Objective and criteria for considering options
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Objective
Protecting young children is considered a high priority, as they are not able to take independent measures to protect themselves.
Completely eliminating any risks is likely to be impossible. Experience overseas shows that regulating window coverings has not eliminated deaths completely, but in some cases it has reduced deaths and improved outcomes. For example, following regulation, Australia’s death rate decreased from 0.20 to 0.16 per 100,000 children, and the Canadian death rate decreased from 0.08 to 0.04.
Consequently, the Government’s primary objective is to reduce deaths and injuries caused by corded window coverings, to the extent that it is practical and cost effective to do so.
Criteria
The Ministry of Business Innovation & Employment (MBIE) intends to utilise social cost benefit analysis to advise the government on the suitability of options. This enables systematic consideration of the costs and benefits of different options and ensures that these can be carefully weighed against each other. The Treasury has published guidance on social cost benefit analysis that details its rationale and assumptions. It is a standard approach used internationally to analyse and advise on product safety interventions. For example, social cost benefit analysis was recently used by the Australian Competition and Consumer Commission in recommending regulation of button batteries and devices containing button batteries.
Guide to Social Cost Benefit Analysis [PDF 607KB](external link) — New Zealand Treasury
Button battery safety: Final recommendation to the Minister [PDF 6.6MB](external link) — Australian Competition and Consumer Commission
Guide: CBAx Spreadsheet Model(external link) – New Zealand Treasury
The main criterion for analysing the options is, therefore, net benefit (expressed as a monetary value, potentially alongside unquantifiable components). The net benefit criterion takes into account:
- the effectiveness of the option at reducing injuries and death – noting the current estimate of the ‘statistical value of life’ is $5.8 million
- cost efficiency – costs to the industry, costs to government (including setting up new regulations, enforcement and ongoing work to keep regulations up to date) and consumers and society as a whole (including losses to consumers from needing to purchase more expensive products or losing access to products).
Other criteria, outside of aggregate costs and benefits, may also need to be considered as part of comparing cost benefit analysis typically does not consider distributional and equity (fairness) concerns. Based on information provided by the Coroner’s office from 2008, we are not aware that any particular group is disproportionately at risk. However, this is a topic that we are seeking further information on.
Obligations under international trade agreements such as the World Trade Organisation Agreement on Technical Barriers to Trade should also be considered when designing and assessing options. Following public consultation on the options, MBIE will work through the necessary processes and will provide advice on any implications for our international obligations. Regulatory options should align with existing international standards, where possible.
MBIE is seeking feedback on the proposed approach of net benefit as a key criterion, the elements that need to be taken into consideration to inform this analysis and any other criteria that may need to be considered.
Questions
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