NSW runs AI over legislation to find reform opportunities

The NSW government has run an artificial intelligence tool from Deloitte over all 89,000 sections of legislation across the state to identify opportunities for reform. 

NSW Treasury revealed its use of the RegExplorer tool in a new report highlighting opportunities to “reduce regulatory burden by removing unnecessary compliance functions”.

RegExplorer - or Reg X - uses AI and text analysis software to “help regulators better target where legislation is not fit-for-purpose”.

It was used to assess public information from the NSW legislation website in May 2020, much like it has previously done in Canada and the United States.

The report [pdf], Regulating for NSW’s Future, reveals that seven percent - or 6139 of the 88,704 sections of NSW regulation have not been edited since they were originally created.

A further four percent - or 3893 sections - have only been edited on one occasion since they were introduced, while five percent have not been edited in the past decade.

The tool also found that the average age of a piece of regulation was 22 years and that regulation would be edited 104 times on average during its life.

In addition to identifying stagnant legislation, the tool was also used to “identify sections of regulation that contain language that could be considered outdated or onerous”.

“It can highlight sections that contain prescriptive language, require burdensome activities for compliance or reference technologies that we no longer use, the report states.

“Regulators can then review these sections and assess if they should be modernised, more principles-based or less onerous.”

Around 37 percent of all sections in NSW regulation were found to contain prescriptive language such as the terms shall, must or ought.

NSW legislation was also found to reference a myriad of references to obsolete technologies such as facsimile (350), fax (76), telegram (27), telex (23) and cassette (19).

“Rethinking where compliance could be made easier could help to reduce the regulatory load on businesses and consumers as well as lightening the administrative burden for regulators,” the report states. 

“This can involve moving away from paper-based activities such as certifying or posting physical documents.”

NSW Treasury suggests that even a small improvement to the regulatory framework, by culling outdated laws and streamlining regulation, can drive significant economic benefits. 

For instance, a five percent saving translates to between $0.6 billion and $4 billion in net benefit - or around a quarter of NSW government spending on education in 2018-19.

“In the same way that AI and advanced analytics are revolutionising sectors like agriculture by helping to optimise yields, they can also be used to help fast-track the process of regulatory reform,” the report states.

“Being able to identify where regulation is restrictive or especially burdensome helps regulators target laws that are not fit-for-purpose.

“This, in turn, accelerates regulatory improvements, driving long-term benefits for the NSW government, businesses and residents more broadly.”

As highlighted by COVID-19, regulators are struggling to keep pace with the speed of change and are increasingly looking to “outcomes-focused and technology neutral” regulation.

“Regulation that is outcomes-focused and technology neutral provides flexibility for regulators to frame regulation in terms of outcome, not just prescriptive obligations around processes,” the report states.

“This can allow businesses to freely adopt whatever technology is most appropriate to achieve the outcomes.

“Outcomes-based regulation can provide the flexibility for businesses to innovate, adopt and realise the potential of emerging technologies, without having to seek permission from regulators.”