We are pretty good in New Zealand at passing groundbreaking legislation through our Parliament and then leaving it to moulder until some government decides it is not working and should be radically changed.

Seldom do we stop to look at whether the reason for the legislation not working as intended is not so much the legislation itself, as the way bureaucrats and successive governments have chosen to implement it. No, instead we adopt the “baby out with the bathwater” approach, and start all over again, assuring only that without fundamental changes to the way legislation is implemented, the same thing will happen all over again.

Two examples this week highlight the point – the Official Information Act and the Resource Management Act. Both were hailed as far sighted and world leading at the time of their passage, yet both now face the cool breeze of review, once again.

The Official Information Act 1982 introduced the then revolutionary concept that government information should be released to the public, unless there was good reason to withhold it, turning on its head the previous notion that all government information was secret and should be kept so. The Act’s principles still stand up well today, but, over time, problems have arisen with regard to the way requests for official information are handled, with too many instances of unacceptable delays in the processing of requests, or the restrictions on the type of information being released.

Most practitioners of the Act will say there is little wrong with its principles, but much wrong with the way it is administered that should be updated and changed.  Yet, significant modification and updating still seem a long way off, with the government announcing a further delay of at last another three months before it decides whether there should be a review of the Act and the way it works, and despite a preliminary review attracting over 300 submissions calling for more transparency with official information.

At the other end of the scale, the government has announced a complete overhaul for the Resource Management Act 1991. This Act puts environmental sustainability at the core of economic development and replaced the previous mish-mash of more than 54 separate pieces of environmental and planning legislation. A point its critics, probably through sheer ignorance rather than wilful deception, keep overlooking.

However, it was launched in a vacuum in 1991, in part because the then National government did not want to give too much credit to its Labour predecessor for developing the legislation, and in part because of its own deep  antipathy to regional government, which had been intended to play a significant role in the Act’s operation. Consequently, it has never really worked as intended, with central government over the years reluctant to issue any national policy statements, and regional and local governments left consequently struggling to find their proper role. It is little wonder that excessive bureaucracy, decision-making timidity and inconsistency have been the outcome. So now the Resource Management Act is blamed for everything from the housing crisis to climate change, and the knives are out for its replacement.

As with the Official Information Act, making the Resource Management Act work as intended would solve many of the problems associated with it. The previous government tried to do so, but it failed because it found that while attacking the Act and promising to gut its principles altogether was far more attractive to a section of its supporters, there was not a majority appetite in Parliament to do so.

Now the present government is promising a root and branch review of the Resource Management Act, although it is likely to be 2021 at the earliest before any real change proceeds. The Minister for the Environment at least seems cognisant of history, so is unlikely to want to cast aside the principles on which it was founded. But he is also likely to face major challenges keeping both the Greens and New Zealand First on side as the review proceeds, and will come under just the same pressure from development and primary production interests his National predecessors did to simply get rid of the Resource Management Act altogether.  It may end up being all too difficult.

He would be on far safer political ground to make it clear from the outset that the principles of the Resource Management Act are to remain inviolate, but that the real focus of his reform programme will be to make the Act work the way it was originally intended. Such an approach is not only more prudent, but actually has a chance of succeeding and enduring.

Otherwise, some successor Minister in the next decade or so, will have the same bright idea all over again.           

There used to be a school of thought on the centre right side of politics that the best way to neuter the Greens as a political force would be to let them have a spell in government. Then, according to the argument, they would show themselves to be so extreme and so wacky that they would never be elected again.

Well, the Greens are now part of the government, and things have not turned out quite the way those centre right speculators might have wished. Rather than being extreme and wacky, the Greens, on the whole, have been responsible and mainstream. In part, this is due to the Greens’ leadership – particularly James Shaw who is both personable and reasonable – and Ministers like Eugenie Sage and Julie-Anne Genter keeping pretty much to the middle of the government’s road, although co-leader Marama Davidson threatens to go off the tracks every now and then. But, in reality, a bigger reason for the Green’s cautious approach so far, is the chain mail blanket of constraint called New Zealand First which smothers them within the coalition.

The Greens’ problem now is not being so radical as to scare the living daylights out of those nice people in the middle class who vote for and financially support the Greens because they want to keep their native bush outlook in the leafy suburbs and quite like the fact that tui, kereru, and even kaka are becoming much more visible in their neighbourhoods. Rather, their challenge is to appear radical enough to continue to attract the support and activism of the more hard-line environmental idealists on whom they have relied for so long. The Greens’ responsibility in government will be sorely testing their patience. This, coupled with the now traditional loss of support all government support parties suffer, means the Greens can no longer take their presence in the next Parliament for granted, the way they were used to before 2017.

This week’s historic announcement regarding the transition of agriculture into the Emissions Trading Scheme is a good example. This is a significant announcement, given the long term intransigence of the agricultural sector to such a move. The announcement is a small step, admittedly, but it is an important step in the right direction, and it, and the emerging consensus that led to it, are worthy of celebration. But, instead of plaudits for engineering a step forward, the Greens are being criticised by many normally regarded as in their core constituency, including a former co-leader, for not going far enough, being too timid, and still allowing agriculture generally a near free ride when it comes to taking responsibility for its emissions. Compounding this frustration is the announcement that because of a provision in Labour’s coalition deal with New Zealand First, there will be a 95% discount rate meaning that by 2025 agriculture will be required to meet only 5% of the cost of their emissions. Whatever hope there may have been for more progress after the review group’s report has been dashed completely by Labour’s earlier agreement with New Zealand First to limit the cost to farmers to just 5%.

Once again, as has been the case so many times since 2017 on issues of importance to them, the Greens have been left looking a little silly and somewhat politically inept. The question that now raises is how much more humiliation the Greens’ rank and file membership will be prepared to accept before walking away altogether, and simply transferring their support to Labour. Some will stay the course, appreciating that saving the Green brand ranks higher than temporary achievements in government, but others will become more disillusioned, and will start to question whether being part of government is actually worth it,  or whether it is doing more harm than good.

The problem is New Zealand First, not the Greens. But the Greens had the power within their own hands after the last election to have avoided this occurring. It would have been an enormous risk to do so, and would have been extremely difficult to sell to the membership base, or even promote to it, but the best thing the Greens could have done to preserve themselves long term would have been to have formed a coalition with National after the last election.

A National/Greens coalition would have had an outright majority in the House, so there would have no need to involve New Zealand First in any way. They would have been left to moulder in irrelevance on the Opposition back bench, and left to disintegrate. That would have established a largely tripartite structure for the future – National and Labour, with  the Greens as the  permanent party of government, the swing party that could switch between the two over the years, but always ensuring that the Green agenda was part of the government agenda. Had the Greens been prepared to consider such a scenario, National would surely have leapt at it, and would have been prepared to cede virtually the entire environmental agenda to the Greens, so desperate were they to remain in office. James Shaw, not the present incumbent, would have been Deputy Prime Minister, calling the shots on regional development in a considered and environmentally sustainable way, not the crude, pork-barrel way it is happening right now. But, instead, we have ended up with a very inexperienced and not especially talented Labour-led government where the considerably less talented, serially erratic New Zealand First holds all the cards, leaving the rather more competent Greens to just chip in now and then from the sidelines. And National desperately trying to invent a new Blue-Green party to be its salvation in 2020.

Of course all this would have been far easier said than done, and the reluctance of the Greens’ leaders to even consider the proposition for a moment, let alone allow it to go anywhere near the party membership was absolutely understandable and unsurprising. It would have required a level of devious determination and imperviousness to criticism that would have been far too great for most people to even contemplate. And the Greens, as they were once prone to repeat with nauseating frequency, always have been a party of principle, which meant the idea was never a goer.

However, as things have turned out, the irony now is that the earlier wishes of the centre right speculators may yet come to pass, not because the way the Greens have behaved in government has scared the horses, but rather because their timidity and impotence has left their supporters to wonder what was the point of voting for them after all.

 

Greens, seized of the urgency of the climate change debate, in particular, may well decide that cutting out the government middle person altogether, and  putting time and money instead into the likes of activist groups like Forest and Bird and Greenpeace (which they already control)  is a far better and more direct way to take action to save the planet, than relying on the politicians, even the Green ones.

A recent prominent National politician had the so-called Serenity Prayer penned by American philospoher, Reinhold Niebuhr, "God, grant me the serenity to accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference" displayed on a plaque on his office wall. It always struck me that the quotation was as much a statement of this person's approach to politics, as it was a reference to religious faith.

Whatever its significance, though, it certainly has relevance to the National Party of today. In its quest to return to power next year it faces many obstacles, some clearly of its own making, and some quite beyond its control. Its problem seems to be making the distinction between the two, let alone focusing on the factors it can influence, and ignoring the rest. National is simply spending too much time chasing parked cars, and not enough time spelling out where it might be different from - and consequently better than - the current government.

A recent good example was the incredible comment from leader Simon Bridges that he was open to working with New Zealand First after the next election if the circumstances made that an option. All that has done has been to confirm New Zealand First's status as a potential kingmaker once more for either the left or the right side of politics. In so doing, it has restored a relevance to New Zealand First that was increasingly lacking, as well as giving disgruntled National voters somewhere to park their vote, in the hope it might ultimately be of help in getting National back into government. It might well be just enough to get New Zealand First over the line again at the next election.

But it is all pie in the sky lunacy. Even if New Zealand First scrapes back into Parliament at the next election, it is not going to work with National, no matter how desperate the blandishments that might be thrown in its path. Mr Peters is this country's ultimate "utu" politician. His driving motivation of the last 30 years has been to make National pay and continue to pay for the way it has treated him in that time - from his expulsion from the first Bolger Cabinet and then the Caucus in the eawrly 1990s, then his sacking as Treasurer by Jenny Shipley, and finally John Key ruling him out as a governing option in 2008 and 2011. Having now achieved office with Labour, there is absolutely no incentive for his returning to his National roots. Utu, after all, knows no time limit.

If all that is not enough to bring National to its senses, the a dose of the realities of history should. New Zealand First's electoral success is normally in direct proportion to the influence voters sense it might have after the election. Hence, the strong showings in 1996 and to a lesser extent in 2017 when it seemed inevitable it would be difficult, if not impossible, to form a government without New Zealand First; and, the far weaker showings in 1999 after the failure of the first coalition, and 2008 when John Key bluntly ruled out any deal with New Zealand First.

Courting New Zealand First, the way Mr Bridges now seems to want to do, plays right into New Zealand First's hands, making them centre stage once again. And that will not end well for National, either in or out of office.

It is time for National to return to the John Key strategy and rule out New Zealand First altogether. While on the face of it this is a high risk strategy for National, it does have some upsides. First, it is a clear message to even the most obtuse National voter that a vote for New Zealand First is no more than a vote to re-elect the current government. Second, because such a declaration immediately would deprive New Zealand First of its ability to play both sides off against each other, it would diminish its relevance, and therefore also increase the possibility of New Zealand First being tossed out of Parliament altogether, (with a significant porportion of its votes transferring back to National?). And third, it would allow National to focus on its story and the message it wants to promote to voters, without having to worry about how that may sit with New Zealand First.

National cannot change New Zealand First's historic antipathy to National. That is not within its ken. but ruling out working with them is certainly something National can change to. All Mr Bridges needs now is the courage and the wit to see the difference.

In a recent column I was very critical of the performance to date of the current Speaker of the House of Representatives whom I suggested was acting in a far more partisan manner than many recent Speakers, and behaving more like the bully boy that he was in earlier years than Parliament’s independent arbiter which the role of Speaker requires. Since that time, the Speaker has further tarnished his reputation with his reaction to the report into sexual abuse and staff bullying within the Parliamentary complex.

However, in the last couple of weeks he has taken a stand on a couple of more minor issues that do have some impact on the standing of Parliament, and he deserves some credit for this. First, was his decision to ban MPs from bringing file boxes in party colours into the Parliamentary Chamber. There was nothing worse than looking out at the sea of red, blue, green or black boxes across the top of desks, looking more like team scarves at the football club, than a Parliamentary Debating Chamber. And then there was his decision to ban party logos from lecterns for press conferences and the like held within the Parliamentary complex. Small moves indeed, but positive steps nonetheless to restore a small measure of dignity to Parliament, for which the Speaker deserves credit.

There is one much more significant issue the Speaker needs to address in this regard. In the days before MMP, the convention was that Members were never referred to by name in the Debating Chamber, but by the name of the electorate they represented, or, in the case of Ministers, the portfolio they held (ie., the Member for So-and-so or the Minister of Such-and-such). With the advent of MMP and list MPs not holding an electorate seat  that convention became impractical, for obvious reasons, and Members started  to be referred to by name. There is no problem with any of that, and no need for change.

But, a whole new language has developed about how list MPs are permitted to style themselves. Rarely does one see the description “X” Party list MP – far more common is the appellation “X Party list MP based in the “Y” electorate, or representing the “Z” region, implying somehow that these MPs who have no direct electorate responsibilities as such have at the same time a de facto role as alternate electorate MPs. Many of them have stood in and been defeated in the electorates they like to claim association with, but this not justify the way they have been allowed to describe themselves over the years. Both the major parties are at fault here - they cling to the practice for two main reasons: first, it enables them to claim an ongoing presence in the area between elections, and perhaps set up a taxpayer-funded electorate office there; and, second, it sends a message to the parties’ local supporters that even though they do not hold the electorate seat, the party still cares for them nevertheless.

Now, however cute and cosy all this might be, it is actually a perversion of the MMP system. MMP draws a distinction between electorate MPs elected to represent a particular geographic locality, and list MPs elected to represent a party’s interests more broadly. If it had been MMP’s intention to have electorate MPs directly elected, and list MPs acting as electorate surrogates, we would have been better placed to have simply gone for multi-member constituencies and MPs being elected on a preferential basis, with no need for party lists. In other words, the Single Transferable Vote or STV system. But we did not. In two referenda New Zealanders opted clearly for the MMP system, and until or unless the public preference changes, it is Parliament’s responsibility to respect and uphold that choice, and not try and make it something else.

And, as Parliament’s person, the Speaker is primarily placed to uphold that responsibility. He is the one best placed to stop the game playing of the parties about how list MPs are described, and to insist that everyone plays the game properly and straightforwardly. To that end, he has the authority to require List MPs to describe themselves exactly as what they are – “X” Party List MP – without the additional embellishment.

When it came to issues like changing the Parliamentary Prayer, or banning the coloured boxes and party logos, the Speaker acted on his own authority, without any obvious consultation with the political parties, which might hsve been the case in earlier times. He obviously calculated that in the end the issues were not that important to MPs to cause more than a day or two’s passing irritation.
The challenge now is for him to show similar courage and independence in respect of the way List MPs are styled, especially as this is an issue MPs are likely to feel somewhat more strongly about. On taking office at the start of this Parliament, the Speaker, consistent with all his predecessors, promised to carry out his duties “without fear or favour”. So here is an opportunity for the Speaker – a List MP himself – to demonstrate that in practice.

Parliament's current Speaker is turning the ancient and venerable institution on its head. Traditionally, the Speaker's role has been a rather conservative, sometimes passive, one to preside independently, without fear or favour over proceedings in the House, to ensure that no Member of the House acts in a way that brings Parliament into disrepute, but that every Member, regardless of how senior or junior they are, or what party they represent has a fair and reasonable opportunity to promote their views on the issues before the House. For those reasons, Speakers of the House of Representatives normally stand aside from partisan political activities during their term, and put a reasonable perceptible distance between themselves and their own party, so they cannot be accused by anybody of any form of political bias.

Mr Mallard seems hell-bent on changing all that. He is a long serving MP, second only in seniority to the Deputy Prime Minister in the current Parliament, and, as a former Whip and Minister, has seen more than most about the management of Parliament. Faced with a new government and a totally inexperienced Prime Minister he seems to have taken on the role of her protector in the cut and thrust of Parliamentary debate, Question Time in particular. While his paternalistic approach towards the Prime Minister may be understandable in the circumstances, it is, at the same time, not only utterly patronising, but, worse, it is completely inappropriate and totally compromising of the presumed impartiality pf the Speaker.

When his innovation of adding or subtracting the number of Supplementary Questions the various parties are entitled to during Question Time as penalties for what he considers bad behaviour is considered as well, it is difficult to escape the conclusion that Mr Mallard still sees himself to be an active player in the Parliamentary game, rather than its impartial referee.

There might less of a debate about the current Speaker's performance if the perception was that his interventions were evenly spread between the Government and the Opposition. But the reality is that because Parliament is the Opposition's main platform for criticising the Government (which, conversely, by the nature of its role has many more opportunities to promote its message) it is the Opposition that always tends to feel most acutely the way it is treated by the Speaker, no matter how partial or impartial the Speaker may be. And that puts an added pressure on the Speaker to be doubly sure that his treatment of the Opposition in the House is not just fair and reasonable, but is overtly seen to be so. That is where Mr Mallard is failing.

Of course, given his experience, he knows full well the various games the Opposition are playing - he has played many of them himself when in Opposition - but that does not mean it is his role as the impartial referee to try and head them off from doing so, before they actually do so. Yet, time and time again, he seems too quick to intervene to cut the Opposition short, to the benefit and delight of the Government. That is not as it should be.

There were examples of all of the Speaker's shortcomings on display in the House this week. His decision to throw the Leader of the Opposition out from Question Time because he was making alleged "barnyard" noises in response to answers being given by the Prime Minister was an over-reaction. Yes, Mr Bridges was at fault because Ministerial answers are supposed to be heard in silence (yet I seem to recall being interjected upon by Mr Mallard many times when answering questions) but his misdemeanour deserved a stern rebuke, not an expulsion.

Even worse, was the Speaker's decision to "Name" Dr Nick Smith - whom he had just expelled - for shouting criticism of the Speaker as he left the House. Now, I have no particular brief for Dr Smith - he can be unreasonable bordering on utterly impossible at times. (Indeed, I well recall trying to negotiate with him about the Resource Management Act, and being told he was only willing to do so if I gave him a prior commitment that whatever happened we would reach an agreement!) But his behaviour, while impulsive and silly, did not justify his being "Named". Being "Named" means an MP is suspended from the service of the House, initially for 24 hours, but in rising amounts if the offence is repeated, and deprived of salary and access to the House's resources for that time. Put into perspective, Dr Smith's offence was akin to the serial parking offender who wrote an abusive letter to the local Council, being sent to jail for 10 years, completely over the top and out of all proportion to reality.

The major part of the Speaker's role is to ensure the smooth running of the House, and the Parliament as a whole. That relies on co-operation from the Opposition, which in turn will be based on the confidence it has in the Speaker. Already, the Opposition has labelled Mr Mallard a "bully", making the prospect of serious co-operation for the balance of this Parliament quite unlikely. And the blame for that can be laid fairly and squarely at Mr Mallard's overly (and overtly) partisan door. He needs to take the lead in repairing the damage he has created so far, and assuaging the view that he is probably Parliament's most biased Speaker in the last thirty years.

Mr Mallard revelled in being Parliament's resident bully boy when he was in Opposition. And he was good at it. But trying to reprise the role from the Speaker's chair to protect the Prime Minister and batter the Opposition is not acceptable. If he carries on this way, he will achieve the dubious honour of being remembered as the Speaker who brought Parliament into disrepute.

Dunne Speaks is taking a brief break, but will be back at the end of June.
 

In my Newsroom Column last week about the proposed Capital Gains Tax I wrote that "Notwithstanding her own strong feelings in favour of a comprehensive capital gains tax, [the Prime Minister] needs to recognise the depth of public opposition and reject the Tax Working Group’s recommendation outright. Otherwise, as the Reid Research poll shows, she risks the real possibility of the public rejecting her just as forthrightly. ... While there are times when Prime Ministers with considerable political capital can afford to spend some to push through some visionary change they feel strongly about, this is not one of those.  The continued pursuit of a comprehensive capital gains tax is just not worth it. The sooner it is buried, the better - for the country, and for the government."

Well, credit where credit is due. The Prime Minister has done just that, so congratulations to her. But while the Capital Gains Tax is dead, there are a number of intriguing questions that remain.

In her announcement, the Prime Minister reiterated her personal support for a Capital Gains Tax, but made it clear the proposal lacked the support internally and amongst the general population to make the tax a viable option. She further said that although having campaigned for a Capital Gains Tax at every election since 2011, Labour would no longer do so, nor implement one, so long as she is leader. It is an emphatic rejection of the nearly $2 million Tax Working Group that spent about eighteen months considering the issue.

But while the public and the business community may be relieved at the Prime Minister's announcement, there is still the problem of the Greens to deal with. Some weeks ago, one Greens co-leader was saying the government would not deserve re-election if it failed to introduce a comprehensive Capital Gains Tax, while the other was saying that the Capital Gains Tax was only the start of a major tax attack on the wealthy. Both have been properly humiliated by the government's decision, and must be left wondering about their futures, not to mention their now non-existent credibility. In the wake of the announcement, there were Green Party activists on social media blaming it all on New Zealand First, and saying that it reinforced the need to elect a Labour/Greens government at the next election, that would be not reliant on New Zealand First, so would be able to introduce a full Capital Gains Tax then.

However, those activists have overlooked, or were unaware of, the Prime Minister's admission that her personal support notwithstanding, the very idea of a Capital Gains Tax is stone cold dead, so long as she is leader of the Labour Party. So, unless the Greens know something about the Prime Minister's future leadership intentions that no-one else seems to know, they are left yet again whistling naively in the wind. 

The next question relates to the role of Sir Michael Cullen. Leaving aside his $1,000 a day pay rate, he was simply too partisan to be a credible independent chair of the Tax Working Group. His comments after the announcement that the "biggest losers" from the government's decision were the National Party because "this was how they were hoping to ride to victory and Mr Peters has shot it out from underneath" them. Those comments reinforce how utterly inappropriate it was to have someone as hopelessly partisan as Sir Michael chair the review, and that that alone probably entrenched public opposition to the Capital Gains Tax. And it also raises the question of whether the Tax Working Group's recommendation of the most draconian and pure Capital Gains Tax in the world was not a clever political ploy all along by Sir Michael to achieve precisely the outcome he referred to above. If he really was the staunch previous opponent of Capital Gains Tax he portrayed himself as (although I clearly recall him testing the water for one during the 2005-08 government) who better to lead the charge for one now, knowing all along it would be defeated, not by the government’s opponents, but from within the government itself? 

As for New Zealand First, the outcome has reinforced the perception that it is they who pull the government's strings, not the Labour Party nor the Greens. The notion that the Prime Minister is but Mr Peter's plaything has been there for some time, and is frequently offered as the explanation for why she tolerates the irresponsible conduct of Minister Jones, when other Prime Ministers, like Helen Clark for example, would although have fired him a long time ago. Her plaintive acknowledgement that although she still supports a Capital Gains Tax, the rest of New Zealand does not, and there is not agreement within her government simply strengthens that perception.

The Labour Party finds itself in a peculiar position following its announcement. On the one hand, it is almost certainly broadly in step with public opinion, which is no bad thing, and unlikely to do its overall standing any great harm. However, it will be two very grumpy groups, for whom the Capital Gains Tax has been a long cherished envy-laden idealistic dream, that it now has to placate. First, are the unions,  leftish social advocacy groups,  and the Labour Party's core activists; and, the second is the Green Party and its supporters. Bringing both of them back into the fold so that they campaign strongly for the return of Labour-led government at the next election now becomes a major political priority for the government. Ironically, the teachers may be unexpected beneficiaries - if Labour now has to deliver something dramatic to its core supporters to show it still retains "the faith", what better than a hefty teachers' pay settlement to keep the branches going and the activists knocking on doors in election year? Otherwise, with Capital Gains Tax abandoned, Kiwibuild foundering, and nothing too much else happening, there may be precious little left for the “true believers” to hang on to. 

Or else, the Prime Minister could simply decide to stare them all down on the basis they have no other political home to go to. Just like John Key did to National voters for nearly nine years. After having been so critical of the Key Prime Ministership, stealing his playbook would be the ultimate u-turn! 

   

National's unsuccessful attempt to get a Parliamentary inquiry into PHARMAC is a classic case of shooting the messenger. PHARMAC is a procurement agency, charged with securing the nation's supplies of medicines and medical devices. But it is not, and was never intended to be, a policy agency.

Under the national medicines strategy, Medicines New Zealand, which has underpinned the medicines policy of successive governments since I developed it in 2007, there are three very specific objectives. First, that medicines are safe, of high quality, and are effective; second, that New Zealanders have access to the medicines they need, regardless of their individual ability to pay, and within the government funding provided; and, third, that the choices made about medicines, the ways the system delivers medicines, and the ways individuals use medicines result in optimal outcomes.

In pursuit of those objectives, since 2007, under both Labour-led and National-led governments 420 new medicines have been funded; 500,000 more people have been receiving subsidised medicines; and, PHARMAC’s budget has been increased by almost 56% - from around $650 million to $985 million. However, there are still significant issues about the overall level of funding; the time taken to fund new medicines; the effective proactive use of medicines; and, the role of clinical trials.

Whoever forms the government in the future, the overall size of the PHARMAC budget is unlikely to change substantially. There are primarily two reasons for this. The first is obviously fiscal. New Zealand has had bad experiences in the past with an uncapped approach to pharmaceutical expenditure – the laxatives and antihistamines blowout in the late 1980s, which triggered the start of what was to become the PHARMAC model in 1993 is worth recalling. Aside from the lesson of the need for firm budgetary control that example also highlighted the desirability of removing individual product funding decisions from political influence, unlike in Australia, or Ireland, for example. In my time, and to some extent to my surprise, my discussions with Health Ministers from around the world always showed some envy for the New Zealand approach and the role PHARMAC plays.

An original aim of the medicines strategy was to bring about a change in attitude, which for too long, and in too many cases, with often tragic results, had seen medicines treated as the back stop –  in other words, when all else has failed, medicate. That attitude has to change, if more effective use of medicines is to be made.

However, there are currently two broad obstacles to be overcome. Medical specialists themselves remain wary of their established forms of treatment being disrupted or replaced by medicines. While that is understandable from a professional standpoint, it can lead to perverse outcomes, both for the patient and the health system generally, where a medical intervention is persisted with, when a medicine might be the more effective treatment.

With regard to the medical profession, there is still a need for closer integration with pharmacists, to ensure both that medical practitioners are best informed about the availability and capability of new medicines; and that they getting the best possible clinical advice about their potential. The relationship between medicine and pharmacy is still too hierarchical – it needs to become much more equal and horizontal, if we are to make the most of every point of care, and achieve truly integrated health care. 

Alongside this is the constant worry of governments about the rising costs of new and innovative medicines, and how they can possibly be afforded for the population. At the OECD Health Ministers meeting which I attended in 2017, there was strong condemnation across the board from countries as different as Japan (probably the most vehement of all), Norway, Britain, and most of Europe about the high costs of medicines, and the prices being demanded by Big Pharma. Only the USA was prepared to defend those costs.

The role of clinical trials and the time taken to fund new medicines are arguably the most critical issues facing the medicines sector at present. New Zealand is in many ways an ideal environment for clinical trials – robust regulatory systems, and a convenient population size. Changes in 2007 (by me, as Minister of Revenue) to the tax treatment of research and development had in mind encouragement of clinical trials of new medicines.

Informal preliminary discussions had indicated an interest amongst some pharmaceutical companies in pursuing clinical trials under such arrangements, yet none eventuated. It was very much a lost opportunity, and the tax credit was abolished by the National-led government (with my vote opposing the change) in early 2009.

The time taken to fund a new medicine is unacceptably long. All applications for funding new medicines are first reviewed by PHARMAC's expert Pharmacology and Therapeutics Advisory Committee (PTAC), which then makes a recommendation to PHARMAC. However, although PTAC’s clinical efficacy processes are generally robust, they carry no automatic expectation that a medicine once approved should be funded. And herein lies the problem. PHARMAC funds new medicines as and when it considers that to be a budget priority, regardless of any urgency in a PTAC recommendation. Sometimes, that can take years, by which time a newer and better medicine may have emerged, thus starting off the process all over again.

An unintended consequence of the funding approach of the last three decades under the PHARMAC model has been that the procurement agency has also become the policy agency. It has become the norm for politicians and health bureaucrats to defer to PHARMAC on all matters pharmaceutical, on the grounds that these are clinical decisions that should not be subject to political influence. While it is perfectly understandable, and in many cases the correct thing to do, when taken to the extreme, it leads to an abdication of government responsibility that should be addressed. It has led to the current situation where PHARMAC has become not only the procurement agency for pharmaceuticals and medical devices, but also the de-facto policy agency deciding what medicines New Zealanders should get.

What is currently missing is a plan of what range of medicines the New Zealand population might reasonably expect to have access to and how these should be funded. The Ministry of Health needs to step up here and take a more active role, alongside the clinical experts, the pharmaceutical industry, and community advocates to answer that question and prepare a plan accordingly to inform both future Government funding decisions and PHARMAC’s procurement strategy. And the Minister of Health, who seems to be making a virtue out of not talking to anyone, needs to come out from his shell and become more actively engaged. 

These are the much wider questions the Health Select Committee could usefully be inquiring into, rather than the narrow focus on the way PHARMAC operates as National was seeking. Without such a wider, more fundamental, investigation nothing much is likely to change, leaving patients, clinicians, other health professionals, pharmaceutical companies, and the general public equally unsatisfied.