John Key’s resignation is a big political deal. He has been one of New Zealand’s most consistently popular Prime Ministers for 8 years. In my view, he has done a remarkable job of combining popularism with the conservative values of his political party, National. He has also been required to establish cross‑party support for legislative proposal in the House, which is no small feat. There are many valid reasons to disagree with his personal and policy positions on a range of issues, but he has been uncommonly successful in a very demanding role.
This blog is not intended to be a forum for political commentary, but Key’s resignation is such big political news that it has prompted me to think about his record in constitutional terms. Eight years is a long time to be at the top of the political ladder, and simply the passage of time means that there have been a number of constitutional difficulties and successes in that time. Below I set some of these key constitutional matters out. The intention is not to criticise or venerate. Better in the first instance, I think, to simply acknowledge that these things have happened, and are important.
Canterbury earthquake legislation: Following the devastating earthquakes in Canterbury in 2010 and 2011, the government passed legislation delegating significant power to Ministers. This included the ability to suspend or modify the operation of legislation by lower forms of regulation making that do not have the same democratic checks placed on them. The legislation was of such constitutional moment that 27 legal academics from New Zealand and overseas (although the overseas based ones tended to be New Zealanders as well) wrote an open letter to the government in protest. Such powers when further than were needed and violated the constitutional expectations that we have around good government process.
Of course, governments do have to take action in emergency situations to get aid to those in need and prevent further harm. In some respects, emergencies can and do justify a departure from usual constitutional process. What the earthquake legislation highlighted is that there is no firm expectation in New Zealand about what is appropriate or inappropriate in these extreme circumstances. Late this year, Parliaments Regulations Review Committee has issued a report on these matters. Some way after the initial concern was raised, we appear to be moving towards more broad‑based agreement on the constitutional implications of emergencies.
Use of urgency: Urgency is a procedure that allows a government to pass legislation very quickly without going through the usual considerations and checks to determine if the legislation really is a good idea or if it can be improved in some way. It ensures that government policy is enacted quickly, by leaves a less than perfect legislative product in many cases. The Key-led government arguably overused urgency in its early years, continuing a tradition started by the Clark‑led Labour government. This potential abuse of legislative procedure has long been a concern for constitutional (and even political) commentators.
The reliance on urgency has been less since 2011 when the Standing Orders (the rules dictating how Parliament operates) were amended to provide for extended sitting hours. This is a positive development, but many questions over the use of urgency remain. A popular government, with a large number of seats in the House, can use urgency more often to avoid select committee (and therefore public) scrutiny of its proposed laws. This has been an area influx under John Key, and it will be interesting to see how it develops in the near future.
Partial privatisation: The partial privatisation of state‑owned assets was one of the big policy successes of Key’s government in his second term. By promising to retain a majority shareholding in the companies being sold, public opposition to privatisation was overcome. However, this approach did not obviate the need to address the constitutional issues involved, particularly the Treaty of Waitangi. Unfortunately, that is largely what the government did in the first instance.
Iwi has argued successfully in the past that they have a Treaty interest in state assets, and privatisation can interfere with that interest. Once the government realised that this was true of the power generation companies it planned to sell part of, it began consultation with iwi groups and included a legislative clause to protect Treaty interests. This clause become the subject of Supreme Court litigation, which confirmed and updated the existing expectations that government cannot ignore, and in fact must actively protect, iwi interests based on the Treaty. In my view, this was a very positive example of Parliament and the Courts working in tandem to address very difficult constitutional issues.
Sky City deal: The Key government’s policy of building a ‘New Zealand International Convention Centre’ in Auckland led to arrangements between the government and Sky City – a large casino operator – that has caused significant comment. One issue was that there was no objective tender process for awarding the contract to Sky City, which led to accusations of bias and favouritism. While these serious allegations have not been sustained, there is no doubt the process could have been handled better.
More significantly to my mind was the nature of the deal. In exchange for building and operating the convention centre, Sky City sought regulatory relief from the government in the form of an extended licence for larger numbers of gaming machines. The licences were to last many decades into the future, reflecting the time it would tale Sky City to earn a fair return on the infrastructure it was building, and legislative changes were made to reflect the arrangement. The contractual documents provide for significant penalties to be paid by the government is the commitment to extended licences is not maintained. While a future government has the ability to remove the licences by enacting new legislation, there are provisions in the government’s contract with Sky City that make this undesirable.
This situation is completely novel in New Zealand, and raises important questions about the (lack of) separation between government (who did the deal) and Parliament (who passed the legislation) as well as the ability for a government to fetter the ability of a future Parliament to act according to its own democratic mandate (usually considered to be something a government can’t do in New Zealand). These are issues that will continue to play out over time, and keep constitutional scholars both interested and busy.
These are, I think, four important things that happened under Key during his time as Prime Minister. As we celebrate or critique Key’s record as a politician on personality and policy grounds, let’s not forget the indelible influence his government has had on our constitutional framework. Personalities change, and policies can be reversed. Constitutional matters often resonate long after a Prime Minister has left the political arena. Perhaps now is an opportune time to start to get to grips with the constitutional situation Key’s government has left us in.