Week in Politics: Labour sorts out a muddle of its own making

3:44 pm on 2 December 2022
Jacinda Ardern

Prime Minister Jacinda Ardern was not aware of the SOP passing, Peter Wilson writes. Photo: RNZ / Samuel Rillstone

Analysis - Entrenching a clause in the Three Waters legislation drags Labour into an embarrassing controversy of its own making, National doubles down on raising the retirement age and a visiting prime minister has to face "inane questions" at a press conference.

On Wednesday night last week, with Parliament sitting under urgency, Labour and the Greens voted through a 60 percent entrenchment clause in the Three Waters bill preventing the privatisation of water assets.

It set a very important precedent because entrenchment has only ever been used to protect constitutional law, not public policy.

And hardly anyone noticed, including the prime minister.

It was an amendment, called a supplementary order paper (SOP), proposed by the Green's Eugenie Sage.

What it means is that there's a new obligation in the bill to keep water assets in public ownership, and overturning that would need the votes of 60 percent of Parliament's 120 MPs.

The SOP was passed without Prime Minister Jacinda Ardern or the Leader of the House Chris Hipkins knowing, and the significance of what had happened wasn't picked up by opposition MPs either.

It wasn't until Victoria University Associate Law Professor Dean Knight sounded alarm bells with a tweet at the weekend that senior politicians started taking notice.

That was followed by eight constitutional experts releasing an open letter warning the government that a dangerous precedent was being set.

The implications were obvious - if the Three Waters amendment stayed in place any government could put a 60 percent entrenchment clause into just about anything, making it difficult if not impossible to overturn.

At her press conference on Monday Ardern said the concerns expressed in the open letter were legitimate, but she talked around the problem saying entrenchment needed to be "broadly" discussed and Parliament's Business Committee would take it up and "resolve the issue".

RNZ's political editor Jane Patterson said in her Power Play article that while Ardern and Hipkins didn't know what was going on, Local Government Minister Nanaia Mahuta knew exactly what was happening because she spoke in support of the amendment in the House at the time.

As more light was thrown on what happened, it transpired that the government had considered a 75 percent entrenchment and sought cross-party agreement but National wasn't interested.

In her SOP Sage lowered it to 60 percent, and when it was put to the House it was voted through.

It was Sage lowering it to 60 percent and then putting it to a vote, which can happen at short notice, that blindsided senior ministers.

She couldn't keep the 75 percent because that would have required the support of 75 percent of MPs, not possible without National, but Labour and the Greens could muster 60 percent.

When a law is entrenched, it has to be supported by the same percentage of MPs as it affects - 75 percent entrenchment needs an affirmative vote of 75 percent of Parliament.

Patterson said the problem sat with Labour. "Why did the most senior ministers in the government not know this particular provision was going to be put to the House (and pass), but also why was the case not made to the public before steaming ahead, and the rationale laid out?" she asked.

The Herald's Thomas Coughlan said the prime minister clearly realised a mistake had been made.

"Ardern is currently weathering the embarrassment of admitting the criticism made by legal experts was correct and admitting she had no knowledge of what her party had been voting on in Parliament," he said.

"What actually happened: poor party communication leading to the accidental undermining of a constitutional norm."

Coughlan thought sending the problem to the Business Committee was "slightly ridiculous".

He's right. The Business Committee can't fix this.

The entrenchment clause is going to have to be taken out the bill, and there lies the government's problem.

Bills can only be changed during their committee stage, and the Three Waters bill has passed that stage and is now set down for its third reading which will pass it into law.

The only way out is to re-commit the bill, send it back a stage and hold a vote to remove the clause.

National's shadow leader of the house Chris Bishop said the Business Committee couldn't do anything about it.

"They've made a mistake, entrenchment is totally inappropriate for public policy matters like this," he said.

The government should return the bill to its committee stage and remove the clause, Bishop said. National would propose a motion to make that happen.

Sage's motivation appears to have been to demonstrate the Green's very strong opposition to water assets ever being privatised and stop any future government going down that track.

Given the uproar over just taking water assets out of council control, privatisation would be political suicide for any government.

With Parliament in recess this week the government's plight was widely reported and dominated the news.

The Business Committee meets on Tuesday.

Sanna Marin and Jacinda Ardern

Photo: RNZ / Marika Khabazi

Finland Prime Minister Sanna Marin and Prime Minister Jacinda Ardern held a joint press conference this week

Other developments this week

On Tuesday Retirement Commissioner Jane Wrightson released a report recommending the retirement age should stay at 65.

She said any increase would further disadvantage women, Māori and Pacific people.

The government again committed itself to not changing the age, which left National's leader Christopher Luxon to answer questions about what his party would do.

He confirmed it would change the age, telling Morning Report it needed to be done.

"Every decade people live 1.3 years longer," he said. "It's not an unreasonable thing and other countries have already adopted 67 as a retirement age."

In other media interviews Luxon said National's policy was the same as it had been under former prime minister Bill English. The age increase would be phased in, starting in 2037.

That's a long way away, probably distant enough for Labour to think it's not worth trying to make it an election issue.

Finland's Prime Minister Sanna Marin visited this week and Stuff reporter Bridie Witton was clearly incensed by what she called "not-so-subtle sexism" and "inane questions" at a joint press conference with Ardern.

"The first questions lobbed at Marin were not about the war on her doorstep, nor her bold decision to apply for NATO membership," Witton said.

"She wasn't asked about her handling of the Covid-19 pandemic, or what she and Ardern could do to better help women facing brutality and persecution in Iran or Afghanistan.

"Instead… Ardern was asked a series of inane questions. These included whether they were meeting 'just because you're similar in age and have a lot of common stuff there'."

Ardern had an answer to that. "I wonder if anyone asked Barack Obama and John Key if they met because they were a similar age?"

Marin is 37 and Ardern 42. When Obama and Key first met they were both 48.

Former party leader Peter Dunne had some interesting observations about the impact of the Reserve Bank's decisions.

His article was published by Newsroom and was titled 'Reserve Bank just landed final blow to Labour's election hopes'.

In it he said many commentators had suggested the NZRB's decision to create a recession next year to counter inflation had probably sealed the government's fate.

"This raises the potential irony of the statutorily independent Reserve Bank acting in a way that directly influences the country's future political direction and the shape of the next government," he said.

"Adding to the irony is that the Reserve Bank's statutory independence was established in 1989 to stop the central bank being used to suit the whims and political convenience of the government of the day."

Dunne recalled that before the floating of the New Zealand dollar in 1985, Sir Robert Muldoon often joked that the exchange rate was set simply by his telephoning the governor and telling him what it should be.

"Establishing a statutorily independent Reserve Bank with overall responsibility for monetary policy were deliberate steps to shift New Zealand away from the capricious chicanery that had characterised those earlier years and led the country to the brink of financial collapse in 1984," Dunne said.

"The bank will no doubt argue it has acted solely in line with its legislative mandate, and any political consequences are neither its concern nor its responsibility.

"That is certainly true as far as the letter of the law is concerned, but the bank is not so naïve as to be blind to the wider consequences of its decision.

"The Reserve Bank has been either extremely courageous or foolhardy."

*Peter Wilson is a life member of Parliament's press gallery, 22 years NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire.

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