Just three weeks ago the Minister of Local Government received the interim report of the Future for Local Government Review which the government had earlier commissioned.

Predictably, she welcomed the report the way Ministers usually do, with the standard statement of warm platitudes and pious hopes about what it might lead to for the future.

She said, “Our system of local democracy and governance needs to evolve to be fit for the future. New Zealand is changing and growing, and there are some significant challenges presenting … with issues like COVID-19, future population growth, and climate change.” All very worthy, and hard to disagree with.

The Minister then went on to say, “… local authorities can be innovative and collaborative, and there is a breadth of opportunities for local government and the role it can play in contributing to the wellbeing of all of us living in Aotearoa.” She concluded that “local democracy is vital to the fabric of New Zealand society” and that the report “… is a starting point for strengthening our local democratic participation, empowering communities to have a voice in local decision-making, more collaboration between central and local government.”

A casual observer might have been forgiven for taking from those remarks that the government was genuinely looking to achieve the partnership that all governments say they want with local government but rarely achieve, and that her words could be believed. However, actions she and her government have taken since then show not only that the government no interest in working constructively with local government, but also that the Minister’s words were no more than waffling poppycock that cannot be taken seriously.

Barely ten days later the Minister of Housing stood at the same “podium of truth” with collaborators from the National Party to announce mutually agreed new housing development plans, which cut right across the current district and local plans of many Councils up and down the country. From the reaction of a number of Mayors it was clear they had little knowledge or warning of what was coming, even though they are now the ones expected to pick up the pieces to make this joint Labour/National declaration work.

There was nothing in the two old parties’ proclamation about “strengthening our local democratic participation” or “empowering communities to have a voice in local decision-making” as per the Minister of Local Government a few days earlier, even though she would have known at the time what was being planned. To rub salt into the wound, the joint statement from the old parties made it clear that they would be moving quickly to legislate their decisions into place.

Local government, already wary from numerous past experiences over many years of engaging with central government, would have seen this as one more reason why Wellington cannot be trusted, no matter who is in power there. The Minister of Local Government, so soothing and pious when the Future for Local Government Review report was presented, was nowhere to be seen – or heard.

But this was only the start. What fluttering shreds remained of her credibility were completely ripped away by her announcement yesterday that the controversial Three Waters reforms, which have divided local government, will proceed. In making the announcement there was no reference to the “local democracy”, “opportunities for local government” or strengthening “local democratic participation” and “empowering communities” that the Minister seemed so fond of when the Future for Local Government Review was released.

Her rationale for proceeding with the Three Waters reforms was no more than “they may not be popular, but they are necessary.” Such a glib statement is no justification for one of the most controversial asset steals of recent times, aside from the implicit but untested assumption that central government knows best how to manage water resources.

Now, there is little doubt that the management of water resources in New Zealand does require a shake-up, but it remains highly questionable whether placing everything under centralised state control is the best way of achieving change. Big centralised, government-controlled agencies have not always worked well in the past and local government clearly thinks a state monopoly will not work in this instance either, but its views might be tainted by vested interest so also need to be treated with some caution. The group with the biggest stake of all in the management of water resources – local communities – have not yet been consulted at all at this stage, so it is unclear what they think of the idea.

The obvious opportunity for hearing what the public – or at least the portion of it that bothers to vote – thinks will be at the next local government elections now less than a year away. But the last thing the Minister of Local Government and her colleagues want is the local body elections to become a referendum on the Three Waters plans, hence the decision to proceed at this point.

The unfortunate reality is, as with the housing changes also, that central government holds all the cards. Local democracy, it would seem, is fine but only up to a point, The clear message from both the housing and Three Waters changes is that when it comes to the big decisions, central government will do what it wants, regardless of other views. Local councils and people can talk and rage all they like about what is happening, but it is effectively too late once the major decisions have been made.

The same pattern is being demonstrated with the health reforms and many aspects of the Covid19 response where the default position has been throughout that everything must be controlled by the government. One has only to look at the cumbersome, incompetent, unfair, callous, and unworkable MIQ system or the ineffectual sealing of internal borders to see how good this government is at running things!

So, where does all this leave the Minister of Local Government? She has single-handedly torn up her credibility over the last three weeks. She now risks becoming the modern embodiment of Alice in Wonderland’s Mad Hatter: “When I use a word… it means just what I choose it to mean – neither more nor less.” 

Given that she is also the Minister of Foreign Affairs, and there are difficult emerging foreign policy issues ahead where the precision, clarity, certainty, and veracity of words will matter, a Mad Hatter making it up as they go along is the last thing we need.

     

 The Labour-led Government must be rubbing its hands with glee after the announcement earlier this week of its housing deal with the National Party. In one fell swoop it has effectively both taken increasing housing availability and affordability – issues the government was becoming increasingly vulnerable on – off the political agenda, as well as burying the spectre of its own much-ridiculed Kiwibuild programme. 

Kiwibuild spectacularly failed to achieve the overly ambitious target Labour set for it of 10,000 new affordable homes a year for ten years. However, undaunted by the past, this week’s agreement is holding out the even bolder prospect of 105,000 new homes in just the next five years. And, if this plan fails, the responsibility will be shared equally between the two old parties who devised it. In the meantime, for that reason, neither will have any incentive to criticise the other over it, meaning housing provision has effectively been removed from the short to medium political agenda. 

The pressures on both Labour and National to make this agreement work are strong, but not identical. For Labour, this deal is a chance to recover some momentum in the housing field, given the failure of Kiwibuild, runaway housing prices showing little real sign of slowing significantly despite various government tax changes and the Reserve Bank tightening lending rules, and steadily rising homelessness rates. For National, it is much more a case of being taken seriously once more, important for its own credibility and relevance as more and more of its supporters appear to be defecting to ACT. 

The importance of this deal to both parties is underscored by its coming as a surprise to Labour’s support partner the Greens, and the Mayors of major cities whose own housing development plans have now been undercut. As might be expected though, the Labour Mayor of Auckland, while complaining that he was not aware of the agreement before it was announced, sycophantically immediately threw his support behind it before he had even seen the details. The Mayor of Wellington was grumpy that this new plan cut right across his own Council’s still being finalised intensification strategy. But since the Wellington City Council’s plan looked set to sacrifice the heritage aspect of many Wellington suburbs to multi-storey neo-Stalinist apartment blocks, the National/Labour agreement curtailing that lunacy may be no bad thing. 

Leaving aside a measure of cynicism that this week’s agreement will in fact amount to much, given the number of national and local elections and possible outcomes over the next five to ten years, there are nevertheless a number of concerns about what appears to have been agreed. The emphasis on building more homes is an understandable public policy priority at present. However, the intention to gut the Resource Management Act and the good planning and environmental safeguards it has ensured is likely to be regretted over time. 

The rush to free up urban land to enable developers to build up to three three–storey dwellings on existing sections on a non-consented basis has serious implications. Not only is it effectively an open invitation to developers and speculators to do what they like, it has the potential, as a consequence, to further escalate house prices, as well as changing the character of many of our suburbs forever. The appeal of quiet suburban streets giving way to more and more apartment blocks side-by-side, with more cars parked on the streets, and less playing space for children where once were homes, lawns and gardens is likely to be short-lived. 

Yet this is the future Labour and National are effectively signing us up for. While New Zealanders are concerned about housing and do want to see real moves to improve both affordability and accessibility, it is doubtful that too many will, over time, favour the fundamental change in the nature and form of our major cities, let alone the consequential lifestyle changes, the new Labour/National plan will engender. In that regard, it is extremely disturbing that such a major potential change to our way of life was developed by the two parties, effectively in secret, without any public or local body consultation. 

While the inherent collectivism of close-quartered, multi-storey living, with little private external recreational space for people to develop as their own (a breeding ground for airborne viruses like Covid19 if ever there was one), might be closer to Labour’s ideological heart, it runs contrary to National’s historic policy of promoting a property-owning democracy, with its implicit commitment to land, space and opportunity. 

If one of the intentions, from Labour’s perspective at least, and now by implication it would seems National’s as well, of this policy is to create greater equality by eliminating over time the diversity of our suburbs, it is almost certainly doomed to failure. Indeed, it is likely to have the opposite effect – currently attractive suburbs are likely to become even more so, thus pushing up their prices, and thereby dragging up prices throughout the rest of the housing market. The only long-term winners are likely to be the speculators and developers whose eagerness over many years to get rid of the Resource Management Act should have been a warning to be noted, rather than embraced the way it now has been. 

For Labour, though, none of this apparently matters. By the time these new policies reach absolute fruition, if ever they do, their time in government will most likely have passed, so the consequences will no longer be their responsibility. In getting National on-side with these plans, Labour has not only removed a currently ongoing contentious issue from immediate debate, but in so doing has once more snookered National. 

It is a further sign that politics has always been at the forefront of this government’s agenda.

 

This week marks the 25^th anniversary of the New Zealand’s first MMP election. Over the last quarter century, the MMP electoral system has led to our Parliament becoming more socially and ethnically diverse, more gender balanced, and to a wider spread of political opinion gaining representation. Or, as one of my former colleagues observed somewhat ruefully at the time, Parliament starting to look a little more like the rest of New Zealand. 

As we celebrate that milestone, it is worth noting that – contrary to the dire predictions of some of MMP’s original opponents – the arrival of multi-party governments has maintained political stability and broad policy continuity. The various political parties in government over that time have quickly developed the modus operandi to make that work, and while there have been differences within governments, there has rarely been the instance of the small party tail wagging the large party dog the way some feared would be the case. 

But rather than strengthen the positive features the MMP system has brought to our system of government, the current government is currently considering a measure that will limit the ability of smaller parties to gain and retain representation in the future. It has established an independent electoral review to look at, amongst other measures, changing the threshold for representation in a way that could have a detrimental impact on small parties, Te Pati Māori, in particular. 

The 1986 Royal Commission that proposed our MMP system originally recommended that the party vote threshold (the minimum vote required to gain party list seats) be set at 4%, or, if a party won an electorate seat, for all its party votes to count, regardless of whether they reached the 4% threshold. In effect, that meant a party winning one seat needed about 1.2% of the party vote to win its first list seat. 

At the time, Parliament’s then two-party Labour-National club decided that the Royal Commission’s recommendations were too generous and might lead to an unacceptable proliferation of new and small parties in Parliament which could be destabilising for democracy (in other words, a threat to their monopoly). So, together, they increased the Royal Commission’s recommended threshold to 5%, but left the one-seat rule untouched because both thought it unlikely many, if any, parties would gain representation this way. 

By and large, they have been right. Outside the Māori seats, where special dynamics have applied, since the advent of MMP only 5 general seats have elected Members from outside either Labour or National. In the current Parliament only one general seat and one Māori seat have non-Labour or National Members. Moreover, on only three occasions (the Progressive Party in 2002, UnitedFuture in 2005 and Te Pati Māori in 2014) have parties with Members elected via the one-seat threshold been part of governing arrangements, and even then the total number of Members elected this way over those three instances was just 4. On three other occasions (New Zealand First in 1999, ACT in 2005 and Te Pati Māori in 2020) a total of 5 Members have been elected via the one-seat rule, but they were not part of governing arrangements at the time. 

Whichever way one looks at it, the impact of the one-seat threshold has been limited. In the three instances where it played a role in government formation, the lead party of government (Labour in 2002 and 2005 and National in 2014) would likely have remained in office, regardless of the application of that threshold. That says the pejorative argument that parties, large and small, have been using the one-seat rule to manipulate government formation has little real weight. 

At the same time, what is clear, though, is that the one-seat rule has helped small parties get representation, but without significant distortion to the overall make-up of Parliament. (The biggest number of Members at any one time elected via the one-seat rule was 3 New Zealand First MPs in 1999.) 

If the independent review upholds the government’s previously stated policy intent to abolish the one-seat rule from 2026 it will also need to recommend a substantial reduction in the party vote threshold to compensate for the impact on small parties. Current thinking seems to be to revert to the 4% proposal of the Royal Commission, but, effectively, without the one-seat rule, this would still leave the representation barrier higher than the Royal Commission thought desirable. 

If the one-seat rule is abolished, a fairer and more realistic party vote threshold would be in the region of 2% to 3%, but the chances of that happening are remote. For its part, National has already said it will oppose any reduction in the party-vote threshold, but its position on the one-seat rule is more ambiguous. The worst outcome – but the one Labour and National have historically inclined to – would be keeping the party vote threshold at 5% and abolishing the one-seat rule. 

That would suit their common self-interest very well but would be bad for democracy overall. It would further limit the already difficult prospects new and emerging parties face to gain representation and would have a particular impact on Te Pati Māori. Were the one-seat rule to be abolished, as things currently stand, Te Pati Māori would lose its solitary list seat. Moreover, as its power base is concentrated in the Māori seats, its prospects of reaching the 5% of the total vote threshold will always be much more difficult than for other parties. For that reason, there is a case for considering a lower party vote threshold for Māori-based parties, although that would be extremely difficult to institute in practice and would almost certainly be divisive, so is unlikely. 

There is a fundamental principle at stake here which is in danger of being overlooked. The basic role of the electoral system is to provide a fair process for the election of our Parliament. An inherent part of that is ensuring that the system is so designed to enable the widest possible expression of political opinion, which is more than just looking after Labour and National. Provisions that unreasonably restrict or marginalise that opportunity should be rejected. Instead, within the confines of the system, the focus should always be on enhancing and promoting the opportunities for political expression and representation, not limiting them. Were that principle to be applied to the current consideration of electoral law changes, the fixation to do away with one-seat rule would be immediately and solidly rejected.

 

 

As debate has intensified over the last year or so about the procurement of New Zealand’s Covid19 vaccines I have become increasingly puzzled by the apparent absence of Pharmac from the process. 

Pharmac is, after all, the government’s specialist agency for purchasing the range of medicines that the country needs. Over the years, it has built up a solid reputation as a tough and shrewd negotiator, well able to do the best deals possible for the New Zealand taxpayer. In the process, it has become distinctly unliked by international pharmaceutical companies, but nevertheless respected for its professionalism and persistence. Successive New Zealand governments over the last thirty years have been uncompromising in fighting to protect Pharmac’s role and autonomy whenever international free trade negotiations have raised the possibility that Pharmac is a barrier to free trade, which should be removed. 

When the pandemic came along, and the international rush to secure vaccines at competitive prices began, Pharmac, by dint of its international experience and capability, seemed the obvious choice to lead New Zealand’s quest to obtain the best vaccines at the best price for New Zealanders. Yet it was quickly cast aside in favour of the Ministry of Business, Innovation and Employment, and there has never been a plausible explanation why this was so. 

MBIE may be many things – and certainly and curiously, along with the Ministry of Health, seems to have become one of the government’s “go to” agencies during the pandemic – but as recent developments have shown it has absolutely no experience as an international vaccines’ procurer. Pfizer and the other vaccine manufacturers must have jumped for joy and rubbed their hands in glee when they heard it would be the neophytes from MBIE they would be dealing with, not the wiser and harder heads from Pharmac. 

Reports that MBIE took six weeks to respond to Pfizer’s initial approach in June last year confirm the mystery, especially when the reason given for the delay was that it was not until August that the Cabinet approved the funding required to set up MBIE’s negotiating team “with the right skills and expertise in specialist negotiations.” Those skills already resided within Pharmac and were tried and true when it came to dealing with the likes of Pfizer. They did not need to be replicated and it is hard to see any justifiable reason why they were not utilised. At the very least, it would have meant that the response to Pfizer’s approach could have been immediate, without the duplication of setting up another negotiating team within MBIE, and the effective waste of the more than $500,000 additional funding that required. 

Looking back now, when New Zealand is rushing to play international catch-up on vaccination, that delay, and the subsequent duplication of effort it led to, was little short of scandalous. And there still has been no explanation of why it was necessary, and why the proven skills and expertise of Pharmac were not immediately utilised. 

There are two possible explanations. One is that Pfizer and other vaccine manufacturers pressured the New Zealand Government in some way not to use Pharmac as their vaccine negotiating agent because of their historical antagonism. However, to resort to explicit blackmail like that, followed by craven acceptance from New Zealand seems unlikely. It would be an even bigger scandal than the current situation, were it to be true. 

A more likely explanation lies with potential government wariness about handing too much responsibility on this matter to Pharmac, notwithstanding the fact that procurement of vaccines has long been part of Pharmac’s mandate. In carrying out its role as the purchaser of medicines and vaccines, Pharmac has always operated independently of the government of the day. For their part, politicians have always been quick to reinforce Pharmac’s independence and autonomy and constantly reiterate that medicines and vaccines purchases are not subject to political interference. 

None of that narrative fitted conveniently with the government’s messaging about the Covid19 response. From the outset, the government has been determined to be seen to be directly in charge of and driving the official response. It explains why, for example, general practitioners, community health agencies and pharmacists were initially shut out of any role in the vaccine roll-out, because this had to be seen as a government initiative driven by the Ministry of Health and delivered by district health boards. Only when that model was exposed as too cumbersome and slow did the government acquiesce and allow other health professionals to be involved. And it is no coincidence that all of the innovation we have seen in vaccine delivery has occurred since that time. 

From the government’s political perspective, allowing Pharmac to negotiate the supply of Covid19 vaccines was too risky. As the government had already initiated a review to curb some of Pharmac’s autonomy when it comes to funding new medicines, it was unlikely to be comfortable with a situation that would put Pharmac centre stage in the vaccine procurement and roll-out process. 

But that of itself does not justify the establishment and funding of a whole new and untried parallel negotiating structure under MBIE that so far seems to have done little more than delay the vaccine roll-out to New Zealanders. And since the Pharmac board is now chaired by a former senior Labour Government Minister, the agency is more likely to be far better attuned to the government’s concerns than might have been the case. 

Now, I am not holding a special candle for Pharmac. When a Health Minister I frequently found it to be infuriating, uncompromising and insensitive, but I also quickly came to respect its capability and professional expertise. It knew what it was doing and just wanted to get on with it, attributes which, on the whole, have served the country well over the years and would have been particularly valuable in the face of the pandemic. Given Pharmac’s expertise and experience, and in the absence of any explanation otherwise, it seems simply crazy that the agency has been overlooked throughout this process. 

After all, when you go into war, as we have been with Covid19, you use all the troops and resources at your disposal, not just those you like.