The Government’s backdown over the entrenchment proposal for the Three Waters prohibition on privatisation was inevitable.
But it opens up a debate on New Zealand’s unwritten constitution which the Government may not welcome.
Every constitutional lawyer who commented in public on the entrenchment clause opposed it, including the former Labour Prime Minister, Sir Geoffrey Palmer.
The Leader of the House, Chris Hipkins, is now referring the question of entrenchment more generally to the Standing Orders Committee.
This would imply that the decision by Labour and the Greens to insert the entrenchment clause in the first place was a consequence of inadequate procedural rules.
But ultimately, it was a political decision made possible by the fact that whoever is the Government in New Zealand is, in effect, an elected dictatorship.
As long as the Government has a majority within the debating chamber, it can more or less do what it likes.
“Too often, political sovereignty means executive sovereignty,” Sir Geoffrey told POLITIK.
That much was amply demonstrated during the 1975 – 84 Muldoon National government when Sir Robert Muldoon was able to impose measures such as a total wage and price freeze using a draconian piece of empowering legislation already on the statute books, the Economic Stabilisation Act, 1952.
The freeze did not even need to go before Parliament. It was simply imposed after what was reported to have been a three-minute discussion in a Cabinet Committee and a perfunctory endorsement by the Cabinet as a whole,
Sir Geoffrey and the Lange government repealed the Stabilisation Act in 1987 along with the 1932 Public Safety Conservation Act, which had been used to give the Holland National Government dictatorial powers during the 1951 waterfront dispute.
But though those pillars of executive power have been demolished, Sir Geoffrey argues that the executive still holds sway.
And, in part, he blames Parliament for that.
“This was, I’m afraid to say, another example of an increasing tendency to scrutinise things inadequately by the Parliament, and that has been present for quite some time now,” he told POLITIK.
“If you take the fact there were 29 people in that Parliament who are Ministers or a Speaker who cannot really be instruments of account, we’re talking about accountability.
“It is what Parliament’s main job is, and that amounts to scrutinising the legislation, studying it, asking questions about it and reporting on it.
“And that is the job of the parliament, not the executive.”
The Parliament — which means MPs — failed on the entrenching issue.
Five Opposition MPs, Chris Penk, Mark Cameron, Andrew Bayly and Penny Simmonds, and Simon Watts, spoke after Green MP Eugenie Sage had introduced her Supplementary Order paper, which required that there be a 60 per cent majority within the House to agree to the privatisation of a water entity.
She had been very plain about what she was doing.
She was moving an amendment that would require a 60 per cent majority in Parliament to repeal a clause in the Bill which prohibited the privatisation of any water entity assets of infrastructure.
Ironically, according to Sir Geoffrey, it would be possible to repeal the whole Bill (which National had pledged to do) by a simple majority in Parliament.
Sage told Parliament that while there was no current appetite to priovatise water assets, this could change in the future, as we had seen when National privatised electricity assets.
“So while there was certainly advice to the select committee that normally entrenched provisions relate to constitutional matters, water is essential to life, so it is of sufficient importance that these services are maintained in public ownership,” she said.
The Minister of Local Government, Nanaia Mahuta, was not quite so dismissive of the contrary advice.
“There is a high constitutional threshold to be reached to put such a threshold within the legislation, and often it’s on constitutional matters—of which this bill is not—and it would be a novel approach to include an entrenchment clause,’ she said.
Mahuta said that the Government had written to every party in the House, but they did not agree.
“We know that while this particular Supplementary Order Paper (SOP) order paper may not pass the constitutional threshold, there is a moral obligation from people who believe that privatisation should not occur to support that particular SOP.”
Opposition MPs missed the constitutional significance and instead quickly dismissed the proposal as irrelevant.
“There’s not a hope in dickens that that’s (privatisation) going to take place,” said National MP Andrew Bayly.
“And so you don’t need the clause, Minister; it is a waste of time because it is never going to be able to be privatised under the current arrangements.”
National MP Penny Simmonds didn’t refer to it at all; not did ACT MP Mark Cameron or, remarkably, the Shadow Attorney General, Chris Penk.
Sage dismissed Bayley’s objections.
“When the Electoral Act was first passed in 1993, provisions in that were entrenched,” she said.
“Even though Parliament can’t bind future parliaments, it is that moral power that an entrenchment provision has—that it’s a strong signal in this Bill, that it represents the will of New Zealanders. “
But constitutional lawyers like Palmer argue that the Electoral Act is one thing; a bill on sewerage, stormwater and freshwater infrastructure is another thing altogether.
Entrenchment in practice means (theoretically) that a measure is beyond Parliament.
In effect, it becomes something akin to a written constitution.
It was first introduced in 1956 to entrench the electoral act. But Sir Geoffrey believes it requires some rigid rules.
“If you’re going to entrench something so the majority can’t get its way, you have to have practical sanctity; that is to say, there’s got to be some legitimate way of ensuring that this is a proper thing,” he said.
“So either you do it by 75% majority, or you do it by referendum of the people, which is what the provision in the Electoral Act has always required.”
Entrenchment has been proposed for the Bill of Rights Act to ensure that the rights exist “above” Parliament.
When he introduced the original legislation in 1990, Sir Geoffrey proposed entrenchment.
But in an article for the July 2022 New Zealand Law Journal, he said those proposals foundered on the doctrine of orthodox parliamentary sovereignty.
“It was opposed even by the New Zealand Law Society,” he wrote.
“The mix proved too rich for a country with ingrained conservative, even colonial, constitutional traditions.”
Thus in a sense, Mahuta and Sage were playing with constitutional fire.
However, the matter is not ended.
First, the offending amendment will have to be removed from the primary legislation.
“It was a mistake to put the entrenchment clause in, and the Government will fix the issue as soon as the House resumes on Tuesday,” the Leader of the House, Chris Hipkins, said yesterday.
“We will do this by sending the Water Services Entities Bill back to the Committee of the Whole to remove the entrenchment provision.
“The Bill has just finished committee stages, so we can easily send it back and fix the issue before the final reading.
“The intention to protect assets from being sold was right, but entrenchment usually requires a supermajority or seventy-five per cent of the Parliament to vote for it.
“The approach in this amendment allowed an entrenchment provision to pass in a way that is not typical for Parliament. That has wider ramifications that we are not comfortable with. That’s why we will fix the issue.
“It’s also important Parliament strengthens the rules around entrenchment generally to avoid this in the future.
“As such, we will refer the wider matter to the Standing Orders Committee, where all parties are represented, in order to strengthen the protections for entrenchment provisions.
“We will ask the Committee to look at where entrenchment provisions are appropriate and what majority should be required for them. “
This could open up broader issues; for example, the Treaty of Waitangi is not entrenched within New Zealand law.
Palmer goes further and believes the time is ripe for a reform of Parliament package
“We haven’t had one for many years,” he said.
There has been no substantial reform since the 1980s.
However, whether a government that has been politically burned by the events of last week and which must fight an election next year is brave enough to take on Parliamentary reform is a moot point.