You see it on TV and in movies all the time: a hero – Eleven from Stranger Things, Rey from Star Wars, Harry Potter from, y’know, Harry Potter – overcomes evil using sheer determination. Often, they’ll hold out their hand, half-clenched, contort their face, find hidden reserves of strength within themselves and bend reality to their will. Politicians like to indulge in this fantasy, assuring us they – unlike their weak and dithering predecessors – have the bravery and drive to make good on their commitments.
In her upcoming Budget, Finance Minister Nicola Willis will promise better public services, a return to government surpluses by 2029 and (fingers crossed) economic growth.
But the government’s greatest liabilities are superannuation, health, education and law and order. The first is untouchable so long as Winston Peters glowers at Willis from across the cabinet table, and she’s committed to increased spending on the others. How can she have any hope of returning the books to surplus?
In her pre-Budget speech on April 29, the Finance Minister proudly explained she had undertaken a significant savings drive, identifying spending decisions made by previous governments and re-evaluating them. In theory, this is a noble undertaking. One of the criticisms of successive New Zealand governments has been the tendency to treat each Budget like an iceberg, paying attention to the mostly trivial payments and cuts announced each year – presented as “winners” and “losers” in Budget media coverage – without considering the vast, submerged commitments frozen-in from decades of previous Budgets, or whether they deliver any value.
So, what savings have Willis and her tireless Associate Finance Minister, David Seymour, found? Willis would not rule out reducing state KiwiSaver payments (if so, this will probably depress long-term growth – economists routinely blame low productivity partly on our poor savings regime).
She then announced she wouldn’t play the rule-out game any more. We would have to wait and see.
A week later, we saw. Act MP Brooke van Velden unveiled “changes to improve the pay equity process”. This will retrospectively define pay equity claims, and raise the threshold for female-dominated occupations to make a claim of pay inequality on the grounds their jobs have been historically undervalued due to sex-based discrimination.
The change will also discontinue existing claims, even if they meet the threshold set by the new legislation.
The amendments to the Equal Pay Act are being rushed through Parliament under urgency, without any select committee scrutiny. The coalition claims to worry about the quality of existing law – Seymour has created an entire new Ministry of Regulation based on the premise that poor-quality legislation degrades the nation’s productivity.
In practice, it is very fond of the Macbeth approach to law-making: “If it were done when ‘tis done, then ‘twere well it were done quickly.”
Prime Minister Christopher Luxon celebrated the billions of dollars this will take off the government’s books. Seymour praised van Velden for “saving the budget”.
This column a fortnight ago condemned the coalition’s retroactive changes to financial laws to reduce legal liability for the banks. Now, we have a retroactive change to employment law, depriving hundreds of thousands of New Zealanders of their legal rights, so Willis can keep a line about returning to surplus in her Budget-day speech.
Pandora’s box
Like many governments around the world, our coalition is looking at the fiscal and economic constraints entangling it like coiled nets of barbed wire and finding these cannot be overcome with sheer willpower. It is comparing those constraints to the norms and conventions of free-market liberal democracy, which seem like insubstantial wisps of silk, effortlessly brushed aside, then congratulating itself for its bravery and brilliance in observing how easy politics becomes if you tear up a commitment to a coherent legal system.
Van Velden’s justification for this is that she thinks the current law is poor. But the convention against retroactive law exists because if one government decides to breach it – nullifying the laws passed by its predecessors – then its successor can do the same.
The unions would love to pass retroactive legislation opening New Zealand employers up to court action over health and safety laws; the Greens could do the same for environmental protections: they could declare that the government’s fast-track projects lack any legal standing and rush that through under urgency. Te Pāti Māori would like to redefine existing property claims, returning privately owned land around the nation back to iwi and hapū.
High-risk strategy
The coalition is making a bet the next government will not be as reckless as it is. If it is wrong, investment will become impossible, because companies will not know whether legal decisions they make today could be deemed unlawful after the next election.
It may have calculated this change will be too abstract for most voters to grasp; that once passed, it will fall out of the news cycle.
The change will primarily affect women on lower wages – a demographic not likely to vote for them in the first place. That cuts both ways, though. National is heavily reliant on Willis to appeal to women voters who have a low opinion of Christopher Luxon, and she often uses rhetoric about delivering for workers. She has seen working class voters shift to the right in other democracies and clearly wants to bring about a similar change here.
But now, Labour has a weapon against her that it will continue to wield long after the Budget coverage has died away.
And – as with the Treaty Principles Bill – Act has again presented the Prime Minister with a proposal that could have profoundly destabilising consequences.
Luxon has cheerfully, obliviously told them to go right ahead. It’s often easier to be brave when you don’t know what you’re doing.
