CO (26) 2: Expectations for Good Law-making

1 This circular sets out the Government’s expectations for good law-making to ensure responsible regulation.

2 Responsible regulation can help governments to achieve their desired economic, environmental and social outcomes, support the effective operation of markets, and protect communities from harm. However, regulation can also have negative consequences, such as lowering productivity, creating barriers to competition and innovation, placing undue restrictions on individuals’ liberties and their ability to use and exchange their property, and generating large compliance costs for individuals and businesses, sometimes in excess of the benefits.

3 Recognising this, the Government expects good law-making to be supported by consultation and careful analysis to ensure it is responding to a well-defined problem, and the most appropriate option is being taken forward. Regulation should only proceed if its benefits are expected to outweigh its costs; it is the most effective, efficient and proportionate response to the issue concerned; and it is clear how it will be implemented.

4 The Regulatory Standards Act 2025 (the Act) establishes a benchmark for good regulation through a set of principles of responsible regulation based on good law-making and economic efficiency. The Act aims to reduce the amount of unnecessary and poor regulation, by making it transparent where legislation does, or does not, meet the principles of responsible regulation.

5 This circular supports good law-making and the implementation of the Act through setting out expectations and requirements for:

6 This circular provides links to further guidance published by the government and the Ministry for Regulation,  and will be updated with more links as more guidance is published in the near future. The circular replaces earlier Cabinet circulars on impact analysis requirements and disclosure statements.

7 This circular applies:

8 The information in this circular can also act as best practice for wider agencies (i.e Crown entities and local government).

9 Proposals for regulatory change should be supported by consultation and careful analysis to ensure they are responding to a well-defined problem, a range of regulatory and non-regulatory options have been considered, and the most appropriate option is being taken forward. Careful consideration should also be given to the impact of any proposed regulation on individual property rights and personal liberties, and there should be good reasons for proceeding with legislation where it has any such impact. Regulation should only proceed if its benefits are expected to outweigh its costs and it is the most effective, efficient and proportionate response to the issue concerned. Before decisions are taken, implementation issues should be identified and addressed, and decision-makers should have access to analysis demonstrating that implementation is genuinely feasible.

10 This applies to all regulatory proposals, regardless of whether or not they are approved by Cabinet.

11 The following sections on early engagement and completing a Regulatory Analysis Summary set out specific requirements that apply to proposals which are approved by Cabinet (or two or more Ministers with delegated authority).

12 Agencies are to contact the Ministry for Regulation as soon as possible after policy work commences on an issue that may result in a significant regulatory proposal being recommended to Cabinet. The appropriate point may be when preparing a first briefing for a Minister. Agencies are requested to initiate early engagement with the Ministry for Regulation via the channels specified in the Early Engagement section of the Ministry’s website.

13 Early engagement with the Ministry for Regulation is intended to support strong problem definition, clear objectives, and consideration of a range of feasible options. These are the foundations for developing good regulation, and getting them right at the outset can avoid poor quality regulation and subsequent revisions. The Ministry will engage most actively with more significant policy proposals, including those that affect the use and exchange of private property rights.

14 A Regulatory Analysis Summary (RAS) is a document authored by government agencies that summarises its best impact analysis about a government regulatory proposal, and accompanies a Minister’s Cabinet paper.[1]

15 RASs are intended to support policy effectiveness and resilience by providing impact analysis to decision-makers in a structured and consistent form. Among other things, impact analysis seeks to ensure that all material economic, social, and environmental impacts of proposed actions have been identified and assessed in a consistent way (including different or disproportionate impacts for particular groups or organisation types). Impact analysis also seeks to ensure that relevant international standards are identified, if any, and reasons for any divergences are considered.

16 A RAS must accompany all policy proposals taken to Cabinet (or two or more Ministers with delegated authority from Cabinet) if they include a government regulatory proposal, unless an exemption applies. A “government regulatory proposal” means a proposal that will ultimately require creating, amending, or repealing primary or secondary legislation. This also includes, for example, “in-principle” decisions (implicit or explicit), amendment papers, empowering or enabling provisions (including cost recovery), decisions around regulatory proposals that have previously been announced (including coalition agreements or political party manifestos), or decisions to adopt a member’s bill as a Government bill.[2]

17 Discussion documents do not require an accompanying RAS (or formal quality assurance) if they present a range of feasible regulatory options or are merely discussing issues without proposing solutions or options (‘issues papers’). Discussion documents which do narrow the range of feasible regulatory options will require an interim RAS.

18 For more information on whether a proposal requires a RAS, see the Ministry for Regulation website.[3]

19 Exemptions from a RAS are available for some government proposals. The four broad categories of exemption grounds are summarised below:

20 Exemptions are less likely to be available for proposals which restrict the use or exchange of private property.

21 Detailed eligibility information is outlined on the Ministry for Regulation website, including required processes to obtain exemptions. All exemptions must be logged on RIA Online to be confirmed. Specific exemption grounds may be subject to conditions (those conditions may include quality assurance of material substituting for a RAS, or a requirement to undertake a subsequent review).

22 Exemptions should be disclosed in the Impact Analysis section of the relevant Cabinet paper.

23 An exemption from completing a RAS does not provide an exclusion from requirements under the Regulatory Standards Act 2025 or other law-making requirements, such as assessment against the New Zealand Bill of Rights Act 1990. In other words, requirements like a Consistency Accountability Statement may still apply to a RAS-exempted proposal unless an exclusion from Consistency Accountability Statement requirements applies, such as under Schedule 2 of the Regulatory Standards Act or in an exclusion notice issued under section 7.

24 The RAS template can be found on the Ministry for Regulation website.[4] The template includes key features that are the foundations of impact analysis and effective cost-benefit analysis. For more guidance on the template, please see here. Guidance on good quality impact analysis can also be found on the Ministry for Regulation website. 

25 The RAS must be quality assured by an independent quality assurance panel, which applies the quality assurance criteria. The Ministry for Regulation determines quality assurance arrangements, including which agencies are on the quality assurance panel. See the Ministry for Regulation website for the required process to confirm quality assurance. All RASs should be logged in RIA Online and have their process confirmed by the Ministry.[5]

26 Quality assurance panellists must be independent and not have been directly involved in the policy process for the proposal (including authorship of the RAS).

27 A statement by the quality assurance panel, including a quality assurance rating, must be included in the Impact Analysis section of the relevant Cabinet paper (see section below) and in the RAS itself.

28 A draft RAS must accompany ministerial consultation on Cabinet papers.[6] Agencies should also strive to make the draft RAS available during consultation with other agencies, to inform agency feedback on a proposal.

29 The finalised RAS must then be provided when the relevant Cabinet paper is submitted to Cabinet committee (or delegated ministers) when seeking decisions on a government regulatory proposal.

30 The full text of the RAS must be published[7] in line with requirements set by the Ministry for Regulation. The Ministry for Regulation website will outline the required publication process.

31 The RAS must be published at the earliest of these events:

32 The URL of the published RAS must also be included in the Explanatory Note of the relevant Bill, Amendment Paper, or secondary legislation.

33 RASs must also be provided to select committees considering a Bill (or to the House of Representatives, if the Bill is to be passed under urgency and there is no select committee consideration).

34 Decisions about how policy choices are to be implemented, or given effect to, are critical to the effectiveness and cost of proposals.

35 During policy development, agencies should identify and develop effective arrangements for implementing regulatory proposals. This is reflected in one of the principles of responsible regulation in the Regulatory Standards Act.

36 Agencies should detail how the government regulatory proposals could be given effect, provide evidence to decision-makers that implementing this proposal is genuinely feasible, and outline what risks need to be managed and how this will be done. It is best practice for the lead agency to:

37 This section sets out expectations and requirements to support effective consultation on regulatory proposals. It also outlines requirements for major regulatory agencies to develop and publish advance regulatory plans.

38 External consultation is a key element of a good regulatory development process and helps policymakers better understand current issues, consider different options, and anticipate and address practical implications including potential unintended consequences and compliance costs. A good consultation process will also support future public acceptance and operational compliance.[9]

39 External consultation should be a normal part of the development of most regulatory proposals and be proportionate to the nature and importance of the issue. In rare cases, consultation might not be appropriate, such as when advance consultation would undermine the regulatory objective or when speed is necessary to avoid or limit imminent harm. 

40 External consultation can be a binding obligation, such as when required in legislation or in international agreements ratified by New Zealand. These obligations may include additional requirements, such as consultation timeframes, notification arrangements, or who must be consulted. Agencies need to be aware of consultation obligations and should alert decision-makers early so that provision can be made in the policy development process and timetable to meet those obligations.

41 International trade agreements are a common source of external or public consultation obligations for proposed regulatory measures. Some agreements to which New Zealand is a party have very broad coverage and will capture a wide range of proposed legislation. 

42 Further advice on consultation and consultation obligations, including information on obligations in some key international trade agreements, will be found in guidance to be published by the Ministry for Regulation. The Ministry of Foreign Affairs and Trade can also provide expert advice on consultation obligations in international agreements.

43 Advance notice of regulatory proposals supports effective consultation. It provides stakeholders with more time to consider the issues, plan their feedback, and prepare for future regulatory changes. New Zealand also has an obligation under the NZ–EU Free Trade Agreement to provide advance notice of major regulatory proposals relating to any matter covered by that Agreement.

44 To support effective consultation and meet New Zealand’s international obligations, major regulatory agencies[10] are to provide stakeholders with advance public notice of major regulatory proposals that they reasonably expect will be adopted in the near term. Notice is to be provided through publishing advance regulatory plans that should be regularly updated. There is flexibility in how these should be prepared but in general they:

45 More information on advance notice obligations and expectations will be found in guidance to be published shortly by the Ministry for Regulation.

46 This section sets out expectations and requirements to support the implementation of subparts 1 and 2 of the Regulatory Standards Act, which set out requirements for agencies to review the consistency of legislation with the principles of responsible regulation, and make transparent any inconsistencies through a Consistency Accountability Statement.

47 This Circular should be read alongside the Act itself, and other supporting material – in particular, the statutory guidance to be issued under section 26 of the Act.

48 For other information and requirements relating to the design and drafting of legislation see the Department of Prime Minister and Cabinet’s Policy and Law advice, and the Parliamentary Counsel Office’s Turning Policy into Law guide.

49 A Consistency Accountability Statement (CAS) is a statement from the chief executive of the responsible agency for a piece of legislation which confirms that the agency has reviewed that legislation for consistency with the principles of responsible regulation[11] set out in the Act, and summarises any inconsistency with the principles that is identified.[12]

50 The Act requires a CAS to be produced for all proposed legislation (Government bills, material amendment papers, and secondary legislation) unless the legislation is excluded or exempted.

51 Exclusions are set out in Schedule 2 of the Regulatory Standards Act 2025, and in notices issued under section 7(2) of the Act. There are also some limited exemption grounds for Government amendments, see paragraph 55 below.

52 When preparing a CAS, agencies must follow the guidance to be issued under section 26 of the Regulatory Standards Act 2025. This guidance includes how the principles of responsible regulation must be applied when assessing legislation for consistency (Part One), and guidance on when and how to produce a CAS (Part Two). The required template for CAS will also be included in the section 26 guidance.

53 Where CASs have identified inconsistencies with one or more of the principles, the Act requires the responsible Minister or maker to issue a Statement of Reasons. A Statement of Reasons briefly explains the Minister or maker’s reasons for any identified inconsistency with the principles of the Act. An optional template for the Statement of Reasons will be made available on the Ministry for Regulation website.

54 The Act requires the CAS and Statement of Reasons (if applicable) to be included in or linked from the explanatory note of the Bill, Government amendment or new secondary legislation.[13]

55 For Government amendment papers, a CAS is not required if:

56 Information on how to seek an exemption on the basis of materiality, will shortly be available on the Ministry for Regulation website.

57 A Summary of Underpinning Analysis must be prepared by the responsible agency to accompany a required CAS. This short document enables agencies to “show their working” and explain how the legislation has been assessed for consistency with each of the principles.

58 Authors must use the Summary of Underpinning Analysis template to be published on the Ministry for Regulation website. The Summary of Underpinning Analysis must be published in accordance with requirements outlined in the Publication Requirements section below.

59 The Summary of Underpinning Analysis must be linked from the explanatory note of the Bill, Government amendment, or secondary legislation, alongside the CAS and any Statement of Reasons.

60 For legislation subject to the Act’s requirements, and that requires Cabinet approval, there are additional process steps that must be followed. These process steps are to support transparency and effective consultation on the consistency of proposed legislation with the principles of responsible regulation.

61 When undertaking ministerial consultation on a Cabinet paper going to Cabinet Legislation Committee, a draft CAS and Summary of Underpinning Analysis must accompany the paper. The CAS and the Summary of Underpinning Analysis must also accompany the relevant Cabinet paper going to Cabinet Legislation Committee.

62 Where an inconsistency with the principles of the Act has been identified, the relevant minister must provide a draft Statement of Reasons to accompany the CAS when it is submitted to Cabinet Legislation Committee.

63 Agencies must publish CASs and Statement of Reasons (if applicable), alongside Summary of Underpinning Analysis documents on the agency’s website in line with guidelines set by the Ministry for Regulation to ensure accessibility and consistency. Publication requirements will be published on the Ministry for Regulation’s website.

64 This section sets out expectations and requirements to support the implementation of subpart 3 of the Regulatory Standards Act, which establishes a responsibility for stewardship of regulatory systems, and requirements for agencies to develop and report against plans for reviewing their stock of existing legislation for consistency with the principles of responsible regulation.

65 The Act requires chief executives of public service agencies to proactively engage in stewardship over the regulatory systems they administer.[17] In addition to this requirement, New Zealand has good regulatory practice obligations under some free trade agreements relating to periodic review of legislation.[18]

66 The monitoring and periodic review of legislation and regulatory settings is a key feature of good regulatory management and a core expectation of regulatory system stewardship. It helps to identify whether the existing arrangements contain errors, inconsistencies or gaps, are having unintended, unreasonable or inequitable impacts, or are being challenged by new technological, market or environmental developments. It allows an assessment of whether this is still the best regulatory option to meet the public policy objective, or whether there are opportunities to improve the performance of the regulatory system or reduce compliance costs.

67 Agencies must develop and publish plans for regularly reviewing legislation subject to CAS requirements.[19] The intent of this is to encourage agencies to, over time, assess their entire stock of existing legislation for consistency with the principles.

68 Consistent with the regulatory system stewardship responsibility set out in the Act, and to support New Zealand to meet its international obligations, these plans should also include anticipated reviews of existing legislation initiated for reasons beyond the requirement to assess the consistency of legislation with the principles of responsible regulation.

69 Plans should be updated regularly and include both a medium term (i.e. two years or more) schedule of proposed reviews, as well as setting out the agency’s longer-term intentions for completing consistency assessments of its stock of legislation.

70 In developing plans, agencies should:

71 For major regulatory agencies,[20] plans should be organised by regulatory systems where practicable. In addition, major regulatory agencies with lead responsibility for regulatory systems should aim to work with other agencies in the system to develop plans for review.

72 The Act requires agencies to prepare and publish regular reports on its performance in carrying out plans as they relate to requirements to assess existing legislation for consistency with the principles of responsible regulation.[21] These reports should focus on succinctly summarising any review work completed and the results, along with reasons for any amendments, delays, or cancellations since the last performance report.

73Agencies should also publish findings of any other reviews (and any analysis that support those findings) once those reviews are completed.

74 Further guidance on plans for review and reporting will shortly be available in Part 3 of the guidance issued under section 26 of the Act, and guidelines on the Ministry for Regulation’s website.

75 Agencies must publish plans for review and reports on the agency’s website in line with section 17(b) of the Act and guidelines to be set by the Ministry for Regulation to ensure accessibility and consistency.

76 The Act requires agencies to prepare and publish a CAS as soon as reasonably practicable after reviewing legislation against the principles of responsible regulation. Where an inconsistency is identified, the responsible Minister or maker must provide a statement that briefly explains the reasons for the inconsistency, and sets out the proposed actions (if any) to remedy that inconsistency.[22]

77 When a CAS is produced following a review:

78 An optional template for the Statement of Reasons will shortly be published on the Ministry for Regulation website.