How do you tie bureaucrats’ and politicians’ hands so they won’t make mucky law? Rodney Hide thinks he has the answer.
New Zealand ranks high in some lists of “free” economies and ease of doing business. But that is not because it goes easy on making law. Parliament passes scores of acts a year, the cabinet raises a small mountain of regulations and ministers and officials issue rivers of edicts which amount to law.
The volume and speed ensure mistakes. Politicians, slaves to polls and ideology, add idiosyncratic twists. One lot undoes what the previous lot did.
Some of that affects the ease of doing business and the policy certainty business needs to plan effectively. The greenhouse gas emissions trading scheme is an example.
To lift the game, officials have long been required to affix impact statements to new bills and regulations to explain the problem and why new law was needed. They degenerated into pro forma justifications. Lianne Dalziel as Commerce Minister tried to beef them up.
Hide thought that insufficient and in 2006 got into the House a Regulatory Responsibility Bill drafted by Business Roundtable economic adviser Bryce Wilkinson. Sir Geoffrey Palmer, as head of the Law Commission, issued a scathing assessment. Dalziel put the bill on hold.
Hide was not deterred. He got National to disinter the bill and have it reworked by a taskforce headed by Graham Scott, ACT activist and former Treasury Secretary.
Meantime, he convinced an initially sceptical Bill English to issue in August a joint instruction to officials and ministers toughening up impact statements.
They now must certify, over signatures, that a new law is “required, reasonable and robust” and is in the public interest and that all practical alternatives have been considered, benefits exceed costs, entitlements are clear and conform to best legislative practice and implementation issues, costs and risks have been addressed.
Chief executives must over time ensure existing law, too, conforms to those criteria.
That is a huge project. But Hide wants all this, and more, embedded in statute. His bill, expanded by Scott and Co, would require ministers and officials to certify all law conforms to a set of principles or say why not.
The courts would be able to declare acts, regulations and edicts incompatible with the principles and would have to reinterpret existing law in the light of the principles if possible.
Prime among the principles, in addition to ones similar to those in the August edict, would be the right to property and compensation for property the state takes for its needs.
That would enshrine property as a fundamental right and put the Scott bill on a par with the Bill of Rights. That is a large step — in effect, a constitutional change.
At this point Hide’s principled politics meets National’s pragmatic politics.
Hide has to prove himself to his free-market believers. National has to keep Labour off the centre ground. Hide has to get ACT policy through the cabinet to stop voters getting disillusioned and deserting. National has to deter centrist voters from thinking National is ACT in drag.
So the government is set to soften Hide’s bill to a requirement that governments spell out regulatory principles and say when they are departing from them (as they must now do with fiscal prudential principles). Ministers say that would reduce the likelihood a future government would junk the whole idea by repealing the law.
In any case, National ministers reckon ACT is in Parliament only on National votes in Epsom — not out of adherence to ACT’s philosophy but from a desire to ensure a support partner for National.
Much the same calculus applies to Hide’s attempt to enshrine spending caps in a taxpayers rights law. English will work on caps after the budget but they will have flexibility.
So is Hide’s cause lost? Some ACT supporters — taking their cue from Sir Roger Douglas’s warning in February against getting “stranded in the middle ground” — will think so.
Actually, Hide has been far more influential than his five seats to National’s 58 would predict.
That is partly because most of his policy thrusts tickle deep National instincts, which makes it easier for ministers to go some way with him. But without Hide those instincts would likely have remained just instincts.
So, while Hide won’t get the king hits he wants, the result will be more stringent tests on new law. Even in the Labour party some think that not a bad thing.