The Regulatory Standards Act 2025 (“Act”) sets standards of legislative quality and provides for assessment against those standards. Most of the Act comes into force at a date set by the Governor-General, but no later than 1 July 2026.
This Act has been the subject of much controversy. Despite critics claiming it would restrict Parliament’s power to legislate, the Act is not this dramatic in effect. Its procedures are intended to promote voluntary compliance with standards of good law-making, rather than imposing those standards by force.
Because of this, Act is likely to be a particularly useful tool for advocacy organisations and others seeking to promote law reform.
What the Act does
Scope
The Act mainly achieves its purpose are through the broad principles of responsible regulation set out in s9 of the Act (“Principles”).
The Principles are varied, ranging from markers of good law-making like clarity and cost/benefit analysis, constitutional conventions recognising the importance of judicial review and that legislation should not apply retrospectively, and more political principles like protection of individual liberty and providing compensation for property impaired by legislation. The Principles are likely to be fleshed out in guidance issued jointly by the Minister for Regulation and the Attorney-General under s 26 of the Act.
The Principles apply to most legislation and regulation. There are limited exceptions, including Treaty settlements, budget legislation, and rules of court (among others).
Benchmarking new legislation
Government legislation and amendments introduced to Parliament after commencement of the Act will require assessment against the Principles. The same applies to all regulation made after that date, unless certain limited exceptions apply. Member’s bills, local bills, and private bills are excluded. The new process requires a “consistency accountability statement” that sets out consistency of the proposed legislation or regulation with the Principles. If inconsistency is found, the responsible person(usually a Minister) must provide a statement with the reasons why.
Failure to comply with the Principles does not mean that legislation cannot progress. But the benchmarking requirements ensure that there is political accountability for failure to comply with the Principles.
Reviewing existing legislation
Existing legislation can also be assessed against the Principles. This can happen in three ways.
Inquiries by the Regulatory Standards Board
The Regulatory Standards Board (“Board”) is tasked with inquiring into and reporting on existing primary legislation for consistency with the Principles. It can also look at existing regulation in limited circumstances.
The public can trigger an inquiry by making a complaint, although the Board does not have to launch an inquiry in response to every complaint. Inquiries must be determined without a hearing.
Upon completion, the Board must report its findings to the Minister for Regulation, and to the government agency and Minister responsible for the legislation. The report is also made public.
Departmental reviews
Government can initiate reviews for legislation they administer.
If a review is undertaken, the agency reports on consistency with the Principles. For legislation, the responsible Minister must present the assessment and explanation to Parliament, and what (if anything) the government plans to do about it. For regulation, the agency must publish the report, along with any future action proposed to address inconsistency. There is no legal requirement for the relevant person to act on any proposed actions to address inconsistencies identified during a review.
Regulatory system reviews
The Minister for Regulation can initiate a review of any regulatory system. While “regulatory system” is undefined, such reviews are likely to have a broader ambit than departmental reviews of legislation.
The Ministry for Regulation has powers to require information from various public bodies and officials to carryout these reviews.
What the Act does not do
Contrary to some commentary on the Bill, the Principles do not affect the validity of non-compliant laws. They do not constrain Parliament’s powers or those acting under delegation from Parliament, from passing legislation.
The legal rights and obligations of individuals are not affected by the Principles.
The Act does not provide a mechanism for complaints about the impact of legislation (or decisions under legislation) on individual interests. The Board is expressly prohibited from considering individual outcomes or impacts when undertaking its inquiry functions.
The advocacy opportunity
The Act can generate and maintain momentum for law reform.
The Act provides two essential tools for this:
1. Inconsistency reports and explanations, and
2. The Board inquiry procedure.
While the regime is new and untested, there are some law reform projects that will clearly benefit from these tools.
Poorly drafted legislation
The Board complaints procedure provides a strong mechanism to draw attention to poor or uncertain drafting. Relevant principles include that legislation should be clear and accessible, and the cost/benefit principle. The Board is expressly empowered to consider how legislation has applied in practice when inquiring under cost/benefit Principle.
Fees and levies
Fees and levies are set on a cost-recovery basis, and payers are selected on either a ‘beneficiary pays’ or ‘polluter pays’ basis.
Complaints under these Principles offer a strong basis for influencing fee and levy settings.
Licensing
Licensing includes professional regulation applied to lawyers, accountants, engineers and others, as well as controlled activities like driving and dealing with hazardous substances.
The Board complaint procedure cannot be used to challenge individual licensing decisions but the Principles in ss 9(a)(v) and 9(h) can be used to draw attention to legislation that grants discretion to officials that is open to abuse, or broader than necessary to achieve the legislative purpose.
De-regulation
The Principles recognise that legislation may not be the best option and other options such as taking no action, reliance on the private sector, or voluntary compliance regimes should be given genuine consideration.
Unlike existing Regulatory Impact Statements (that go to Cabinet), consistency assessments can ‘brand’ a Bill, requiring the Government to publicly justify their preferred option.
For further information on this or similar issues please contact Director, Brigitte Morten
