Impact analysis

Impact analysis, within the context of preparing Cabinet material, is a process of defining the policy or operational problem that needs to be addressed, identifying policy objectives, and the full range of feasible options for addressing that problem.

Impact analysis helps advisers and decision-makers to avoid the potential pitfalls that arise from natural human biases and mental shortcuts, and thus to make well-informed decisions. It includes analysis of those options for their potential impacts and assesses costs, benefits, and risks, and involves consultation, implementation planning, and arranging the plan for ongoing monitoring, evaluation, and review.

Cabinet requires two specific kinds of impact analysis to be undertaken:

Regulatory Analysis Summary (RAS)#

If a regulatory proposal is taken to Cabinet, it will generally need to be accompanied by a RAS.

A RAS is a templated document that summarises an agency's best advice on a regulatory proposal to both its Minister and Cabinet. It is based on the findings of the agency's regulatory impact analysis.

Agencies should work with the Ministry for Regulation to confirm (through RIA Online(link is external)):

• the quality assurance arrangements for the RAS
• which template to use
• the wording for the Cabinet policy paper impact analysis section.

Exemptions are available and should be logged in RIA Online(link is external).

RASs must be published on the websites of the authoring agency and the Ministry for Regulation (subject to any redactions consistent with the provisions of the Official Information Act 1982). RAS documents are published online at the time that materials are proactively released, or at the same time as the relevant bill is introduced to Parliament or the regulation is published (whichever is earlier). This helps ensure an open and transparent regulatory process.

The Parliamentary Counsel Office(link is external) provides guidance on the form and location of RISs in bills and amendment papers, and the requirement for departments to supply 40 printed copies of the RIS to the Bills Office.

For more information:

• see the advice on preparing RASs on the Ministry for Regulation website(link is external)
• refer to the Cabinet Office circular Expectations for Good Law-making [CO (26) 2], or
• email the Ministry for Regulation's Regulatory Impact Analysis Team at [email protected].

Climate Implications of Policy Assessment (CIPA) requirements#

To ensure that Ministers are aware of the implications a decision may have for New Zealand's future greenhouse gas emissions, Cabinet requires central government agencies to estimate and disclose the greenhouse gas emission implications for proposals in which decreasing those emissions has been identified as a key policy objective, or for which:

• the direct impact on greenhouse gas emissions is likely to be equal to or above 0.5 million tonnes CO2-e within the first ten years of the proposal period; or
• the direct impact on greenhouse gas emissions is likely to be equal to or above 3 million tonnes of CO2-e within the first 30 years of the proposal period for forestry related proposals.

A CIPA is normally provided when papers are submitted to Cabinet for policy approval. The CIPA should be independently assessed before it is submitted as part of a Cabinet paper.

The Climate Implications of Policy Assessment team in the Ministry for the Environment should be contacted early in the policy process, using the CIPA engagement form on the Ministry's website(link is external), if it is expected that a policy proposal will have significant emission impacts. The Ministry's website also includes a toolkit to help assess the greenhouse gas emissions of policy options and proposals. Agencies may need to undertake some preliminary analysis in order to help the Ministry determine whether a CIPA disclosure will be required.

The CIPA disclosure requirements don't replace the need to include greenhouse gas emission impacts in RIS's, or better business case analysis in situations where those Cabinet requirements apply.

As outlined in the Cabinet policy paper template, a statement must be included in the Impact Analysis section of a Cabinet paper, under a Climate Implications of Policy Assessment heading, which provides:

• an explanation of whether the CIPA disclosure requirements apply for a proposal which meets the criteria
• a summary of the key findings of the analysis
• a statement on whether a CIPA disclosure sheet is attached to the Cabinet paper, and
• the statement provided by the CIPA Team on the overall quality of the information set out in the disclosure.

The completed CIPA disclosure sheet attached to a Cabinet submission should be released together with the relevant paper in accordance with the proactive release policy for Cabinet material (taking into account the provisions of the Official Information Act 1982).

Further information about the CIPA requirements, including templates, detail about the types of proposals that are exempt, and the process for managing inadequate impact analyses, can also be found on the Ministry for the Environment's website and in the circular Climate implications of Policy Assessment Requirements [CO (20) 3].