This week we released a research report, A Matter of Balance: Regulating Safety. It looked into the costs and benefits of Ministry for Business, Innovation and Employment's (MBIE) campaign to reduce workplace injuries from falls from heights of less than 3 metres in residential construction. 

The report found that the annual cost to New Zealanders could be well over $100 million a year and that MBIE was unable to supply any official cost-benefit assessment justifying its campaign. 

In an earlier short article published in January this year, we had opined that it would be irresponsible for government regulators to impose substantial costs on the community without a proper prior demonstration of greater expected benefits.

MBIE subsequently drew our attention to a 2014 report by BRANZ. It did make a marginally favourable cost-benefit assessment of the campaign. On inspection, this report was commissioned not by MBIE, but by the Scaffolding Access and Rigging Association of New Zealand, an interested party. 

Our report examined BRANZ's analysis. BRANZ put the net present value cost of the campaign to the community at a very substantial $1.07 billion, or $79 million annually. It put the net present value of benefits at $1.13 billion.

However, 98% of those benefits were internal to the firm, being shared between workers and owners through improved quality of life for workers and, more controversially, postulated productivity gains in various forms. 

Unfortunately for MBIE's case, such benefits do not justify a regulatory campaign. They can be secured internally for the mutual benefit of workers and employers regardless.

Moreover, BRANZ did not identifiably include compliance costs for standard repairs and maintenance work, as distinct from additions and alterations. To do so could, indicatively, double its cost estimates, causing costs to greatly exceed benefits. Nor did it allow for unintended safety consequences such as greater injuries from erecting and dismantling scaffolding or greater recourse to 'do-it-yourself' work.

Yesterday's Dominion Post published some comments in response by WorkSafe NZ's chief executive. Regrettably, they did not even attempt to justify the campaign in terms of its benefits relative to costs.

Government regulators work in silos. A work safety regulator can expect praise if workplace accidents fall, but not if, for example, road accidents fall or homes are made warmer or safer. If control departments and ministers do not require them to justify the costs of their programmes rigorously, they probably won't. So are they going to?