Monday, 4 October 2021

Free Press, 4 October 2021


The Haps

ACT’s COVID 3.0 Plan has been widely reported to a positive reception. It says the Government must accept its approach of sporadic eradication has failed. The lockdowns are no longer short nor sharp, and a new way forward is required. That means a deadline, after which the country reopens. There should be clear objectives reducing transmission, hospitalisation, and death from COVID-19 now that it is out in the community. Every sector of society should be invited to help achieve them collaboratively. The full report is ACT’s third paper on COVID, and available here.

From incompetent to dangerous

For a long time, we thought the Labour Party was incompetent. Kiwibuild was designed to fix the wrong problem (the shortage is of sections to build on, not actual buildings). It was as disastrous as we predicted. The same could be said of their child poverty reduction ideas or their absurdly wasteful bike bridge among many others. All these ideas showed incompetence.

But Labour’s latest legislation has taken them from incompetent to dangerous. The COVID-19 Response (Management Measures) Legislation Bill and the COVID-19 Public Health Response Amendment Bill (No 2) are quite different from any other post-Muldoon legislation. That’s why this week’s Free Press is focused on these bills.  

We say it’s worth understanding what it does, how it was introduced to Parliament, and why it does damage no future Government will be able to reverse. It damages confidence in the country’s underlying institutions in a way only time may heal. Even the oil and gas exploration ban, silly as it may be, did not apply to exploration permits already granted. It said that no new ones would be granted.

The first bill is divided into eight parts, each one making changes proposed by a different Government department. Some of them are innocuous enough, such as the Department of Internal Affairs’ amendment to let charities run lotteries electronically under lockdowns.

The part we’re concerned about is the Ministry of Justice’s changes to the Property Law Act. It says: “A fair proportion of the rent otherwise payable by the lessee for that rental period will cease to be payable…” if there’s an epidemic and the public health measures prevent them from using the property.

What’s significant about this legislation is that it applies to rental contracts signed long ago. Governments of different stripes have passed good and bad laws through Parliament, but they have always applied onto to future actions. It’s difficult to overstate the importance of laws only applying to future actions.

Retrospective legislation means you cannot plan your future. You can be found guilty of doing something that wasn’t illegal when you did it. You might have a contract, but Parliament can change its conditions after the fact. Lawmakers might be tempted to ‘go after’ people who have certain arrangements. It is banana republic stuff that makes it riskier to do what makes a country wealthier: Save and invest today to get bigger rewards tomorrow.

The way it’s been passed is worse. It is being rushed through under urgency with only two weeks for the public to make submissions and MPs on Select Committee to consider changing the bill in response. In other words, there is no genuine democratic process, just Parliament as a rubber stamp under Labour’s majority.

And it gets worse still. It will apply from the day it was introduced to Parliament, the 28th of September. Usually, Governments wait until Parliament passes a law to apply it. They are governing by announcement like in a tinpot dictatorship instead of a liberal democracy.

The COVID-19 Public Health Response Amendment Bill (No 2) has a provision that’s arguably worse than the Property Law changes. It says that the Director General of Health can “requir[e] the owner or any person in charge of a specified laboratory that undertakes COVID-19 testing to …deliver or use, in accordance with directions given under the order, specified quantities of COVID-19 testing consumables that the Minister considers necessary… and …undertake COVID-19 testing solely for the purposes of the public health response to COVID-19”

In other words, if you’ve invested in laboratory technology to do COVID tests, the Government can simply requisition your assets for its purposes. The irony is that labs who’ve been desperate to sell the Government saliva testing may now get their wish in the form of an offer they cannot refuse. Again, this legislation makes it less attractive to save and invest in New Zealand.

This law will be rushed through with a six week Select Committee. Better than two weeks, but the standard time is six months.

Secure property rights protected by the rule of law are essential to prosperity. When the Government changes contracts you’ve already signed by fiat and requisitions your property with laws rushed through Parliament as little more than a rubber stamp for Labour’s majority, we all suffer.

Our prosperity depends on being a first world country where the future is predictable and property rights are secure. A future Government can reverse these laws, but it cannot restore the trust lost by unpredictable lawmaking. That’s why this Government has gone beyond an incompetent Government and become a dangerous one doing irreparable damage to the very institutions our prosperity depends on.

The sooner they are gone, the better for everyone.