Tēnā koutou katoa, welcome. For our Australian viewers who are joining us today, we want to begin by acknowledging the traditional custodians of the land we work on and the communities that we work with. We acknowledge their history, culture, elders past and present.
And in Aotearoa New Zealand we would like to acknowledge tangata whenua, especially those iwi of Te Whanganui-a-Tara where we're based. I'm your host Jeremy Markham and in this webinar we're going to do a bit of compare and contrast of the Australian and New Zealand regulatory landscapes based on our trans-Tasman experience. Now for some of you this is the first time you've been joining us and you may not be so familiar with Alan and Clark so just a very short, very quick introduction.
We're an Australasian based consultancy and we're really committed to making a positive difference to communities throughout Aotearoa, Australia and the Pacific and our areas of speciality include strategy, change management, programme delivery, policy research evaluation and on it goes so there's a lot we do. As an organisation we're really committed to empowering clients to overcome society's challenges and this is one of the reasons why we regularly run these free webinars and we create desk guides and so forth and provide expert advice wherever we can. With that said, I said before we really want today to give our reflections on some of the insights we've been having from both sides of the Tasman about what's happening in Australia and in New Zealand's regulatory domains and so I want to kick off by introducing our two panellists but as I do that I just want to ask you to please, please put any questions you've got in the chat in Teams.
We do have some time towards the end or we hope to have some time at the end where maybe we can answer some of those questions so please do do that and anyway so my two guests, we've got Charlene Harvey and we've also got in Australia Sarah McDowell. Charlene, why don't we start? Why don't you tell us a bit about yourself? Thanks Jeremy. So hi, I'm Charlene Harvey and I'm the Regulatory Strategy and Practise Lead here at Allen & Clark for New Zealand and basically what that means is that I work with regulators on their operating models and their regulatory strategies and help lift their maturity in terms of regulatory practise.
So while I'm based here in Aotearoa New Zealand I've had the privilege of working with regulators in Australia and New Zealand and across the Pacific. That's pretty cool, yeah awesome. Sarah, why don't you tell us a bit about yourself? Thanks Jeremy.
Good morning Australia and good afternoon New Zealand. Hello, yes I am Sarah and I'm Allen & Clark's Australia's regulatory lead. I advise the Australian Government and state and territory governments on regulatory design and implementation.
I am also a regulatory practitioner serving as a commissioner at a Victorian regulator. Awesome, okay that's great. So we've got two obviously really experienced and clever and smart people so we're going to have a really good conversation today I can tell that.
So to kick us off right so New Zealand and Australia we always think about a bit of a rivalry, it's a little bit oppositional but I kind of want to flip that script a bit and I want you to think about just looking across the ditch what are some of the surprises or positives that you've noticed in the different environments of the regulators? Maybe Charlene you can start. Yeah so the one thing that always surprises me is how Australian regulators need to deal with the complexity of operating kind of in Commonwealth, state and territory systems and just how they have to navigate all three. I know that when I'm working with Australian clients you know this dynamic can really slow things so I need to make sure that I build in a little bit more time into projects whereas in New Zealand I know that regulators can be a little bit more agile and connect with a little bit more pace.
Cool and so thanks for that. Sarah? Yeah thanks Jeremy. I think the main thing I've learned about New Zealand's regulatory environment since working at Alvin and Clark is its long-standing commitment to investment in regulatory system capability.
This includes the professionals who help design, implement and operate New Zealand's regulatory systems. I have been very impressed to learn about the formalised learning approach and how it supports the growth of regulatory professionals across the ditch. Australia is definitely catching up with formal regulatory development programmes being established and rolled out.
Yeah I think just there's been this general trend over the last kind of 10 to 15 years and yes there's been some long-standing programmes to uplift the capability in New Zealand so some of you might remember the Government Regulatory Practise Initiative or GREG that's been handed over to the Ministry of Regulation but also to the likes of Malcolm Sparrow, Grant Pink. I think that there has been this growing awareness that effectively regulating and having you know really robust regulatory craft takes knowledge and skills and expertise. Sharlene you know reflecting on you know what's occurred since the last you know 10 to 20 years in regulation it makes me think about the changing expectation of regulators here in Australia.
There was this famous Aussie Rules football coach named John Kennedy Senior who gave this very famous speech at halftime during the 1975 Grand Final and in that speech he said three simple words, don't think, do. And I often reflect on that quote in terms of the transformation and expectation of regulators in Australia over the past 10 to 20 years. When I was a junior regulator 20 years ago there wasn't much doing like or at least doing in relation to compliance and enforcement and a lot of this had to do with the way regulators had been set up.
In 2006 I remember finding a breach against a regulated company and pretty much the only options we had were to send a nasty letter or revoke their licence. A company mind you which had millions of customers. So as you can imagine we sent a nasty letter.
But now regulators are expected from government, from media and importantly from the community to do. And as a result regulators have been given more powers and more resources to do the job. The challenge we're observing now is for regulators to meet these high expectations and to use these new powers and these new resources in a way that effectively delivers outcomes for the community.
That's what makes the New Zealand experience around capability development and indeed Charlene's expertise in driving capability building programmes for regulators so relevant and needed for addressing the current challenge faced by Australian regulators. Now I don't want to over pitch the capability here. I'd say you know there's room to grow in terms of I'd say across the regulatory landscape here in New Zealand with regulators.
You know there's still quite a lot of maturity despite the long-term capability programmes that have been in place. And while there are some really good regulators here in New Zealand I do tend to automatically think about the Australian regulators such as AUSTRAC and ACCC and the ATO. Look I agree we definitely do have some great regulators here in Australia.
And in fact you know as of a couple of hours ago it looks like we're going to get a new one with the Prime Minister announcing that there will be a passage of a bill to establish a National Environment Protection Agency. But this new agency, the new EPA alongside all the existing regulators will still face the expectation of delivering for the community and certainly some more than others. Particularly those responsible for the child care sector.
In addition to this challenge Commonwealth regulators are also being required to help improve Australia's productivity. The Australian Government has set a whole of government objective for Commonwealth regulators to better balance risk mitigation with efficiency, growth and dynamism. As a result a ministerial statement of expectations are currently being updated to ensure regulators deliver on this objective.
So here in Australia regulators are not only focused on the growth of our regulatory capabilities to meet community expectations but the growth of productivity. Cool so some really really good thoughts there. Yeah some really good insights.
So thanks to both of you for sharing those. I guess next on my agenda I kind of want to change tack a little bit and talk about something which is a little bit front of mind for some people. So in New Zealand the public service it's been pretty intense the last couple of years.
Lots of things going on. Charlene you're very heavily involved in New Zealand. So what would you say are some of the key trends for regulators in New Zealand? I think intense would be a good descriptor.
I think there might be some other words that some of the New Zealand regulators might say that could describe the last couple of years. So just as a bit of context for our Australian viewers, here in New Zealand there's been a huge focus in terms of fiscal restraint and efficiency. And over the last couple of years I'd say most of the public sector have been asked for savings and to reduce costs.
And this has resulted in a lot of restructures with an overall reduction in the public service staffing numbers. So what has been interesting as a consultant actually either working alongside clients and also watching the entire public sector go through this is noticing how different agencies have approached reducing their costs. I've summarised them on a slide now as a quick sidebar.
We are going to be sending out the slides that we use in this webinar after the webinar. So don't feel that you need to scribble down notes or anything. You will be getting a pack of all the slides afterwards.
So just going back to cost cutting options. Some of the options, the more positive ones, have led to a fundamental revisioning of how agencies or regulators add value and their role in the system. They've even thought about more efficient ways of delivering services.
It's the same outcome but at a lower cost. So while the process might not have been pleasant, especially in terms of reducing staff, the overall functioning of the agency or the regulators actually had some positives. So if there's one watch out when cutting costs, it's to make sure that you're not negatively impacting the agency's operating model.
Just have that in the back of your mind. Yeah, good point. Now I thought I'd throw in this slide because I get asked about this quite a bit and especially at the moment because I think agencies are still looking for savings or reductions.
So I've summarised some quick tips if you are thinking about cutting costs. So tip one, you want to get really clear on the impact you want to achieve and as a regulator your role within the system. So most of the time this involves taking a step back, recognising all the stakeholders within the system, the dynamics of the system and the maturity and the compliance of your regulated parties.
Tip two, effectiveness. Now this is where you want to look at each one of your interventions and ask are they being effective. I want you to be ruthless and really interrogate your work.
I once worked with a client who insisted that their customers had to have a face-to-face visit to receive services. Now this was expensive and it was timely for both the organisation and their customers. And of course when I questioned it I was told that this was their operational policy and there was no way that this could be changed.
And then of course the big change came along with COVID which kind of changed the world and of course they had to change. They had to move their visits online and of course this resulted in huge efficiencies with a lot better outcomes. Now some of the leading regulators that I work with, they track all their work and they really understand the interdependencies of their work.
So one of them, they knew the exact linkage between their outbound communications and what that meant in terms of how it created inbound contacts. They actually had a metric around it. They also knew the interdependencies between their contacts.
So for example if an email wasn't responded to within three days it would generate a phone call and if people couldn't get through on the phone it would then generate into a face-to-face counter contact. In some ways it was escalating in terms of the price of each contact channel. So they knew that they had to manage their work levels in such a way that it didn't generate unnecessary work.
So you know if you're being asked for efficiencies or cutting costs, think about where there are inefficiencies within your current work programme and you can use them to manage within a smaller budget but you have to know your work. I'd say the last tip is around prioritisation. So you have to be really clear around what you're doing and why and the impacts it will have.
In some ways robust and effective prioritisation is kind of the key for regulators and as a regulator you're never going to have enough resources to address all the issues at hand and it's why best practise says that you should be risk-based. You know I think we've all heard about risk-based prioritisation but in practise when you actually like scratch the surface and when I've been working with regulators and you really test that concept I think there are different understandings around what does risk-based mean and how they apply it and some are more impactful and effective than others. Yeah that's cool.
So there's three useful points there and certainly again audience if you have particular questions about those three do put them in the chat. Hey listening to that Sarah do you have any comments about what you're seeing on your side of the ditch? Okay yeah thanks Jeremy. Look I think prioritisation you know is an interesting one and it's interesting because we always talk about it as regulators but always find it very hard to do and achieve on a day-to-day basis.
Now I know many of us you know on this webinar would have received some form of training from Malcolm Sparrow. Professor Sparrow has taught us many things but he has taught us time and time again that we need to prioritise by picking important problems and fixing them. In fact you know when I was working at a Commonwealth regulator 15 years ago we sought to realise Professor Sparrow's vision by creating the Sparrow project work stream whereby we would focus on essentially identifying and solving specific problems.
The problem was with that approach is that we didn't stop doing business as usual work we just simply added to it. I think you know from my time working at regulators my observation is that we really saw prioritisation realised during COVID when many regulators you know we by necessity had to reorientate their work streams to support the community to be protected and I know this firsthand having worked at an energy regulator during that time. You know what informs our approach to prioritisation is critical for ensuring sustainable regulatory practise.
As I mentioned before you know meeting community expectations and building trust is driving you know the focus of Australian regulators at the moment alongside improving productivity. Relevantly you know as part of Australia's productivity agenda key regulators and government departments were asked this year to put forward ways to improve regulation and minimise unnecessary burden. The Department of Finance reports you know there were six sort of key themes arising from these submissions which included you know regulatory simplification, enabling digital and data capability, better engagement, working closely you know with stakeholders in the design of regulation, improving transparency and performance you know having meaningful performance metrics, greater collaboration and targeted reforms you know making changes that support innovation and efficiency while promoting and maintaining public trust.
So while these ideas arose from Commonwealth regulators and departments I think it's fair to say that these themes are being observed across Australian states and territory regulators too. Just to help things out I've thrown together a summary of the different expectations of regulators between Australia and New Zealand and you'll see on the slide you know there's a slightly different emphasis and Sarah I really love how you were talking earlier before around the ideas from Australian agencies and departments to lift productivity. I think if I remember there was about 150 ideas and what I found interesting looking into it was that these ideas actually didn't require additional funding.
It can all be done within baseline. I think that was one of the criteria of the ask of the departments that you know this doesn't come with funding, this wasn't a wish list so you know the question I'm asking is if New Zealand agencies were asked the same question in terms of how to lift productivity in New Zealand like what kind of ideas would really come through. Yeah interesting so yeah I'm sure we could talk about that at length but I do want to move on because I do know we've got limited time so I just want to talk about something now which is a pretty big deal over here in New Zealand.
So we've had the establishment of something called the Ministry of Regulation. Tell us a little bit about how you think that's affected the landscape shall we? Yeah so I actually think that the establishment of the new ministry has had quite an influence for New Zealand regulators and what it's really highlighted is the impact of regulatory burden but also what it actually means in terms of how can you reduce the onerous obligations within the different regulatory systems etc. I know that the ministry is doing really great work when I was talking about onerous obligations you know they're actually addressing and working through in quite a systematic way to address those obligations and that it's also highlighted the dynamic of those overlapping systems and just how complex can be.
I actually caught up with Alex McMinn who is the head of the regulatory system capability for the Ministry of Regulation earlier in the week to discuss the work of the ministry and his insights into New Zealand's regulatory landscape so let's take a look. Joining us here today we have Alex McMinn who is here from the Ministry of Regulation where he leads the regulatory system capability function. Thank you for joining us here today.
Thanks for having me. Okay for the people that are hearing about the Ministry of Regulation for the first time how about you give us a little bit of a 101. Great so the ministry is a central agency we were established in March of 2024.
We have a really clear mandate which is to deliver quality regulation for New Zealanders. We do that in three ways we have three functions we have a policy function so that looks at the way that regulation is designed so that comes down to us through early engagement or second opinion advice where an agency that's developing regulation is required to come to us really early in that development stage so that we can identify is a really clear problem statement is regulation actually the best tool to solve this problem are there other ways government can intervene and then also through that is through the regulatory impact assessment process so that's further along the development of regulation where there's a regulatory impact statement so we'll give a quality assurance over that to make sure it's meeting the of good policy making that's the policy function the second function is reviews and red tape issues so we do sector reviews so we do try and do four reviews a year around a particular sector where we think as a ministry our level of expertise around good regulatory practise and regulatory economics and regulatory policy making can go into a sector and review that sector engage extensively with the public with regulated parties with regulated entities and regulators identify the issues then identify potential solutions for those issues that then go to cabinet and identify how those changes could come about so whether they're legislative changes practise changes or even changes around institutional form and function and then there's red tape tip line issues we have a web form on our website where individuals who have individual issues around regulation they can share issues with us and we will triage those issues we will send those issues to the relevant regulator and identify where the issue sits within their programme of work and where we can provide relief and apply an element of kind of pressure and objectivity to bring about change to address those issues and then the last function is my team which is regulatory system capability and that's around lifting the regulatory practise and capability of people who design deliver and govern regulatory systems in New Zealand so you have the privilege of almost being like a having a bird's eye view across the sector of what's working what's not and some of the common challenges what are you seeing in terms of the common challenges for regulators yeah that's a great question so before we identify the problems where we wanted to understand what does a regulatory sector look like in New Zealand so we mapped that there are 250 regulators in New Zealand which is quite a lot for a small country like New Zealand but what that identified was there are persistent and common kind of systemic problems that we see across different regulators regardless of their actual system or their regime that they're regulating so the first issue we identify is some regulators really lack a really clear articulation of their regulatory strategy the objectives they're set out to achieve and then with that what their priorities are and how they're going to match their resources to those objectives and priorities and what that means is if a regulator is really really clear around what their strategy is then one that can help orient their staff on actually what they are meant to be doing and how they're meant to operate but also gives great clarity to regulated parties and businesses who are investing time and money and capital into being part of a regulatory system and so that gives them great clarity around actually how the regulator is going to respond and how the regulator is going to act and how they can recognise that they're part of that system so that's one area that we see the other area we see is that there's still a lot of kind of old ways of regulating in New Zealand so an example of that is in the space of annual licencing so in occupational regulation where you have an annual licence to be able to perform your role within a profession and that that creates a whole lot of peaks and troughs for a regulator and that's quite an outdated way of of managing the entry of people into a system and so what we'd like to see is a bit more flexibility around how that's done so using things like accreditation based models where if a thing that needs to be approved in order for it to enter a regulatory system rather than going through the standard kind of licencing approvals process what are other ways that could be done and accreditation is one of those ways that it could be done. Another issue we're seeing is through regulatory systems that are really rigid and aren't adaptable to the changes that need to be made to meet the expectations of the public and of the environment that we're regulating in.
New Zealand's a very small country and a small economy and we need to often we are the adopter or the recipient of standards and things that are new markets that are being regulated and so we need to recognise that while many of the legislation has been baked in that doesn't mean as a regulator you're stuck with regulating that in a certain way there's a lot you can do in terms of non-statutory tools things like guidance operational policy tools and templates that mean the regulator can be a bit more agile and can respond in a bit more adaptable way for example with AI coming in with cryptocurrency with some emerging markets like big economy roles and Uber the legislative framework might need to change that's a very slow difficult process but there's a lot a regulator can do that is non-legislative that could make that system a lot more adaptable. So to wrap up this conversation Alex if you could leave the audience today with one message or regulators today with just one message and one key takeaway. That key takeaway would be check out our website regulation.govt.nz it's full of great resources and updates around the work that we're doing if you have any questions on what we're doing or you want to catch up then please email me at systemcapabilityatregulation.govt.nz Thank you for joining us here today Alex we've really appreciated the conversation and your insights.
Thank you. And thank you for everyone online. Cool awesome yeah no really really interesting video there I will confess that after I watched it I actually went and looked at regulation.govt.nz and had a look at what they're doing it was really cool.
Yeah they're doing some awesome stuff. Yeah it was actually really interesting and enlightening and even under the resources section I noticed there was a link to an Australian document so obviously they're doing some kind of good collaboration there so that's real good good news. But it did make me think Sarah over on your end right do you have anything that's like the Ministry of Regulation?
Yeah, thanks, Jeremy. You know, we do like Australia being a wonderful federation. We have federal, state and territory level agencies delivering regulatory capability guidance and expectations.
For example, the Federal Department of Finance is the Australian government lead on regulatory policy practise and performance. But in addition to this, states and territories have their own agencies, whether they're separate or within a broader department, which provide regulator performance guidance. This includes Better Regulation Victoria and the Office of Better Regulation in Queensland.
But, you know, in reflecting on the performance of regulators and opportunities to strengthen the performance of regulators, I also think it's important to have regard to outside reviews and how they're critiquing the performance of regulators. And this can include parliamentary enquiries to basically understand how regulators are meeting community expectations. For example, there was a recent enquiry by the Australian Parliament into the performance of Commonwealth regulators.
And that enquiry generated a range of reflections, good and certainly, you know, opportunities for improvement. But I'll come back to this a bit later on. Oh, OK, cool, cool.
Sounds good. OK, so I know that in New Zealand, I've heard that in New Zealand, one of the main ideas within the public sector that might be a little bit different to what's in Australia is this concept of regulatory stewardship. Tell us more about that.
OK, so regulatory stewardship, it's actually quite a powerful concept. And increasingly within my work or Alan and Clark's work, we are working with regulators to put this into practise. So for those of you in Australia, when we talk about regulatory stewardship, in New Zealand, we're really talking about a shift in mindset.
So, you know, from running a rule book to taking care of an entire regulatory system. Now, the term regulatory stewardship has been around for about the last 10 years. And I was instigated because there was a few regulatory failures in a couple of sectors and the subsequent reviews found that there was not any clear owner that was looking after the long term health of the regulatory regime.
So now in response, it's actually a legislative obligation, which makes all public sector chief executives explicitly responsible for the care of the regulatory systems for which the organisation has either policy or operational responsibilities. So it's not an optional extra, a nice kind of tack on. It's actually an accountability which is built into how the regulatory system is meant to function.
Now, over the past decade, regulatory stewardship has moved from what could be considered a policy idea to quite a practical discipline. So stewardship is about making sure that the regulatory system remains fit for purpose over time, and that they still deliver the intended outcomes, impose no unnecessary costs, and evolve as society and technology change. So on the slide, or the next slide that's coming up, you'll see that there are five key activities that help bring stewardship to life.
Now, stewardship should not be an abstract idea. You know, this is a practical discipline. You know, it links together policy intent, operational delivery and long term trust of the system.
So in terms of the five key ways that you want to make this come to life, you know, you want to make sure that you understand all parts of the system, the lead, the actors, the incentives, the outcomes you're looking for. You want to make sure that you're monitoring the system and the performance of the system. And that includes making sure that yes, you're all the risks and the vulnerabilities of the system, but also how the system is performing for the various actors, the citizens, society, businesses, but also what's happening in the broader environment.
You want to make sure that you've got really robust engagement approaches with regulated parties. And what you're trying to do there is making sure that you want to understand the real time impacts and that you can actually work with them to influence those broader outcomes. You've also got mechanisms for reviewing and refreshing the rules.
And you want to make sure that you are really improving the capability within the organisation. And also, you're also sharing the insights that you're seeing as a regulator with your regulatory community. So basically, it's asking regulators to be proactive, collaborative, you know, system focused and curious.
You know, while the term in New Zealand, you know, it's kind of bandied around and everyone kind of knows of it. I would say that in practise, it's still a concept that is maturing and different agencies have got different approaches for how they bring it to life. So some agencies have got a quite a structured approach to regulatory stewardship, and they will regularly review the systems that are within their mandate.
Other agencies have got dedicated teams, so the capacity and the capability to actually look at their systems. But I do think there's been a bit of a bias towards the legislative element of it. And while that is an important piece of the puzzle, it's only a part of the puzzle.
And I know this because of this bias, a few of the agencies that I've worked with have not realised their own regulatory stewardship obligations, because they don't have a policy function. And what stewardship is really trying to get you to do, you know, good regulatory stewardship means having good regulatory practise. So when we work with regulators in New Zealand, especially when we're designing their regulatory operating models and strategies, one of the first steps we do is work through their regulatory identity.
And part of this is exploring around how they give life to their role as a regulatory steward. You'll see on the slide that we've just summarised just a few examples of how traditional approaches to regulation and operating with a mindset that's more akin to a stewardship mindset are different, or slightly different, the nuances are different, and how this would flow on to have different ways of working. And you'd need different capabilities to, you know, to have in place to really bring it to life.
Cool, that was a nice explanation there. I'm really keen to bring Sarah in, just to see if you've got any thoughts on that. Look, yeah, thanks, Jeremy.
And thanks, Charlene. Regulatory stewardship probably hasn't really been part of the lingo in Australia's regulatory community. But to defend Australia's honour, I think many regulators do deliver on the principles of regulatory stewardship.
And certainly, you know, we are starting to hear about it more and more across the Australian public service. But that said, I do think we can learn from New Zealand's formalised regulatory stewardship approach, and reflect on how and where this can be applied in the Australian context. This is particularly relevant at a time the performance of Commonwealth regulators are being scrutinised by Australian Parliament.
And as I foreshadowed before, you know, this year, the Australian Parliament's Joint Committee of Public Accounts and Audit completed enquiry into the administration of Commonwealth regulations. The committee made a range of recommendations to improve the performance of Commonwealth regulators. And these recommendations included, essentially, to require regulators to publish a statement that, for example, itemise their regulatory obligations, set out their risk-based approach to compliance, you know, identify their compliance and enforcement process, you know, set out their regulatory powers and their offences and the available offences and penalties under legislation.
And also, you know, their measures of impact and how they would be measured against those measures in future. Now, this enquiry, you know, followed similar time to the 2023-2024 audit by the Australian National Audit Office into the performance of Commonwealth regulators. Now, notably, the audit office reflected that the audited regulators' performance measures were not relevant, clear, reliable, or aligned to entities' purpose or key activities.
In terms of regulatory stewardship and sort of capability and leadership development and across, I suppose, the Commonwealth, you know, we are seeing leadership from Commonwealth regulatory leaders through the regulatory leadership cohort made up of heads from key regulators. The cohort is driving a reform agenda to support improved regulatory practise. And this includes as part of its objectives, you know, supporting regulator maturity, skills and capability development now and into the future, but with a particular focus on data capabilities.
So, as a collective, I think what these processes, these enquiries are telling us is that Australia's regulatory practise is evolving and maturing. And by looking at our counterparts across the ditch, in addition to other jurisdictions and even our own lessons as regulators, you know, we can continue to strengthen our regulatory practise. That's cool.
So, I can really get a sense of the progress there. So, thanks for that. Thanks to both of you for that.
Now, very limited time, so we will try and keep this very brief, but just the issue of artificial intelligence, anything specific for regulators? Do you have a view on that, Shelley? I think the possibilities for AI is really huge. And I think about one of my favourite business success stories. So, it's New Zealand Success Story Zero, which provides accounting software for businesses.
And it's actually become the leader in cloud accounting across Australia and New Zealand and the UK. Now, there was a deliberate choice around 10 years ago around how they were going to handle customer growth. At that point, they had about 100,000 customers.
And within the next two years, they were looking to have a million customers and they didn't have a contact centre at that time. They were still relatively new. They just had one email address which customers could use.
Now, Zero built a digital online platform for managing contacts. And then they've been very deliberate around how they've built an AI capability to handle all inbound enquiries. They've now grown to about 4 million customers and they get about 18.6 million contacts per year.
And 97% of them are addressed first time with an AI response. That means only 3% get escalated to a person. Now, if you are running a traditional staffing model for a contact centre, that would mean you'd have a contact centre of about two and a half thousand staff, and they actually only have 350.
So, when I think about this example, you can see the implications for other organisations, including regulators. But I'm really mindful that at the moment within the New Zealand public sector, I'd say they're taking quite a mindful approach. There are some challenges for New Zealand regulators when adopting AI.
The public is not ready for widespread AI in the public service across all tasks. I think there's an expectation that the government will be a follower instead of a leader. I'm also mindful that the context around the private and public sector and the ways that they operate and the implications, if you get it wrong, are quite different.
So, in the back of my mind, I've got the Australian Rabodet example. So, Rabodet was an automated debt recovery scheme in Australia. Now, that was not AI.
It was just an automated algorithm. But it just showed that there's some caution that's required when integrating technology in some of your end-to-end processes. Within New Zealand, I think we've also got a few other things that we need to work out, those higher order concerns around data sovereignty, data permissions.
We've also got the dynamic where most of the data processing for AI tools happens overseas. And so, we just need to think about some of the implications for that in terms of data sovereignty and what that means. But that doesn't mean there are not some tasks that AIs could do to really increase productivity.
I would say, in terms of AI, that as regulators, I think we need to be really mindful around how your customers or your regulated parties are using AI and what are the implications. So, it could be anything from how it changes their expectations around service levels or how it might change their expectations around how the guidance is tailored that they're receiving to a specific situation. And then, of course, you've got the more negative and harmful uses of AI, like in scam emails, fraudulent applications, et cetera.
I think we need to be mindful that criminals are some of the fastest adopters of technology. And as a regulator, you're trying to protect from harm. So, you need to make sure that you're uplifting your own capability to understand how your regulated parties or customers are using it both positively and negatively.
Okay. So, lots of ideas in there. Anything from you, Sarah, just briefly? Yes.
Thanks, Jeremy. Early in the webinar, I said that we need to do more of the doing part as regulators. I think when it comes to AI as regulators, we do need to do more of the thinking first before the doing, because there are a whole range of implications as regulators that we need to consider before safely and effectively rolling it out.
Like in Australia, the federal government and the state governments are putting out their own guidance in how to use AI. Two weeks ago, the Australian government released its whole-of-government AI plan, which essentially had three pillars, trust, peoples, and tools, and giving the tools to public servants to do their jobs safely and effectively. So, there are certainly guidance out there for regulators to do this, and there's also provision for regulators and agencies to create their own policies in addition to these national frameworks and the state-based frameworks to think about how AI can be safely and effectively implemented by regulators.
This includes their own policies. Where I see it working well from the regulators I've engaged with, where there's been effective engagement across staff, there's been capability-building development programmes and there's been trials in relation to AI, and really a clear objective and purpose to why AI should be used and can be used for the delivery of their regulatory functions. But that said, AI comes with its own challenges and impacts, and that includes the human impact and the environment impact.
So, in developing policies across regulators and departments, we need to ensure that we have regard to these elements to ensure a sustainable approach to AI in Australian regulators. Well, I was just reading about the Australian National AI Plan, Sarah, and I think I'd have to say it's the most comprehensive attempt by any Commonwealth government to embed AI into kind of the core machinery of state. And if I remember some of the scale and the timing, you're going to have 200,000 public servants having mandatory training by the end of the year, and by April, there's going to be a chief AI officer in every agency.
You know, I think it's going to be really interesting around what New Zealand can learn from this experience. Yeah, okay, that's some great thoughts there. We do have to move forward just because of time.
We did say earlier that we'll have questions, but what we will do in a minute is we will sort of wind up and those who need to leave can leave, but then for those who can stay, we'll just stay on for a couple of minutes just to answer a couple of those questions. But we have covered quite a bit of today from both sides of the Tasman, different expectations of regulators, regulatory stewardship, even a little bit of discussion there about AI in the end. We'll send out the slides, the links, which we have referenced in this webinar.
And yeah, so you probably see as well up there's when you registered for this webinar, you were able to note some of the areas that you're particularly working in. So there's a slide on that. So that's going to be useful for you just to see what some of the people said there.
Was there any particular thing out of that theme slide that really struck you? I was just surprised about the breadth of issues that are still, you know, given that this was for an audience for both Australia and New Zealand. It's not, nothing was a surprise. Sarah, was there anything on that list that was a bit of a surprise for you? No, no surprises there.
And I think, you know, we just, you know, spoke about, you know, those technology AI challenges. I think that's a big one for regulators across both sides of the Tasman. Yeah, cool.
So brilliant. So thank you very much. People can have a look at those slides later and digest them.
But just before we close off, and for those who need to go, and we stay on for those Q&A, I just want to do a quick shout out for, we've got another webinar coming up called AI Risk Management, How to Avoid Things Going Wrong. So pretty timely. So in that webinar, our AI expert, Adam Imarale, he's going to be taking you through a practical playbook for managing AI risks.
You'll learn five critical AI risks, our five-step incident response protocol, the safe checklist to stop errors before they happen, and how to build a no-blame culture where staff are comfortable raising concerns. So with everything going on in that space at the moment, that's a really, that's going to be a really good webinar to attend. So I encourage you to do that.
There's a button there. So thank you to everyone who came. If you need to leave now, just thank you.
But please do feel free to reach out. We're happy to talk to you again, and you can submit more questions, and perhaps we can also get back to you after it. But for those that are able to stay on the line, we've got a question from Jane, who asks, for those tips Charlene gave on considering cost cutting, what are your thoughts about the links back to capability? Yeah, I tend to think capability and operating model is quite intertwined.
So I actually think you don't need to do a little bit of a capability assessment. You know, you're thinking about what's your overall operating model. You're going to need to think about the blend of people capabilities.
There's also choices around whether things are outsourced, insourced. Do you need that capability 24-7? So I actually think it's intertwined. I'm glad you raised it, Jane, because I think whenever it comes to cost cutting, people don't think about the broader implications of what it might mean, because you've also got capability growth and the implications of, especially when you're dealing with staff who is left after the costs have been cut and the implications.
Yeah, absolutely. And you may want to comment on that, Sarah, but in particular as well, Jane also made a mention that she thought in the list about the focus areas that it was a bit surprised that regulatory burden hadn't been put in Australia's list. So you can comment about the capability and that point if you want.
Yeah, sure. Just in terms of the regulatory burden, it's always been a bit of a theme, hasn't it? I remember when I first started graduate year, there was a particular government stream focused on cutting regulatory burden. And the measure of success was counting the number of pages of regulation that you had cut from the regulation.
Now, I think we've come a long way from that, I suppose, metric of success. But I do think regulatory burden is still on the agenda. In reference to the ideas put forward by those Commonwealth regulators, it was certainly done in the frame of minimising burden upon regulated entities.
And of course, when regulators are making decisions, and the policy departments, they do have to have regard to a range of considerations. And that includes efficiency, cost implications on regulated entities or prospective regulated entities or the broader community. So it may not be in the title, but I do think regulatory burden continues to exist as a focus for government.
Cool. That's great. Helen also asked a question, which I think is a pretty pertinent one, which has to do with the regulatory frameworks.
And you've got the short term to's and fro's of political cycles in New Zealand. It's, you know, three years for sure. You know, is there a quick fix? How do we get around that? I don't know if it's a quick fix, but I suppose this is where regulatory stewardship, I think, really helps because it helps reinforce the long term health of the system.
So it can create a bit of a principle and a backstop and a bit of a narrative to kind of mitigate or to use as evidence when regulators are kind of being forced to shift the pendulum. But there is no quick fix. I do get that there is, you know, political priorities and different ways or expectations that different governments will expect regulators to behave.
But I guess on the positive, at least, it does feel in the last year, you talked about regulatory stewardship really bubbling up after over 10 years. It does feel like there's buy in, like it doesn't seem to be there trying to pull that apart. That feels like it's a pretty stable.
That's locked in. That's locked in. That is a positive.
Yeah, that's a great positive. That's great. I think we will wind it up there, but thank you everyone for calling in.
If you would like to talk to Sarah or Charlene, I think there's a button that you can just press and to initiate that. We'd love to hear from you and actually love to have more engagement. So please do.
I would encourage you to do that. And thank you so much for your time and look forward to seeing you at our next webinar.
