Question: Do the likely benefits from the Health & Safety Reform Bill (or any other Bill) exceed the costs?
Answer 1: They do if you hire the right economist
Answer 2: They do if you assume the benefits are large enough to exceed the costs

Public policy decisions have to be made on some basis. Politicians will naturally decide on the basis of their reading of public opinion. That may mean little more than a reading of recent opinion polls.

But what if the public is currently ill-informed about the likely benefits and costs? What if emotion is also running high at the time because of a recent disaster or alarm?

Emotional pressures to 'do something' can be hard for politicians to resist. Opponents will call them heartless.

New Zealand has had a few alarms in recent years. We have experienced the global financial crisis, finance company collapses, the collapse of the CTV building in Christchurch and Pike River.

In each case there has been public pressure to regulate to 'close the stable door after the horse has bolted'. This impulse has arguably dominated the counter consideration that 'a burnt child fears the fire'. The best hope for rational public debate and deliberation is a well-informed public.

In New Zealand, the public service is supposed to provide a competent assessment of the costs and benefits of regulatory proposals prior to any Cabinet decision on the matter. All too often it does so poorly. Cabinet members apparently fail to set a high enough standard.

I was at a business meeting this week in which a senior academic economist challenged a senior member of the government over this problem.

The first rather dismissive reply he got was to the effect that such assessments were too subjective to be worth much. To his credit, the economist persisted. He pointed out that an imperfect but competent examination was better than an inadequate or incompetent one, or none at all. 

To hire someone to provide a predetermined answer is to play with the politics of the decision; not its substance. To his credit, the politician conceded the economist's point.

Well it was a business audience, and that concession is cheap if it changes nothing. 

What about answer 2 above? See the sixth paragraph in MBIE's cost-benefit assessment here. Note the word 'if' in the last line!