New Zealand wants the driverless cars to practise here first

David Seymour wants companies developing driverless cars, heavy agricultural drones, artificial intelligence, cultivated food and new medical treatments to look at New Zealand and see somewhere they can try things. His proposal, announced in Christchurch this week, is for permanent “Innovation Trials” that would allow selected rules to be suspended for a limited time, in a defined place, while the technology and the regulation around it are tested together.

The less exciting name for this is a regulatory sandbox. Companies are allowed to test a new product or service under close supervision without immediately complying with every rule designed for the old version of the industry. Regulators get to watch what happens in real conditions, gather evidence and decide whether the wider rules should change, while the company gets a pathway that is faster than waiting several years for legislation to catch up.

New Zealand is already doing a version of this in finance. The Financial Markets Authority launched a fintech sandbox with six initial participants, and expanded the programme this year to support more firms exploring new financial services and market technology. The Ministry for Regulation has also published guidance explaining how government agencies can design and oversee sandboxes without treating them as a free pass.

Seymour’s idea is to make that approach a standing offer across more industries, rather than something arranged only after a determined company has spent months finding the right minister, agency and legal mechanism. He described it as a “front door for innovation, not a back door”, with clear application requirements and set timelines for companies wanting to test here.

There is a strong case for it. Technology changes in months while regulation can take years, and businesses working on unfamiliar products are often asked to comply with rules written for machines, services or risks that no longer look the same. Seymour used agricultural drones as an example, arguing that heavier drones useful for farm work face a certification process that can cost thousands of dollars and take more than a year, while a proposed trial was placed into a two-year work programme. By the time the process catches up, the equipment being discussed may already be old.

He also recounted a conversation with Uber about bringing autonomous vehicles to New Zealand. According to Seymour, the company’s response was that it would not be testing only the car here, but the New Zealand Government’s ability to deal with it. That is a brutal little summary of the problem, because emerging technology does not arrive alone. It arrives carrying questions for transport rules, insurance, privacy, safety, employment, public space and who becomes responsible when the machine does something nobody expected.

The opportunity is obvious. A country that can move faster may attract companies, investment and skilled work that would otherwise land somewhere larger. New Zealand could also gain earlier access to useful technology in agriculture, medicine, transport and food production, while local regulators learn from real evidence instead of trying to anticipate every consequence from a meeting room.

The risk is equally obvious. “We are a great place to test things” sounds much better in an investment presentation than it does to the person living beside the test road, eating the test food or handing over health data during the test clinical programme. Relaxing a rule cannot mean relaxing the obligation to explain what is happening, who carries the risk and what the public receives in return.

The Ministry for Regulation’s own guidance says a sandbox should be structured, supervised and used to learn, rather than treated as a promise that the rules will eventually be removed. That distinction is important. A trial should let a company prove its case, but it should also allow the country to decide the idea does not work, or that the cost lands too heavily on everyone except the company. A regulatory sandbox is meant to be safe to try, not impossible to stop.

New Zealand’s size could help here. A trial can be limited to particular roads, farms, clinics or regions, with clear measures and a regulator watching closely enough to learn something useful. The advantage is not that fewer people will notice when things go wrong. It is that a smaller system should be able to bring the company, regulator, researchers and affected community into the same conversation before the test begins.

There is a version of this idea where New Zealand becomes quicker, more confident and better at turning new technology into something people can actually use. There is another version where overseas companies arrive for an easier regulatory ride, collect what they need and leave before the public sees much of the upside.

The difference will be in the rules around the rule-breaking. The first autonomous car can turn up, but someone from the regulator should probably be sitting in the passenger seat, taking notes.