appointing a new employee, their starting salary is selected based on a range of factors including skills and experience. Generally, people are appointed at mid-range of the assigned band. 

As at Friday 16 August 2024, the percentage of people who were on fixed term employment agreements was greater than those on permanent employment agreements. Fixed term agreements generally attract a slightly higher salary than permanent agreements as they provide less certainty to the employee, and often target specialist skills for project-based work. 

Every permanent employee at the Ministry for Regulation has (or will have) a position description, which outlines the tasks the role is expected to perform, and the outcomes expected. This guides how employees’ performance is monitored and measured. 

The Productivity Commission was disestablished on 29 February 2024. The Productivity Commission was a small independent Crown Entity which undertook in-depth reviews on issues referred to the organisation by Ministers. 

The Ministry for Regulation has not replaced the Productivity Commission, although both share a similar interest in evidence-based economic analysis and improving New Zealand’s economic productivity.  

The Ministry is continuing a busy work programme, including completing two regulatory reviews, progressing a regulatory standards bill, engaging with a range of stakeholders to understand their regulatory environment and identify where barriers exist, and we are continuing to work with regulatory agencies to help them enhance their regulatory capability.