Thursday, 31 May 2018


New Zealand likes to portray itself as a small and nimble trading nation, with its own will when it comes to foreign policy, and doing deals in our nation's self-interest. According to the narrative, we are the plucky nation at the end of the world, determinedly making our way in an increasingly turbulent environment, always "punching above our weight" (as that simply ghastly phrase goes), never afraid to say what we mean, and prepared to stand up for it. It has a whiff of naive innocence and old-fashioned derring-do about it, which, although endearing, is simply not true.

No, our country has an unerring ability to put all our eggs in one basket, and then wonder why things do not turn out quite as expected. When Britain announced in 1959 that it wanted to join the then European Economic Community, we were the country that refused to believe it was happening, despite the nearly 15 years that were to pass before Britain eventually joined Europe in 1973. And when the penny slowly dropped and reality dawned, we spent the latter half of the 1960s and the early 1970s trying to negotiate special annual access deals for our agricultural exports. (The ultimate futility of this approach - the so-called New Zealand "Special Case" - was put into perspective for me once in Ireland when a particularly hostile Agriculture Minister told me that if I could convince  the farmers in his largely rural constituency that they should sacrifice some of their prosperity to protect the interests of farmers 12,000 miles away, then he would back New Zealand's case in Brussels.)

After Britain joined the EEC, we tried to diversify markets and latched upon Iran as a likely trading partner, on a "dairy for oil" basis, only to have that blown out of the water by the 1973 and 1979 Oil Shocks, and the overthrow of our then new best friend, the Shah. Then  we lurched on to "dairy for Ladas" deals with the old Soviet Union, only to have those deals crumble as the Soviet Union disintegrated.

Now, we have discovered China, concluding about ten years ago the first free trade China has made with any country. Bilateral relations between the two countries have become extremely close, to the worrying extent that other traditional partners are now showing concern that our ties to the world's largest nation are making us somewhat of a soft "underbelly".

The problem is that in pursuing a strong economic relationship with China, which is very good for our exporters and economic prosperity, we have inevitably sacrificed some of our soul. For example, China is one of the world's leading death-penalty states, yet allegedly fearless, human rights upholding New Zealand stays "relentlessly" silent on the frequency with which China executes its citizens, for paralysed fear of upsetting her.

And the appalling way we treat Taiwan - one of the strongest democracies in the region, and a stark contrast to China in this regard - is a long-standing national disgrace. It is absolutely proper for China to assert that Taiwan is not an independent country, but a renegade province and inalienable part of China, that they, by peaceful means, wish to recover. But that is an issue between China and Taiwan. Other countries are free to make up their own minds. It is not right for China to bully other nations to see the issue the way it does, and to expect those nations to comply, because China says so. Here is the rank hypocrisy: although Taiwan has formal diplomatic relations with only a small and diminishing group of countries, virtually every country, including plucky, brave independent New Zealand, maintains extensive backdoor quasi diplomatic relations with Taiwan, and in reality treats it as a de facto, separate country from China, but dares not say so.

Yet, in a rare brave move on the trade front, New Zealand did conclude a free trade agreement with Taiwan during the term of the previous government, but it now needs to back that up with some political bravery to give even a shred of substance to the romantic story we like to tell about ourselves.

The Chinese basket may be the biggest yet, but the eggs within it are just as breakable as those we have put in other baskets over the years. Sadly, we seem unwilling to learn any lessons from the last 50 years or so, and so appear pig-headedly destined to repeat all the same mistakes, and suffer the same mishaps, all over again.      


Wednesday, 23 May 2018


Suggestions that the Government wants to bring forward the timing of the referendum on recreational cannabis make good political sense. The current plan to hold the referendum at the same time as the next General Election makes sense from a costs point of view, but has the potential to be a political disaster for all concerned. It would be inevitable in such circumstances that the election campaign would be dominated by the cannabis referendum, something none of the political parties would want.

So, getting some agreement across party lines to bring forward the date should not be too difficult to achieve. A postal vote late next year appeals as a likely best option, but it will not be as simple as that. Resolving the logistics of the timing of the referendum is but chickenfeed, compared to what the referendum will actually be about, and how, in the event of an affirmative vote, the outcome will be implemented.

The Justice Minister has already referred to the need for voters to be properly informed so they can cast a quality vote in the referendum. Some form of independent, properly resourced, expert panel will obviously be required to ensure all the relevant information is put before voters in a credible and dispassionate way. Ideally, the panel should run for some time before the referendum to give as many people as possible the opportunity to interact with it. But this is not an impossible task.

The bigger issues relate to the type of regulatory regime proposed for cannabis, should the voters say yes. Ironically, the way we treat tobacco might be the way forward. Tobacco products are sold in a heavily regulated market, with no advertising or promotion permitted, and sales restricted to those over the age of 18, with heavy Government taxes applied. At the same time, the domestic cultivation of tobacco plants is permitted, but those plants can only be for personal use, and any form of supply to others is a criminal offence.

If the Government is thinking along these lines, then the referendum will need to be designed to reflect this, so the public can be absolutely clear what they are being asked to vote upon. If the Government has another regime in mind, then it will need to present that to the public with equal specificity. The worst thing the Government could do would be to have a simple yes/no option on the ballot paper. All that would ensure is that the balance of this term of Parliament, and probably the next election campaign, would be spent arguing about how the recreational use of cannabis was to be organised - the very thing the Government seems to be wanting to avoid by thinking of bringing the referendum forward.

The best way ahead for the Government would be to follow the example of the 1993 MMP referendum. In that case, the new regime was put in place by legislation passed by Parliament before the referendum, and which was only triggered by a positive vote in the referendum, meaning that MMP could be introduced for the 1996 election. Under a similar scenario, the new regulatory regime for recreational cannabis would come into effect once the referendum voted yes, taking the issue off the 2020 election agenda.

To get to this point, however, will require a great deal of very considered and precise work by the Ministries of Justice and Health, and a Bill to be in Parliament within the next three months or so, and passed by early next year, so that the regulatory regime and the public information panel can be established in time for a postal vote in - say - November, (bearing in mind that the August-October period will be dominated by the local body election campaign).

Right now, both Justice and Health seem to have many other priorities than cannabis, so all this seems very unlikely. And the Minister responsible has already said no meaningful progress is likely before a budget allocation next year so, sadly, the risk of a botched referendum seems much more likely, and with it more uncertainty, which will raise suspicion that Labour and New Zealand First are colluding to just play games with the Greens on this issue. The one certainty, however, is that whatever the process and timetable from here, and whatever the outcome of the referendum whenever and however it is held, cannabis related issues are not going to slip off the political landscape any time soon.
    
       


Thursday, 17 May 2018


Grant Robertson says it is a "Rebuild Budget"; Simon Bridges says it is a "Tax and spend, borrow and hope" Budget. But both would they say that, would they not?

In reality, this Budget is neither as positive as the Minister has painted it, nor as negative as the Opposition claims. It looks to be a cautious and fiscally prudent document, which maintains but does not accelerate significantly the new expenditure track of the previous Government in health and education; allows through reprioritisation of existing spending the introduction of some of the Coalition Government's new programmes; and reduces the overall level of debt to below 20%.

Where the Budget has not been able to deliver expected policies - like the $10 per visit reduction in the cost of going to the Doctor - it makes it clear that the policy will be achieved over the balance of the Government's term. While conservative, given the overall fiscal position, the staging of commitments is a good step forward, especially since too often in the past commitments shelved one year by successive Labour and National Governments have often disappeared altogether.

Despite the Opposition's concern about more borrowing, the real questions over this Budget arise not from its economics - the Minister has made a good fist of balancing the numbers and projecting surpluses into the future - but with the politics.

While Mr Robertson wins plaudits for making clear what was not done in this Budget will be done in the next before the 2020 election, he has at the same time tied himself firmly into a straightjacket. He now has no alternative but to honour those commitments. While many will welcome that, there are some potential negatives.

First, his straightjacket means that, in implementing these commitments, he has left himself little to no headroom for anything that might emerge in the future. Put simply, Labour has played all its big cards in its first year - today - and the next two Budgets will be about implementing the details. Knowing the Government's hand this early leaves the Opposition plenty of scope to develop attractive alternative policies over the next two years. And it makes life a little more awkward for New Zealand First and the Greens. Their trophies are now pretty much in the cupboard, leaving them with the perennial support party problem of relevance between now and the next election. And Labour needs both of them to make it over the electoral line in 2020 to remain the Government.

Second, there is a heavy reliance on the domestic and international economies continuing to perform well over the next two years. Even the notoriously and inveterately overly optimistic Treasury forecasts show there is little headroom should things falter on the home front, let alone there be an international (erratic America-first Trump-induced?) economic correction before 2020. In that event, the Government could be left high and dry with a less than half completed programme and no good news to show in its election-year Budget.

And then there is the reaction of the traditional Labour leaning groups like the teachers and the nurses. It is clear that the significant pay increases they were expecting as their payback for loyal support over the years are not among the new education and health spending in the Budget. Already both are making noises about this. So will the nursing and teaching unions rest quietly, and settle for jam tomorrow, in potentially uncertain times, or will they demand their slice of the pie now? According to their own narrative, they were held back so much during the nine years of the National-led Government, so they seem unlikely to be quiet now "their" party is in power.

This essentially stand-pat Budget certainly passes the good management and solid accounting tests, and the Government will be clearly (if vainly) hoping that, in the absence of any coherent economic growth strategy, this "reliable hand on the tiller" approach will assuage some of the concerns of the business community and stem the erosion of confidence. It probably will not do that, because the leading business and employer groups have now become just as stridently partisan as the unions they criticise. The Government will calculate that business has therefore painted itself into a corner, so probably will not be too bothered by the criticisms.

Of more concern will be the fear that the Budget may fail to satisfy the many who voted Labour last year believing the new Government would do all the things it promised in an immediate new wave of Savage-like compassion and commitment. If they feel that instead they have ended up getting a Budget pretty much the same as they could have expected from National, Labour has a problem.

Grant Robertson says this Budget is but the foretaste of what is to come in 2019 and 2020. Given that and the unreal expectations he and his colleagues let build up for this Budget, he could be dangerously tempting fate for the next two!

You can now also read my new weekly political column for Newsroom at www.newsroom.co.nz

Wednesday, 9 May 2018


Twenty-seven years ago I introduced to Parliament what was then - and probably still is - the largest ever Private Member's Bill - the Information Privacy Bill. It drew heavily on work I had begun as Associate Minister of Justice in the previous Labour Government. The Bill was followed a few hurried and embarrassed weeks later by the National Government's own effort, the Privacy of Information Bill, which bore a remarkable, if not identical resemblance to my own Bill! Both Bills eventually morphed to become what we know now as the Privacy Act. This was passed twenty-five years ago, and this week, Privacy Week, is an occasion to celebrate that, and to consider where we need to go with Privacy law in the future.

Of course, a huge amount has changed in the last few years, let alone the last twenty-five years. When we were first looking at the issue in the late 1980s and early 1990s the principal focus was on ensuring that people's privacy was protected from their being included unknowingly on various corporate mailing lists - Readers' Digest was cited frequently as the main offender - and ensuring that they could get off those lists and stop the flood of unsolicited mail. Today, of course, the scope is much wider as there is more collection of data by Government agencies, and that data is shared with and by a wide variety of organisations, for often beneficial, but no means exclusively so, purposes. On top of that, have been the activities of social media entities like Facebook, and more notoriously recently Cambridge Analytica, which have taken the issue to an entirely different level. Just as communications and technological advances have now rendered national boundaries obsolete, so too and even more so in the data world. It is pervasive and constant, a far cry from the occasional unwelcome and incredible offer from an international mailing company. Little wonder, then, that the Government has recently introduced legislation to modify and upgrade the original Privacy Act.

Earlier this week, the Office of the Privacy Commissioner released some sobering figures regarding how New Zealanders feel about the way their data is being treated. Its latest annual survey shows more than two-thirds of New Zealanders are concerned about their individual privacy, and that that figure has been rising over recent years. Perhaps not a surprise given recent widely reported data breaches here and elsewhere. Of more concern, though, at a time when more and more of citizens' transactions with Government take place on  line, and New Zealand is recognised as one of the most digitally advanced countries in the world, confidence in the Government's ability to handle individual citizens' data securely has fallen sharply over the last five years. Yet during these years, Government practice with regard to the handling of individual data has improved dramatically. But the test here is a simple one - it is not the actuality of what is happening that matters, but the perception of it. Put simply, if people feel their data is less safe with the Government, they will become far less inclined to comply with data gathering and sharing requirements, which will in turn defeat the purpose and efficiency of greater data use and sharing to improve the delivery of public services.

There are some stark lessons here for the Government, whatever its political hue. They will be ignored at their peril. Governments can only move in this space to the extent they have the public's confidence and endorsement. So, a major part of any Government's effort in the digital transformation space has to be about getting and keeping the public on-side. The Privacy Commissioner's survey results, although mildly encouraging overall, sound the timely reminder that there is still some way to go.

When the original Act was passed in 1993, it was launched in a vacuum. Inexplicably, given the nature of the reform, the Government then did nothing to explain what the Act was about. Consequently, incredibly cautious, risk-averse middle ranking bureaucrats in both central and local government were left to fill the spaces, leading to many bizarre and downright silly rulings and new procedures that risked severely quickly bringing the whole Act into disrepute and ridicule. So, whatever the outcome of the current Bill, I strongly plead that the Privacy Commissioner is given the resources and the time to explain what it will and will not do, so that it can become an effective protection of individual privacy from the day it comes into effect. In this fast-moving space, that is not just a pious wish, but an absolute necessity.                   


Wednesday, 2 May 2018


The National Party has been looking increasingly awkward in recent weeks while the Labour-led Government has been rolling out major policy announcements.

Its criticisms seem to oscillate between attacking the proposals themselves, but then saying that they are either really a reiteration of National policies already underway, or things it was planning to do anyway. While there is some evidence these claims are valid (which, after all, should not be surprising, given that National has just finished nine years in office) the consequence is that they leave National's current criticisms looking a little hamstrung, and the Opposition appearing somewhat kneejerk in its response. None of which inspires confidence at this early stage in National's ability to lead a government in 2020, or whenever the next election occurs.

Of, course it is not quite as simple as that and it would be foolishly premature to start making election predictions at this early stage when there are yet almost two and a half years to run before the next scheduled election. (The last election alone showed that predictions made just six weeks before election day can be blown away by changing circumstances!) Nevertheless, the suspicion is strong that Labour will not be too unhappy at National's present approach. After all, it is getting to implement its policies, and the lament "we were already doing that, or were planning to do it anyway" is neither telling nor withering. It might have more impact if it were being pointed out by the media, as would be appropriate, but, overall, most of the media is still too much in the Prime Minister's thrall for that to be happening yet.

So the challenge for National is to work out what to do. On the positive side is the polling position - still heavily in National's favour. Following the general assumption that Governments lose support from the day they take office, it is likely that Labour will never be more popular than it is today - several percentage points behind National. While a good morale booster for National, there is still the daunting reality that National lacks reliable support partners, and that New Zealand First and the Greens are keeping Labour's head just above the water at this stage, and could do so again after 2020, even if Labour falls. That probably means National's best shot at governing, in the absence of a new partner emerging, will be as a single party majority Government, something that has not happened thus far under MMP. In turn, that means ensuring that neither New Zealand First nor the Greens make it to the next Parliament, which also means alienating any potential support from those parties in the meantime.

All this is a very tall order, and will not become even a possibility, given the way National is operating presently. So, what to do?

Well, under this scenario, the flagship policies of the support partners become the real targets, and the day-to-day policies of the Labour Party less important. As befits its historic rural and provincial base, National needs to reclaim its brand as the party of the regions. That will require a full-frontal attack on New Zealand First and the Provincial Growth Fund, not so much the Fund itself, because the idea of a dedicated Provincial Growth Fund is popular in rural and provincial quarters, but more because of the cavalier, overbearing, overly partisan, pork-barrelling way it is being driven by Minister Shane Jones. There is already plenty of scope there, with Minister Jones' enormous, cocky self-belief certainly likely to add to that dramatically before the term is out!

The second area of opportunity for National is environmental policy. There is a strong blue-green element in National, predominantly urban and young, and there are many opportunities for National to appear as the responsible Greens in this regard. However, for some of its MPs, a tectonic plate like shift in attitude will be required. For example, for many urban voters, in Auckland particularly, the promise of light rail as one of our transport solutions has appeal. Dismissing it the way some National MPs seem routinely to do as just "trams" simply brands them as backward looking and ignorant. But, with the Prime Minister seemingly bent on yielding to all of the Greens' environmental wish lists, even at the expense of some of her own key policies like cutting the cost of a visit to the doctor by $10, the likelihood of the Government going too far, too fast is high, further enhancing the opportunity for a more considered blue-green approach from National.

To be successful, National needs to become a nimble and strategic Opposition, spelling out a clear alternative message to voters. Although change will not happen overnight, it will not happen at all if it lapses into Opposition for the sake of it, as looks the case at present.