Friday, March 25, 2011

Fallow on the Regulatory Standards Bill

Yesterday, the Herald's Brian Fallow took on the topic of Rodney Hide's Regulatory Standards Bill. His view? The bill would be a "lawyer's charter", a standing invitation for vested interests to relitigate every policy provision affecting their profitability:

One of the Regulatory Standards Bill's central principles against which legislation is to be measured, if taken literally, would tend to freeze the existing distribution of wealth.

It says legislation should not "take or impair ... property" unless it is necessary in the public interest, the owner receives full compensation and that compensation is provided, to the extent practicable, by or on behalf of those who benefit from the taking or impairment.

On the face of it this would debar Parliament from doing anything redistributive.

But not just redistribution. Taxation and the social wage aren't the only things which impair the property rights of the rich. Environmental regulation, food and product safety standards, building codes, even the road code (what is the speed limit, except an impairment of your right to enjoy your expensive, fast-moving property?) And while there is a "justified limitations" clause (the meaning of which, contra Fallow, is well-established), that is not going to stop vested interests from trying it on (particularly when the alternative is going out of business). And that, in turn, is likely to deter lawmakers from trying to advance the public interest by regulating such matters.

Fallow thinks its an appalling bill. So does Treasury. And so do I. While the government has committed to supporting this mad idea to select committee, it should not go any further.