It is difficult to escape the conclusion that the government was delighted with this week’s ruling from the Supreme Court that excluding sixteen- and seventeen-year-olds from the right to vote was inconsistent with the Bill of Rights Act. Not because of the weight of the legal argument, nor the morality of the cause, but simply because the ruling provided the government with a huge distraction from all the other problems confronting it at present. 

Under Section 7 of the Bill of Rights Act, whenever a declaration is made that an action is inconsistent with the Act, the Minister responsible is required to report to Parliament within six months of the declaration what actions the government is proposing to take. In this case, the government has until the end of May next year to advise Parliament of its response to the Court’s ruling. 

But rather than waiting six months to make its response known, the government waited barely six hours, so gleeful was it at the distraction the Court had provided. The Prime Minister did not even wait for the Labour Caucus to meet, before announcing the government’s response. Legislation to lower the voting age to 16 will be drafted immediately, she promised, and introduced to Parliament as soon as possible. 

That immediately ensured all the right headlines and focus for the next couple of days at least, during which time the Reserve Bank is expected to lift interest rates by the biggest amount yet, further hitting already struggling household budgets. The cynicism of the decision is highlighted by the fact that for the voting age for Parliamentary elections to be lowered, a minimum 75% of Parliament (90 MPs) must vote in favour. When she made her announcement the Prime Minister said she did not know whether all Labour MPs, let alone MPs from other parties supported the move, which she hoped would be determined by a conscience vote. Her promised legislation was therefore nothing but smoke and mirrors. 

Subsequently, National and ACT MPs said they would oppose the Bill, meaning it will not get the 75% support level it needs to pass, which is the ideal outcome for the Prime Minister. In contrast to the cannabis referendum a couple of years where she scrupulously avoided taking a public position for fear of influencing the outcome, the Prime Minister showed no such scruples this time, and was quick to express her personal support for lowering the voting age to 16. 

The current outcome could not be better for her – thanks to National and ACT, nothing will change, but the Prime Minister will be able to keep empathising with young, upcoming voters about how much she “personally” supports their cause, even though, like so much else, she cannot deliver it. More importantly, by doing so, she potentially locks in their support for when they are eligible to vote. So, the government’s response is far more about securing its political advantage, than addressing the principle raised by the Supreme Court of whether it is right to exclude 16–17-year-olds from being able to vote. 

But political opportunism over principle runs just as strongly in the National/ACT position too. Both parties fear that new young voters may be less likely to support them, so why risk widening the franchise to their detriment? At the same time, what little polling has been done amongst existing voters shows just under 80% opposition to any further lowering of the voting age, so why risk antagonising them, especially older and more conservative voters, more likely to support the centre-right bloc? Arguments about whether 16-year-olds are mature enough to make an informed vote are smokescreens for this basic position. 

There is another aspect to this debate that might end up being the path followed. While lowering the voting age for Parliamentary elections requires the support of at least 75% of MPs, a change to the voting age for local body elections, requires only a simple majority in Parliament. So, it could well be that Parliament, by virtue of Labour’s current majority, changes the voting age to 16 for the 2025 and subsequent local body elections, while keeping the age for general elections at 18. 

That would be a messy situation but would allow for a post-2025 review of how effective that change might have been. If a lowered voting age for local body elections proves to be successful in terms of increasing turnout and engagement, then consideration could be given to reducing the age for general elections. The most likely date for that to happen would be the 2029 general election, by which time most of the current crop of politicians will have moved on. 

But that is all too far in the future for the government to be concerned about at present. All it knows, is that right now the Supreme Court has presented it with a wonderful diversionary opportunity of which it must take full advantage. Given there is little else flowing its way at present, it is hardly surprising it will milk the issue for all it can over the next little while, secure in the knowledge that nothing is actually going to change.

 

 

For the last thirty years the Resource Management Act (RMA) has been contentious. Introduced by Labour under Sir Geoffrey Palmer in 1989, the legislation was still making its way through Parliament when the House rose for the 1990 general election. 

The incoming National Government sent the Bill back to a select committee for fresh consideration, before finally passing an amended version in late 1991. Already, at that point, an issue that was to bedevil the RMA for the rest if its life had emerged. Although National, along with just about everyone else, expressed support for the ambitions of the RMA to promote sustainable development and bring together more coherent resource management processes, getting durable agreement on what that meant in practice was much more difficult. 

That was hardly surprising, given that the RMA consolidated more than fifty existing planning statutes into a single piece of legislation, consequently overriding much of the already established case law on planning and development. Unfortunately, at the time of its passage in 1991, little attention was paid to ensuring regional councils, who were to be the principal agencies involved in administering the new law, were properly resourced. In fact, in a separate piece of local government legislation passed around the same time, the National Government significantly gutted the powers of regional councils, meaning the RMA was launched in a vacuum. 

A key feature of the RMA was the ability of central government to issue national policy statements on various areas of concern to guide regional councils in their application of the law. However, few national policy statements have been issued over the last thirty years, further compounding the ability of regional councils to implement the RMA as intended. In too many cases, they have been left guessing the intent of the law. 

The upshot was an extremely cautious approach by regional government, borne out of the 1991 curb in its powers, and the initial lack of case law, to the administration of the RMA. This manifested itself in bureaucratic and drawn-out consent processes, to make sure all the right boxes were ticked, to protect councils from legal or other backlash. Inevitably that meant higher costs than ever contemplated to consent applicants, to pay for these lengthy processes. 

Consequently, pressure quickly began to build to “tidy up”, “streamline” or “just get rid off altogether” the RMA. But here is where the initial inherent conflict between the RMA’s core ambition of promoting sustainable development and making the legislation work as intended, clashed head-on again and again. Successive governments were wary of radical changes to the RMA, lest they be accused of weakening the key principles underpinning the RMA. Such changes as were made were structural and procedural, rather than fundamental. 

The last National-led government attempted the most sustained approach of recent times to reforming the RMA, but it failed to achieve that because of the strong suspicion that its intention was really to gut the RMA altogether, to satisfy the interest of developers, rather than make it work more effectively. On that basis, it was unable to get the political support it needed to progress change. Had its Minister at the time adopted a less doctrinaire and more pragmatic approach, significant progress could have been made to tidying up many of the RMA’s problem areas and introducing the provision of adequate housing into its objectives. But its unwillingness to make reasonable compromises to preserve the principles on which the RMA was founded, meant that, unfortunately, the opportunity was lost. 

The present government’s three stage approach to reforming resource management law announced this week is the boldest change since the introduction of the original Resource Management Bill over thirty years ago. But it faces many of the same problems. These arise from the sheer bulk and complexity of the reform process. 

Expert comment that the changes now being proposed will likely take a decade to bed down and begin to work as intended highlight the problem. The government introduced the first of three reform bills to Parliament this week, with the remaining two to follow over the next couple of years. But between now and the end of 2032, there will be four general elections, making it very difficult to predict with any certainty whether these Bills will ever see the light of day, let alone proceed in the manner currently envisaged. The opposition from National and ACT and the muted support from the Greens suggest the passage of the Bill introduced this week could be rocky. 

It is true that the Minister for the Environment has worked long and hard to bring this package together, and he deserves credit for that. However, as he shown in his other portfolio of Revenue where his laudable pet project to establish a legislated set of tax principles to guide future tax legislation has stalled, he is not nearly as good at building political consensus for major changes, as he is on the detail. Yet for the resource management reform programme he has outlined to get off the ground, let alone be completed and survive the next decade and beyond, far greater political consensus than currently exists will be required. Otherwise, the story of the RMA over the last thirty years will be repeated. 

The Resource Management Act was fundamentally a good concept, but the failure and unwillingness of our legal, governance and administrative systems over the last thirty years to come to grips with its intentions ultimately sealed its fate. Now, with the prospect of a new resource management regime ahead, hard lessons need to be learnt and applied to prevent the problems that derailed the RMA occurring all over again. 

Building political consensus for the changes being proposed should be at the top of those lessons. The early responses to this week’s announcements suggest such consensus is still a long way off. 

One can therefore be forgiven for feeling a sense of déjà vu.

  

 

 

National’s and ACT’s attacks on the Reserve Bank and its Governor are becoming more frequent and strident. As the cost-of-living crisis bites deeper, and the Reserve Bank tightens the screws on interest rates, pushing up home mortgage rates, it becomes easy to portray the Reserve Bank and its Governor as the problem. 

Add in the fact that Adrian Orr does not fit the traditional mould of a central banker, with his irreverent flamboyance and brusque manner (a Doc Martin of the monetary policy world, if you like) and he and the Reserve Bank can quickly be portrayed as cavalier, financial technocrats playing havoc with, and caring little about, small to medium businesses and households struggling to get by at present. 

With recent announcements of enormous trading bank profits, which have aroused the ire but not any action from the Prime Minister, a wider picture can be painted of the financial sector, aided, and abetted by an unpredictable Reserve Bank acting consistently against the interests of increasingly hard-hit average New Zealanders. 

But no matter how attractive this scenario looks, the mounting focus on the Reserve Bank and the Governor is in fact aiming at the wrong target. 

It is certainly true that the Governor of the Reserve Bank exercises considerable autonomy in the operation of monetary policy and the control of inflation. But he is not a law unto himself. He works within the provisions of the Policy Targets Agreement concluded with the Minister of Finance and the Reserve Bank Act. Therefore, the real target of criticism for the performance of the Bank and its Governor should be the Minister of Finance. 

This is especially so in the current situation where Orr was not only appointed by the current Minister in 2018, but also reappointed for a further five-year term just this week. Moreover, last year, this Minister also amended the Reserve Bank Act under which the Governor operates. 

That Act not only streamlined the Bank’s governance processes but also balanced the Bank’s historic independence with greater accountability and reporting requirements. It also introduced a provision enabling the Minister of Finance to issue a Financial Policy Remit to the Bank, setting out matters its Board must have regard to. When these changes are added to the Policy Targets Agreement the Minister and the Governor concluded in 2018 requiring the Bank to take employment outcomes into consideration in the operation of monetary policy, the Reserve Bank now has far less operational independence than at any previous point since the current framework was established in 1989. 

Labour was concerned in Opposition that the Bank’s previous sole focus on controlling inflation lacked context, hence the decision to broaden the mandate to also include taking employment outcomes into account. They wanted this to reduce the Bank’s single-minded focus on inflation. However, an unintended consequence of that change has been that the breadth of the Reserve Bank’s influence on the economy has been extended. 

In such circumstances, it is hardly a surprise that the Governor’s role has become more pervasive, as he seeks to balance controlling inflation and maintaining employment levels at a time of rising living costs and a threatening global recession. Nor would it be unreasonable to conclude that the apparent greater influence of the Governor on current economic policy is far more a direct consequence of deliberate policy moves by the current Minister of Finance, than any personal whim of the Governor of the Reserve Bank. 

That is why National, and Act are aiming at the wrong target when they attack Adrian Orr. The real object of their criticisms should be Grant Robertson who has not only twice changed the arrangements under which the Governor carries out his statutory functions, but also appointed and reappointed him to the role. 

Although National and ACT voted against the new Reserve Bank Act last year, it is far from clear they will overturn it when they next return to office. Nor is it clear whether they would amend the Policy Targets Agreement back to a purer focus on controlling inflation. The strong suspicion is they will allow these changes to remain. 

In which case attacking the messenger – the Governor and the Bank – is safer than attacking the message. It is also an easy populist excuse, attacking the Governor and his team for doing the job the government has assigned to them, rather than the job itself. A more direct criticism of the Minister of Finance for his interference in the historic autonomy of the Reserve Bank would require National and ACT to spell out where they truly stand on the Bank’s role and independence, and what they would do to protect and enhance it. In these circumstances, harangues against the Governor are a far safer, if more cowardly, option. 

The independence of the Reserve Bank, guaranteed by statute in 1989, has been hailed worldwide as a strong step towards ensuring the stability of our monetary and banking systems from the threat of direct political influence on their day-to-day operations. Much of New Zealand’s improved economic performance in the last thirty years is because of the Reserve Bank Act, supported by the Public Finance Act and the Fiscal Responsibility Act.  Labour’s meddling with the Reserve Bank since 2017, and now National’s direct attacks on the Governor, pose serious threats to that, to their mutual shame.