Hide: minister for constitutional change

While the Labour party in Rotorua was plotting a republic in a decade or so, back at the shop Rodney Hide has been getting on with constitutional change in the here and now.

Most obviously that change is coming in the new super-Auckland, with enhanced powers for its mayor. Auckland will be a bit like a state government. When the mayor of a third of the population speaks, a Prime Minister will have to listen.

But Hide has also been busy on regulatory reform, his other major portfolio. His little-noticed joint statement with Bill English last month is potentially a major change in the way this country does legislation and regulation.

Still to come is the report this month of a taskforce, headed by former Treasury Secretary Graham Scott, on how to progress Hide’s Regulatory Responsibility Bill from Parliament’s last term, which focuses on private property rights. Next is a Taxpayers Rights Bill, to be promoted by ACT next year, tying government spending increases to no more than the rate of inflation and change in population.

Hide leads a small party attached to a government. That is a perilous occupation.

The New Zealand party and the Alliance are no longer in Parliament. The last remnant of the Alliance, Jim Anderton, has all but rejoined the Labour party and spoke at its conference. Peter Dunne is a one-man show.

To survive alliance with National, Hide reckons ACT has to take the long view and deliver some wins to supporters for its principles. One is Don Brash’s commission to monitor progress towards getting productivity growth up to 3 per cent a year to catch up with Australia and pronounce on the policies needed for that.

That highlights Hide’s role as Minister for Regulatory Reform. He ties that explicitly to his other portfolio, local government. His proposal is still live for voters at next year’s local elections to have spending scenarios in front of them and to be able to tick which one they want.

But that’s small beer beside the reform Hide has won from National at national level.

He wants new legislation and regulation stringently vetted and existing legislation and regulation progressively reviewed. That was the core of his and English’s statement last month.

From November 2 no decision on new law is to be taken unless a minister certifies that the problem can’t be addressed through private arrangement, all options have been considered, the benefits outweigh the costs and “will deliver the highest level of net benefit of the practical regulatory options available”, the new rules can be easily understood and conform to legislative principles and best practice and “implementation issues, costs and risks have been fully assessed and addressed”.

The impact statement which for some years has been attached to new legislation is to be beefed up and is to carry the signature of a senior official in the relevant department that it has been done professionally and competently. Officials are to be encouraged to give free and frank advice on a minister’s pet proposal.

The new measures don’t stop ministers making laws they have promised to supporters and at election time. But they will have to be open about the disbenefits along with the benefits. And signing off documents — as the Minister of Finance signs off budget policy statements — may cause ministers to think twice.

But that’s not all. The statement last month also committed English and Hide to an annual regulatory reform bill to remove or simplify “unnecessary, ineffective or excessively costly requirements” in existing legislation. The idea is a quota for each department.

These changes are to be gradually firmed over time to give ministers and officials years time to get up to speed. Given National’s inherent conservatism, Hide may have to be influential in the government in the next term to get his reforms embedded in practice.

And if the government changes to one that is wedded to the idea that making new laws is good, there is a risk for Hide that his work will be undone. Not every voter — not even every business voter — wants less regulation. For every pusher for less government, there are two for more. That’s politics.

Hide has modelled his reforms on the big legislative innovations in 1989 and 1994: the Reserve Bank Act, the Public Finance Act and the Fiscal Responsibility Act. Together, those acts tied politicians’ hands on monetary policy and forced much greater transparency in public finances.

They amounted to constitutional change — not of the showy formal sort such as abolishing the Queen and Privy Council appeals, but nevertheless substantial changes in the way power is exercised. The 1982 Official Information Act is another such change.

That constitutional change is what Hide is after. He has five seats in the House to National’s 58. But so far the 58 are going along with the five. What we won’t know for some time is how long and how far they will. Politics has a way of biting principle.