Socialist Equality Group rallies against Regulatory Standards Bill

Proposed law, which limits taxation and levies, will lead to tax cuts for the rich, group says

Socialist Equality Group rallies against Regulatory Standards Bill

The new Regulatory Standards Bill (RSB), which New Zealand’s government is preparing to introduce, will have the effect of scrapping government regulations seeking to curb corporate profit, said a recent press release from the Socialist Equality Group.

The RSB’s principles aim to prevent these regulations from restraining private property rights and productivity, the press release said. The RSB, which intends to limit taxation and levies, will lead to tax cuts for the rich and will negatively affect public services and workers’ rights, the press release added.

ACT New Zealand is drafting this bill. According to the press release, for almost two decades, the party has been striving toward the changes that the RSB seeks to introduce. ACT has the support of the New Zealand Initiative, a lobby group for big businesses once known as the Business Roundtable.

David Seymour, ACT leader, has previously emphasised that businesses have spent billions of dollars to meet tax and regulatory requirements.

Seymour swore to restore the country’s de-regulatory environment of the 1990s, a period featuring a reduction in corporate taxes, an attack on social welfare and public services, and privatisation of state-owned corporations, the press release said.

The press release highlighted certain principles contained in an official discussion document on the RSB. These principles aim to guide the evaluation of current and future regulations. As per the document, legislation:

  • should not diminish individual liberty, personal security, freedom of choice, or action or one’s rights to own, use, and dispose of property, except if it is necessary to protect the liberty, freedom, or rights of others
  • should not take or impair one’s property without good justification and fair compensation, given by or on behalf of those obtaining the benefit of the taking or impairment
  • should only impose or authorise a levy to fund an objective or function if the levy’s amount is reasonable in relation to the benefits that the payers are likely to derive or the risks attributable to these payers in connection with the objective or function

Risks of Regulatory Standards Bill

Academics and environmental groups have noted that the first principle listed above covers neither the good of the environment and the society nor collective rights and duties, the Socialist Equality Group’s press release said.

Thus, some may argue that deforestation and pollution by corporations do not directly diminish individual liberty or that legislation limiting the availability of junk food, alcohol, or tobacco go against liberty, freedom of choice, and property rights, the press release stated.

Jonathan Boston, a public policy professor, commented on the RSB. Boston noted that the principles above could lead to the beneficiaries of environmental regulations, namely taxpayers, having to pay fair compensation to the businesses that the regulations supposedly impair.

“In effect, the principle of ‘polluter pays’ would be replaced with the principle of ‘non-polluters pay’,” Boston said in a submission on the RSB.

Regarding the third principle above, Boston suggested on a podcast that it might render it “difficult for the government to justify many of the current taxes that it has, and fees and levies that it imposes.”

The press release noted that, under the principles in the discussion document, the RSB may prevent levies against businesses unless the businesses themselves are likely to benefit.

As regards levies paid to the Accident Compensation Corporation, employers may argue that they do not benefit from helping people who cannot work and who can no longer contribute to earning profit, the press release said.

Employers may also argue that costs in connection with workplace health and safety laws are against the RSB unless they receive fair compensation on behalf of the beneficiaries, namely the workers, the press release added.