Photo: VNP / Daniela Maoate-Cox
This week the government introduced a bill with outcomes that, while not unprecedented, are rare.
It will change what was legal in the past.
The retrospective bill is a response to a court finding the crown has unlawfully clawed money back from beneficiaries. The law will make those actions legal in the future, but also in the past.
The case at issue, simplified, involves people who while waiting for ACC cover, receive welfare support from the Ministry of Social Development (MSD).
If ACC later provides a backdated payment, it reimburses MSD for main benefits paid out during that time. However, MSD has also required individuals to repay any supplementary assistance they received during the same period. The High Court found that this was not supported by existing legislation.
Outlining the bill to the House, the Minister for Social Development, Louise Upston, said: "Retrospective legislation isn't standard; however, it is an important public interest for this longstanding policy intent to be accurately reflected in the law and to mitigate any flow-on financial and operational impacts."
Under New Zealand's constitutional framework, governments make law (through parliament) and courts interpret it. The Crown is bound by a judicial interpretation of the law, until the law changes. However, Parliament is sovereign. MPs can amend any statute and in rare cases, those amendments are made retrospective.
One of the foundational principles of legislation is that it operates prospectively: people should know the rules before they act. Retrospective lawmaking reverses that principle by altering the legal consequences of past conduct. It leads to concerns about fairness and legal certainty.
For those reasons, governments tend to use it sparingly. In the rare cases that it is used, opposing politicians tend to warn about straying down a slippery slope to a reality in which no legality is certain.
For example, in 2021, debating the first reading of a Labour government bill that had retrospective elements, Chris Bishop said: "This is retrospective legislation … I'm telling you now, there are going to be potentially, learned law professors and other scholars who are interested in this stuff who are going to turn up and castigate the government for the retrospective nature of the legislation. Parliament does not retrospectively legislate very often, and we only do so normally with a very good reason."
Now, with his own party in government, the responsibility for justifying retrospective change lies on his own side of the House.
Here is Upston again, speaking on Tuesday: "I acknowledge that retrospective legislation is not standard. However, Parliament is entitled to amend legislation in light of judicial decisions and I consider it in the public interest for policy intent to be accurately reflected in the law. To be clear: the bill confirms longstanding policy intent and operational practice; it does not create new policy or change MSD's treatment of clients in any way."
On this occasion Labour supported the current bill at first reading, possibly because they had also presided over the ministries affected by the bill in previous administrations.
Willie Jackson said: "The more you earn, the less support you get. That's a fundamental rule when spending dollars on welfare. This legal ruling does create a double-dipping process that isn't in the best interests of everyone, and it's a decision that, when we looked at it, we thought that if we were in government, we would be looking seriously at it also. Double-dipping between MSD and ACC would undermine people's faith in the system, which is something we all need to avoid."
Te Pāti Māori and the Greens opposed the legislation.
Green MP Riccardo Menéndez March argued that retrospectively validating unlawful conduct was not the appropriate response to the court's finding: "I think the solution here is for the government to have a hard look at how they process ACC claims, about looking at the complexity of the systems, both welfare and ACC, that we've burdened people with, which makes those claims take ages, but also that people find themselves not being able to navigate those applications in the first place."
While Te Pāti Māori's Oriini Kaipara was more direct in her criticism of the retrospective element: "I mean, the nerve of the Minister and its government to put itself, once again, above the law; above legal rulings handed direct from High Court judges across the country that it applies retrospectively, validating past decisions…"
New Zealand's constitutional arrangements are such that Parliament is supreme. It gets the final word on what the law is.
Retrospective lawmaking is by no means illegal. But it is uncommon. So when it does appear, it tends to provoke debate: about fairness, about certainty, and about whether such power is best used to correct legal issues, or whether it risks reshaping the past in ways that set off constitutional alarm bells.
To listen to the audio version of this story, click the link near the top of the page.
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