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Insights 27: 25 July 2025
Newsroom: Dr Oliver Hartwich on getting things done without the double Dutch
 
Podcast: Exploring barriers to cheaper building materials in New Zealand
 
NZ Herald: Dr Bryce Wilkinson on the Government's Overseas Investment Bill
Bridging divides through shared purpose
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
When our New Zealand Initiative delegation visited Amsterdam last month, officials from the Advisory Board on Regulatory Burden shared something striking. Before talking to us, this government agency had researched New Zealand’s approach – and they were astonished. 

In the Netherlands, reducing administrative burdens has been an uncontroversial project for two decades. In New Zealand, meanwhile, aiming for better regulation has become distinctly political. Both creating the Ministry of Regulation and proposing a Regulatory Standards Bill sparked fierce debates. 

The different public responses became clear when the Dutch explained their strategy. From the start, they kept scope narrow – focusing on reducing paperwork and time. All parties understood this limited mission. There were no grand reforms, no ideological battles. It was just about making life easier. 

It worked. The Dutch cut regulatory burdens by 25 percent over two decades, surviving multiple governments.  

But the real achievement goes beyond numbers. “It’s about mental burden, too,” officials explained. They spoke of business owners previously drowning in paperwork and citizens baffled by requirements. 

Their approach remains apolitical. The agency never questions policy objectives – that is for politicians. They only ask whether they can achieve these goals with less frustration. This neutrality enables them to work with all governments. 

In New Zealand, on the other hand, regulatory reform often triggers deep concerns. Environmental advocates fear rivers will be poisoned. Worker groups see threats to employment protections. Others worry about sovereignty and corporate power. 

Why such strong reactions? Jonathan Haidt explained this in his 2012 book The Righteous Mind – Why Good People are Divided on Politics and Religion. His insight: when something threatens what we care about – clean rivers, jobs, democracy – we react emotionally first, then find reasons to support our emotional objections later. 

Thus, when it comes to better regulation, each group’s concerns shaped their political views on the Government of the day. This transforms technical reforms into tribal warfare. 

But what if we could interrupt this pattern? 

Despite different political views, most New Zealanders share fundamental goals such as affordable homes, excellent schools, quality healthcare, cleaner rivers. Could we depoliticise these debates as the Dutch did with regulation? 

Yes, we need vigorous debate about achieving good outcomes. But recognising what binds us matters more than what divides us. Progress requires less partisan positioning, more focus on results. 

The Netherlands faces its own divisions. Yet on regulatory reform, they found a way forward. 

The Dutch succeeded by keeping regulation reform apolitical and uncontroversial. Taking the politics out of an issue – as they proved – sometimes delivers what politics cannot. 
When transparency becomes a threat
Roger Partridge | Chairman and Senior Fellow | roger.partridge@nzinitiative.org.nz
Imagine asking your accountant to explain their calculations – and they respond by demanding triple their fee and warning you will be embarrassed by what they find. 

That is roughly what happened when New Zealand’s Ministry of Business, Innovation and Employment (MBIE) was asked about new transparency requirements.
 
The story begins with the Government’s Regulatory Standards Bill – a coalition agreement measure. MBIE, the department responsible for regulatory policy, was asked to brief its Minister. 

The Bill proposes something straightforward: when ministers introduce new laws, they should tell Parliament whether those laws comply with well-established legal principles – like clarity, rationality, respect for property rights – and explain any departures.   

This approach is not revolutionary. These principles are already embedded in Cabinet guidelines and regulatory impact frameworks. The Bill's aim is to ensure some of the most fundamental of those principles are not quietly ignored.  

MBIE’s response was extraordinary. Internal documents released under the Official Information Act this week show officials claimed implementing the Bill would require up to 285 new staff costing $34 million. Radio New Zealand reported MBIE warning of “continuing embarrassment for Ministers” – essentially admitting many future laws would fail basic standards. 

The cost estimates are also absurd. MBIE’s workforce doubled from 3,300 to over 6,600 between 2017 and 2023. Yet when asked to explain whether regulations comply with fundamental legal principles – which should be routine – MBIE’s response was not redeployment, efficiency, or streamlining. It was to bid for hundreds more staff. 

Worse, when MBIE’s advice was requested through the Official Information Act, the department blacked out nearly everything – not just recommendations, but headings and summaries. A department warning about the dangers of transparency could not even be transparent about its own advice. 

The real issue with the Regulatory Standards Bill is not that ministers might be embarrassed. It is that MBIE sees the Bill as a problem rather than progress. But if proposed laws regularly fail to meet basic standards, surely we should know about it? 

Good regulation requires more than rules on paper. It requires a culture that values openness. When the department meant to champion these values treats accountability as an existential threat, it is not the transparency requirements that need rethinking – it is the culture itself. 
Buttering up a slippery slope
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
You might not remember 2025, even though it’s only two decades ago. AI was only just beginning. Looking back, it is easy to tell where the path back to price setting boards started. 

This was before synthetic fermentation, when New Zealand still exported a lot of butter and global markets set the price. Whenever butter prices dropped, consumers barely noticed. Whenever they rose, people screamed. 

The orthodox economics still practiced elsewhere, and back then, sometimes even in New Zealand, offered an obvious solution. When global dairy prices rise, farmers make more money and pay more tax. Government collects taxes and gives money to poorer people, with payments adjusted for inflation. People then decide what to buy. 

Unfortunately, some prices draw a lot of attention. The spike in fuel prices during the 2020-2022 pandemic saw the government subsidise road users. People started to think that the government should step in whenever prices increase.  

That populist turn solidified under the 2023-2026 National government.  

A July 2025 meeting between the Finance Minister and the head of a large milk company caused a media frenzy about butter prices, followed by condemnation of supermarkets. Both drew popular applause. 

Things slid from there. People came to expect public excoriation of businesses whenever prices increased unexpectedly.  

In short order, the Minister was having to devote two or three days every week to these circuses. It was seriously impeding other government business.  

So, the Minister delegated the job to a new Board established to supervise prices and to bring a more formal bureaucratic process to the inquisitions.  

The new Labour-led government in 2026 kept the Board but broadened its role. It was more convenient for everyone involved.  

Previously, anyone reducing prices risked prosecution for predatory pricing. Anyone increasing prices had to be gouging. And keeping prices the same was obviously collusion. It was a risky time. 

In the new order, the Board and the businesses it supervised agreed on prices for the next year. Officials viewed government-enforced price coordination as obviously beneficial.  

The real cost of everything rose considerably. Shortages of some things and surpluses of others abounded.  

Government had first call on short supplies of butter and often used it for industrial purposes. It is a fine lubricant, useful for making slopes more slippery. Most of the rest was exported. 

But at least the prices listed on the empty supermarket dairy shelves were low.  
 
On The Record
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