Stop-gap solutions not enough in local government
First it was ECan. The failure to produce a regional water allocation plan, the general inertia that had come of years-long divisions between elected representatives, and lobbying by regional mayors, had finally moved the Government to intervene.
Now it's the Christchurch City Council. With relationships between councillors at a visible low, and longstanding question marks over the capacity of officials to manage local needs, Government has again stepped in. If the appointment of Commissioners worked for ECan, perhaps it would do the same for the City Council.
It's a move that Local Government Minister Nick Smith has been reluctant to take - and with good reason. The Government may harbour real concerns about the implications of local body dysfunction for Christchurch's recovery, but replacing local as well as regional representatives with Government appointees is not a good look. It also does sufficient violence to the principles of local democracy that any responsible government would pause. The trains may be made to run on time, but at what political cost?
In the post-quake environment the balance to be struck is a delicate one. It is hoped that the appointment of former Nelson Mayor, Kerry Marshall, as Crown Observer to the Christchurch City Council will be all the intervention required to get the councillors refocused. The appointment was announced on Tuesday by Nick Smith, having earlier obtained the City Council's agreement on receiving this central government oversight. But even this modest step has attracted criticism and Smith remains alive to the views of local democracy advocates that warts-and-all councils should just be left to get on with it.
This was the sentiment of the Local Government Act 2002. A logical expression of the then Government's social democratic model, the legislation was intended to ensure that Government's macro-economic agenda took better account of the needs and aspirations of local communities. The emphasis was on a more collaborative approach to social and economic planning, and participatory democracy. And the jewel in the Crown of the legislation was the power of general competence. Doing away with the prescriptive model of local governance, the legislation allowed local authorities to decide for themselves what activities they would undertake - subject of course to local consultation. The relationship with central government was never to be one of equals, but local authorities would nonetheless have considerable discretion to meet perceived local needs.
But as Canterbury and now Christchurch has shown, the capacity of local bodies to deliver against this ideal is far from clear. Christchurch's ills are far from isolated and no lesser authority than the Auditor-General has expressed concern about the quality of regional governance elsewhere. Add to this the penchant of councillors to undertake social experimentation in the face of primary statute, the fondness for vanity projects with an apparent disregard for economic circumstance, and doubtful checks offered by historic lows in local election voter turnout, and we are left with some serious questions about whether local authorities have what it takes to do other than what they're permitted to do.
The clock is already ticking on regional government's continued management of large scale resources. Now, 10 years on from the Local Government Act 2002, it may be timely to review the capacity of local government to execute its functions, many of which impact directly on the country's social and economic weal.
Māori Party’s political power play
The current imbroglio over the sale of shares in SOEs may appear as a crack surfacing between the Māori Party and National that could become a chasm. Only time will tell, but there is likely to be a legal solution to the Māori Party's concerns about recognising Treaty principles under the new ownership framework, and the party has a lot to lose if it walks away from the Government.
The public flare up is better seen as a political play by the Māori Party to steal the march on its political competitors, especially Labour, beating them off the block to emphasise the centrality of the Treaty and warn National not to underestimate its relevance to the SOE share sales policy. By coming out strong, the Party has reminded its support base that it has an independent voice, there is distance between it and National, and has played into the long -term aspirations of iwi who want to invest in the companies.
The actual legal issue about how the Treaty principles affect SOEs (or, more accurately, affect how the Crown manages its SOEs), and how they might apply to these companies once they are only partly Crown-owned, has of course got lost in the political noise. A solution can likely be found that National is comfortable with, but with the Māori Party reinforcing its credibility after supporting a Government with an assets sales policy that it opposes.
Government-iwi consultation on partial SOE sales
The Government has announced that it will hold a series of hui to consult with Māori on the legislative changes required in order to implement its mixed ownership model in four energy sector state-owned enterprises (Genesis Energy, Meridian Energy, Mighty River Power and Solid Energy).
Currently, the four SOEs fall under the purview of the State Owned Enterprises Act 1986 which obliges the Crown to deal with SOEs in a manner consistent with the principles of the Treaty of Waitangi. The Government is seeking submissions on its proposal to remove the four SOEs from the SOE Act and put them under new legislation that ensures the Government retains at least 51 per cent and other individual shareholdings are limited to 10 per cent.
The Government's proposals have been met with criticism from the co-leaders of the Māori Party and from Mana Party Leader Hone Harawira. Both parties are urging iwi to oppose the new legislation on the basis that it does not contain any Treaty of Waitangi clause. All of this comes at a time where the Government will be seeking to appear sympathetic to Māori views on the eve of Waitangi Day.
Assurances that an equivalent to section 27 of the SOE Act (which requires land subject to a potential Treaty claim to have a memorial on its title) will be included in new legislation have been dismissed by opponents of the Government's proposal on the basis that it fails to guarantee Māori consultation when water rights are in dispute, an issue over which the Crown and Māori groups are anticipated to draw battle lines in the near future.
Consultation on the partial asset sales will begin next week with the focus of debate expected to trend heavily towards the question of Treaty principles. The nine consultation hui will conclude on 15 February, and written submissions on the Government's proposal to have the four SOEs put under new legislation are due by 22 February.
The consultation document can be found here.
Re-cap of the Government's priorities
Last week Prime Minister John Key gave a public address in which he identified areas the National Government would be prioritising over the next three years. The Government's priorities are to:
- responsibly manage the Government's finances;
- build a more competitive and productive economy;
- deliver better public services; and
- rebuild Christchurch.
The Prime Minister's speech had a strong economic focus. This was hardly surprising given that National's election campaign centred on what the Party called its "120-point economic action plan". Action points to be carried out by the Government in the upcoming legislative term include:
- Implementing the Mixed Ownership Model reform, by selling shares in Air New Zealand, Genesis, Mighty River Power, Meridian and Solid Energy, but ensuring that the Crown keeps a 51% shareholding.
- Introducing legislation to bring competition to the ACC work account.
- Amending the RMA to have six-month time limits on consenting medium-sized projects.
- Introducing a competitive new system for processing oil and gas exploration permits.
- Comprehensively reforming benefits by creating new benefit categories and requiring a greater proportion of beneficiaries to make themselves available for work.
Joint Ministerial meeting in Australia
Prime Ministers John Key and Julia Gillard met in Melbourne last week to attend the second joint meeting of Australian and New Zealand Cabinet Ministers. The first was held in Sydney in 2009. The Prime Ministers agreed to conduct regular joint meetings in future, at least once in the term of each government.
Items discussed by Ministers at the joint meeting included:
- A new Defence Relationship Framework for setting priorities, holding regular strategic discussions, and promoting cooperation on capability development in the area of defence and security.
- Enhancing reciprocal sharing of criminal history information, consistent with the free movement of people across the Tasman.
- Climate change: working towards linking the Australian and New Zealand emissions trading schemes.
- Continuing cooperation: streamlining trans-Tasman travel, establishing a joint therapeutic products agency, cooperating on tobacco controls and continuing to promote a joint bid to host the Square Kilometre Array, the most powerful radio telescope ever built.
- Regional and global affairs: consulting on refugee resettlement and applying respective quotas, resisting economic protectionism, promoting enhanced regional cooperation through the East Asia Summit, APEC and the Pacific Islands Forum.
Further, it was agreed at the joint meeting that the Productivity Commissions of each country would conduct a joint scoping study to identify ways of increasing productivity and competitiveness, and strengthening economic cooperation between Australia and New Zealand. The Commissions will produce a report by December this year, for consideration by the leaders in 2013, which is the 30th anniversary of the Closer Economic Relations agreement between the two countries.
FMA seeks views on guiding financial product disclosure
The Financial Markets Authority (FMA) has released a request for feedback on its new guidance note for financial product disclosure. The FMA is proposing to bring in new guidelines for securities issuers, directors and their advisers, to replace the current system of pre-vetting prospectuses and investment statuses.
The FMA seeks responses from interested parties to questions relating to the efficacy and clarity of product disclosure, as well as feedback on what key business and financial information should be included in the new guidelines. It is hoped that the new guidelines will avoid what the FMA sees as the present problems of jargon, verbosity, misleading information and "a templated approach" to financial information.
Specifically, the consultation paper singles out KiwiSaver, debt securities, property and cash-box entity products as requiring further guidance. Those who operate in these sectors should be particularly aware of any new guidelines the FMA is seeking to impose, particularly in light of new disclosure requirements currently being considered by Parliament in the Financial Markets Conduct Bill.
Submissions on the consultation paper are due by 9 March. A copy of the consultation paper can be viewed here.
New Reserve Bank Governor
Alan Bollard announced this week that he will not be seeking a third term as Governor of the Reserve Bank when his current term ends in September this year.
Chairman of the Reserve Bank, Arthur Grimes, said the Board will search within New Zealand and abroad to find an appropriate successor. Former Governor Don Brash told Radio New Zealand that it would be inappropriate for someone other than a New Zealander to be appointed as a deep understanding of the New Zealand economy is essential in this role.
Potential New Zealand candidates include:
- Deputy Governor Grant Spencer.
- Assistant Governor John McDermott.
- Former Deputy Governor Adrian Orr (current CEO of the New Zealand Superannuation Fund)
- Former Acting Governor Rod Carr (current Vice-chancellor of Canterbury University). Carr was Acting Governor between Don Brash and Alan Bollard.
Finance Minister Bill English will make the appointment on the Board's recommendation.
Alan Bollard's announcement comes during intense global debate about the role of monetary policy and a country's central bank. In 2010 the Labour Party called for a wider range of tools to be available for the Reserve Bank's use in controlling inflationary pressures. Recently heightened interest in macro-prudential policies, demonstrated through the likes of the Reserve Bank's recent consultation on Basel III capital adequacy standards, suggest that new tools may yet be added to the Reserve Bank's anti-inflationary kit.
National makes its first big overseas investment decision
An application by a subsidiary of Chinese company Shanghai Pengxin to buy 16 farms formerly owned by the Crafar family was formally accepted last week. The deciding Ministers (Land Information Minister Maurice Williamson and Associate Minister of Finance Jonathan Coleman) followed the recommendation of the Overseas Investment Office (OIO) to accept the application.
In a joint statement, the Ministers announced that all criteria under sections 16 and 18 of the Overseas Investment Act 2005 (relating to the requirements for overseas investments in sensitive land and in significant business assets) had been satisfied.
The OIO reached the opposite conclusion in December 2010, when it recommended rejecting a bid by a Hong Kong-based company to buy the farms due to concerns that assessment of the applicant's "good character" (required under section 16) could be affected by ongoing Serious Fraud Office investigations and a bankruptcy proceeding linked to the applicant and its associates.
The approval of Pengxin's bid is additionally notable as the bid was subject to new investment rules that took effect from 13 January 2011. Under the new rules, the OIO must additionally consider the extent to which Zealand's economic interests will be promoted by the overseas investment, and whether New Zealanders will be, or are likely to be, able to oversee or participate in the overseas investment. Pengxin's stated intention of having the farms managed by New Zealand Government-owned Landcorp has been cited by the OIO as increasing the likelihood that the expected benefits to New Zealand will occur.
The sale to Pengxin arguably marks National's first major decision on foreign investment, which may motivate it to be more public and active in its support of the benefits of foreign investment, in the face of more intense opposition to such sales from other political parties.
The sale is currently being challenged by a rival bidder, a farming consortium led by Sir Michael Fay. The consortium has applied for a judicial review of the decision, with Pengxin agreeing not to settle the sale in the meantime.
The new Parliament has now reinstated all Bills that lapsed with the dissolution of the previous Parliament.
Bills Awaiting First Reading
Administration of Community Sentences and Orders Bill
Building Amendment Bill (No 4)
Child Support Amendment Bill
Citizenship Amendment Bill
Commerce (Cartels and Other Matters) Amendment Bill
Companies and Limited Partnerships Amendment Bill
Consumer Law Reform Bill
Corrections Amendment Bill
Crown Minerals (Protection of Public Conservation Land Listed in the Fourth Schedule) Amendment Bill
Defence Amendment Bill
Depleted Uranium (Prohibition) Bill
Domestic Violence Reform Bill
Electronic Identity Verification Bill
Environment Canterbury (Democracy Restoration) Amendment Bill
Financial Markets Conduct Bill
Gambling (Gambling Harm Reduction) Amendment Bill
Game Animal Council Bill
Geneva Conventions (Third Protocol-Red Crystal Emblem) Amendment Bill
Health and Safety in Employment Amendment Bill (No 2)
Heritage New Zealand Pouhere Taonga Bill
Human Rights Amendment Bill
Hutt City Council (Graffiti Removal) Bill
International Finance Agreements Amendment Bill
Local Electoral Amendment Bill
Medicines Amendment Bill
Members of Parliament (Remuneration and Services) Bill
Mokomoko (Restoration of Character, Mana, and Reputation) Bill
New Zealand Geographic Board (Ngā Pou Taunaha o Aotearoa) Amendment Bill
Ngā Rohe Moana o Ngā Hapu o Ngāti Porou Bill
Ngai Tāmanuhiri Claims Settlement Bill
Ngāti Mākino Claims Settlement Bill
Prisoners' and Victims' Claims (Redirecting Prisoner Compensation) Amendment Bill
Privacy (Information Sharing) Bill
Register of Pecuniary Interests of Judges Bill
Shop Trading Hours Act Repeal (Waitaki Easter Trading) Amendment Bill
Smoke-free Environments (Removing Tobacco Displays) Amendment Bill
South Taranaki District Council (Cold Creek Rural Water Supply) Bill
Standards and Accreditation Bill
Statutes Amendment Bill (No 3)
Subantarctic Islands Marine Reserves Bill
Bills to Select Committee
Open for submissions
Bill |
Select Committee |
Submissions close (2012) |
Report due (2012) |
Victims of Crime Reform Bill |
Justice and Electoral |
17 February |
29 February |
Natural Health Products Bill |
Health |
24 February |
29 February |
Submissions closed
Bill |
Select Committee |
Report due (2012) |
Arms Amendment Bill (No 3) |
Law and Order |
29 February |
Crown Entities Reform Bill |
Government Administration |
29 February |
Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill |
Local Government and Environment |
29 February |
Legal Assistance (Sustainability) Amendment Bill |
Justice and Electoral |
29 February |
Manukau City Council (Regulation of Prostitution in Specified Places) Bill |
Local Government and Environment |
29 February |
Marine Reserves Bill |
Local Government and Environment |
29 February |
Marine Reserves (Consultation with Stakeholders) Amendment Bill |
Local Government and Environment |
29 February |
Non-Bank Deposit Takers Bill |
Finance and Expenditure |
29 February |
Spending Cap (People's Veto) Bill |
Finance and Expenditure |
29 February |
Student Loan Scheme Amendment Bill |
Finance and Expenditure |
29 February |
Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill |
Finance and Expenditure |
29 February |
Bills Awaiting Second Reading
Antarctica (Environmental Protection: Liability Annex) Amendment Bill
Arms (Military Style Semi-Automatic Firearms and Import Controls) Amendment Bill
Arts Council of New Zealand Toi Aotearoa Bill
Building Amendment Bill (No 3)
Children, Young Persons, and Their Families Amendment Bill (No 6)
Commerce Commission (International Co-operation, and Fees) Bill
Consumer Guarantees Amendment Bill
Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill
Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill
Fair Trading (Soliciting on Behalf of Charities) Amendment Bill
Food Bill
Housing Corporation Amendment Bill
Identity Information Confirmation Bill
Inquiries Bill
Insolvency Practitioners Bill
Juries (Jury Service and Protection of Particulars of Jury List Information) Amendment Bill
Lawyers and Conveyancers Amendment Bill
Legislation Bill
Māori Trustee and Māori Development Amendment Bill
Military Manoeuvres Act Repeal Bill
Ngā Wai o Maniapoto (Waipa River) Bill
Ngāti Manawa and Ngāti Whare Claims Settlement Bill
Ngāti Pāhauwera Treaty Claims Settlement Bill
Ngāti Porou Claims Settlement Bill
Patent Attorneys Bill
Patents Bill
Public Health Bill
Radio New Zealand Amendment Bill
Regulatory Reform (Repeals) Bill
Regulatory Reform Bill
Regulatory Standards Bill
Reserves and Other Lands Disposal Bill
Search and Surveillance Bill
Sentencing (Aggravating Factors) Amendment Bill
Social Assistance (Living Alone Payments) Amendment Bill
Social Security Amendment Bill (No 3)
Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill
Statutes Amendment Bill (No 2)
Sustainable Biofuel Bill
Taxation (Income-sharing Tax Credit) Bill
Taxation (International Investment and Remedial Matters) Bill
Therapeutic Products and Medicines Bill
Trade (Safeguard Measures) Bill
Trustee Amendment Bill
Bills Awaiting Third Reading
Airports (Cost Recovery for Processing of International Travellers) Bill
Alcohol Reform Bill
Biosecurity Law Reform Bill
Cultural Property (Protection in Armed Conflict) Bill
Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill
Employment Relations (Secret Ballot for Strikes) Amendment Bill
Gambling Amendment Bill (No 2)
National Animal Identification and Tracing Bill
Road User Charges Bill
Royal Society of New Zealand Amendment Bill
Climate Change (Unit Register) Amendment Regulations 2011
Customs and Excise (Specified AANZFTA Parties—Indonesia) Amendment Order 2011
Deposit Takers (Funding Conduits) Exemption Amendment Notice (No 3) 2011
Judicial Salaries and Allowances Determination 2011
Securities Act (Directors' Certificates—Collective Investment Schemes) Exemption Notice 2011
Securities Act (Multiple Participants Superannuation Schemes) Exemption Notice 2011
Securities Act (Translated Advertisements) Exemption Notice 2011
Tariff (Specified AANZFTA Parties—Indonesia) Amendment Order 2011
Parliament will resume next week, with Opposition parties getting their first chance of the year to attack the Government in Question Time on Tuesday.
Occupiers justifiably booted out
Auckland Council v Occupiers of Aotea Square
Auckland District Court, 21 December 2011, CIV-2011-404-2492
On 21 December 2011, Judge Wilson granted an injunction giving the Occupy Auckland community 48 hours to vacate Aotea Square. Putting the political and social agitation surrounding the movement aside, the decision is another useful example of the impact of the New Zealand Bill of Rights Act on bylaws.
An application had been made by the Auckland Council under the Local Government Act 2002, which allows an injunction to be granted to restrain a person from breaching any bylaw. The Council claimed the Occupiers had breached eight bylaws relating to offences in public places. This was not disputed.
The Occupiers' reply was instead that the bylaws were unenforceable. The Local Government Act provides that "no bylaw may be made which is inconsistent with the New Zealand Bill of Rights Act". The Occupiers claimed that their removal from the Square was contrary to their rights of freedom of expression, freedom of association, and freedom of peaceful assembly.
However, the rights protected by the Bill of Rights Act are not absolute, and may be subject to "such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society" (section 5).
A similar challenge to a bylaw failed in the Auckland District Court in Auckland City Council v Finau [2002] DCR 839. In that case, the Council successfully sought an injunction requiring the removal of various signs Mr Finau had erected on his residential property. The Court considered whether the bylaw really restricted Mr Finau's freedom of expression, and if so, whether it was demonstrably justified.
Judge Wilson's enquiry was a little more thorough. He asked:
- Is the objective of the perceived problem that the bylaw seeks to address important and significant?
- Is the bylaw proportionate to that objective?
- To achieve that objective, did the measure interfere as little as possible with the rights and freedoms accepted?
All three questions were asked in the affirmative, allowing the bylaws to be consistent with the Bill of Rights Act and be enforceable. The Judge was critical of the Occupiers' assertion of dominion over the Square, and saw "the maintenance and protection of public spaces for use by all [as] an important and significant duty of local government". He felt that their removal had a rational connection to this objective and was no more than necessary to secure it.
On the face of the injunction the door remains open for groups to protest within the Square, so long as they do not bring with them any installations or go so far as to reside there.
The full judgment can be accessed here.
Who |
What |
By when… (2012) |
Ministry of Agriculture and Forestry |
Review of Fonterra's farm gate milk price setting |
24 February |
Review of the Raw Milk Regulations |
24 February |
Review of the regulatory regime to accompany Fonterra's Capital Restructuring |
24 February |
Biosecurity New Zealand |
Draft IHS for Table Grapes from Peru |
5 March |
Department of Conservation |
New listing of the threatened status of New Zealand vascular plants |
10 April |
Electricity Authority |
Proposed amendments to Electricity Information Exchange Protocols |
2 March |
Decision-making and economic framework for transmission pricing methodology review |
24 February |
Creating additional fields in the registry |
7 February |
Financial Markets Authority |
Guidance Note: Effective Disclosure |
9 March |
Food Standards Australia New Zealand |
Low THC Hemp as a Food |
15 February |
Food derived from Herbicide-tolerant Corn |
27 February |
Food derived from Herbicide-tolerant Soybean |
6 March |
Inland Revenue Department |
Whether income that is deemed to arise under tax law, but not trust law, can give rise to beneficiary income |
17 February |
Treatment of quad bikes for depreciation purposes |
2 March |
Interpretation of anti-avoidance sections of the Income Tax Act 2007 (sections BG 1 & GA 1) |
31 March |
Department of Labour |
Agriculture Sector Action Plan to 2013 |
29 February |
Support Adventure Website and Guidance Tool |
30 April |
Reserve Bank |
Extending Reserve Bank Liquidity Policy BS13 to overseas bank branches |
30 March |
Standards New Zealand - Joint Draft Standards |
Electrical equipment for mines and quarries |
3 April |
Veneer and plywood |
28 March |
LP Gas fuel systems for vehicle engines |
26 March |
Boxes and enclosures for electrical accessories |
13 March |
Connecting devices—Electrical copper conductors |
13 March |
Radio equipment and systems |
12 March |
Telecommunications installations |
5 March |
Personal eye protection |
13 February |
Treasury |
Iwi consultation on mixed ownership for SOEs |
22 February |
Who |
What |
By when… (2012) |
Department of Conservation |
Kauri National Park proposal |
tbc |
Canterbury draft guidelines for aircraft access |
Ongoing |
Ministry of Justice |
Family Court Review |
29 February |
Law Commission |
‘New Media’: Rights, Responsibilities and Regulation in the Digital Age’ |
12 March |
Reserve Bank |
Covered bonds |
16 March |
Standards New Zealand - Joint Draft Standards |
Personal eye protection |
13 February |
