Monday, 5 March 2018

For better costings

Parliament deserves better advice than it has been getting about the policies coming up under Labour's 100-day plan. There just isn't adequate time for the Ministries to produce reasonable regulatory impact assessments under those strictures. 

In this week's column over at Interest, I argue that where the Ministries haven't been able to produce a non-caveated RIS, the policy should undergo mandatory Post-Implementation Review. One reasonable way of doing that would be to sunset the legislation for six months after the due date for a mandatory PIR.

A snippet:
Imagine that you and your partner agreed that you would buy a house together after the wedding – and you both had your eyes on a particular property. After the celebrations, you hired a building inspector to check the place out.

Would it really be sufficient if the inspection report said only, “You promised that you would buy a house together after the wedding. This is indeed a house. You must purchase it.”?

I’d expect any of us would refuse to pay the builder’s invoice. But I also expect that we would give the builder more than five minutes to inspect the place.

I wish that this were about something as inconsequential (in the grand scheme of things) as one couple’s imaginary experience with a dodgy building inspector.

But some of the advice that Parliament has been receiving about the policies contained in Labour’s 100-day plan are every bit as inadequate as that builder’s report.


The bureaucracy is a servant of its political masters, and elections do matter. Newly elected governments have a mandate to implement their policy proposals. But in the absence of better official costing and evaluation of election policy platforms, Parliament often just does not have adequate information from the bureaus to assess whether policy promises still make sense after the election.

There is no simple solution, but we might consider one small improvement.

The Ministries will not always have time to provide an adequate assessment of the effects of policies. That can happen because of post-election pressures, but it can also happen because of unforeseen events between elections causing rapid political response.

When proposals have not had a chance to be more thoroughly evaluated, they should undergo more rigorous post-implementation review. A lot of Regulatory Impact Statements promise these reviews, but few seem ever to be undertaken. The reviews should be compulsory for policies undertaken under 100-day clocks.

When we buy houses, we make the purchase conditional on a good builder’s inspection. There often isn’t time to get a proper inspection report before making an offer, so we build in room to get it done properly after the offer has been made. And if the inspection report turns up cracked foundations, we have an out. Should we really expect less than that when it comes to policy changes affecting the whole country?

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