Take your partners for the foxtrot

Colin James’s column for the NZ Herald for 9 August 2000

This government is big on "partnership". It wants one with local government, with business, with Maori – with nearly everyone who will play.

Steve Maharey even has a very PC committee beavering away to develop a "framework" to govern its partnerships with non-government organisations and the voluntary sector.

But partnerships sometimes don’t work out. They are often unequal. They can lead to unintended consequences. They are, in short, a risk as well as an opportunity.

Witness farmers. For two decades after a national conference on agriculture in the mid-1960s, farmers had what we might now call a partnership with the government to produce as much as they could. The government’s side of the deal came in tax breaks, subsidies, free research and advice.

By the early 1980s the Muldoon government had piled up these inducements to absurd heights. No land was too steep or too poor to put under the hoof.

Then, without ceremony and without mercy, the Rogernomics Labour government in 1984 ripped away the supports. Conditions down on the farm were dire for many. Gorse reclaimed marginal land. Any farmer who since then has staked investment on the strength of government say-so knows the risk.

Westco Lagan is another example. This 110-job company invested heavily in rimu processing equipment on the strength of the West Coast Accord which assured a supply of rimu logs in perpetuity and was, the High Court said in 1995, a contract. Westco Lagan cannot convert to pine without heavy expense.

The company wants compensation. But the government has inserted into the bill abolishing the West Coast Accord a clause denying anyone a right to compensation. The only potential claimant is Westco Lagan.

This, the company’s lawyer, Jack Hodder, argues, runs counter to the Magna Carta of 1297, one of the foundation stones of our constitution. Mr Hodder, who is a leading legal authority, sought as a last resort an injunction to stop the Clerk of the House presenting the bill to the Governor-General for signature.

Why has Mr Hodder, who is usually a sceptic of such longshot constitutional pirouettes, done this? Because the parliamentary committee, which is due to report on the bill on 24 August, is most unlikely to accede to Westco Lagan’s entreaties.

Why is that? Because the government, which, with the Greens, has a majority on the committee, is adamant Westco Lagan should not have compensation.

Why won’t the government relent?

In short, because it reckons Westco Lagan took on a commercial risk when it relied on the West Coast Accord and the government does not compensate businesses for losses due to commercial risk.

But what was the risk? "Industry participants must have appreciated the real possibility of further shifts in government policy," Pete Hodgson wrote to the company.

Be thereby warned. Get into bed with the government and you are snuggling up to an elephant. If the elephant rolls over, you get squashed.

The government is not an equal partner. Maori found that quite soon after the Treaty of Waitangi was signed. Ultimately, a partnership with the government is on the government’s terms. The government represents the people and the people’s sovereign will must prevail over any individual’s or group’s special interests, including property rights.

So partnership with the government is unequal and risky. The most solemn commitments by one temporary tenant of the Beehive can be shredded by the next.

Apply this to the tangled local government saga that has had the media palpitating this week.

Local Government New Zealand has been promised partnership with and expanded powers for local councils. This is a big prize for the councils.

But to stitch together a genuine partnership requires high professionalism and a high commitment on both sides.

That one or other – and sometimes both – of these qualities has been lacking in important figures on both sides (though not in either Helen Clark or Carol Stigley) has been laid starkly bare this week.

Louise Rosson’s passionate enthusiasm and desire for a cosy relationship with ministers clouded her judgment. Sandra Lee’s slowness to get momentum in developing the main legislative changes has frustrated the professionals on both sides.

The "partners" have much to learn yet.