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Our constitution and crony capitalism

  • June 12th, 2013

Kathryn Ryan on Nine to Noon this morning followed up the constitutional issues raised by my firm's recent opinion work for the Green Party.

I thought her questions nailed the issues.  Whether the Sky City deal is good or bad is not material, and I did not opine on that. Nor does the opinion suggest that there has been any dishonesty by anyone.

As a lawyer and as a citizen I believe in the advantages of an 'organic' constitution. But it makes the slippery slope steeper. If the government seems oblivious to stacking up bad precedents constitutionally  that could build support for unfortunate constitutional tinkering after Prof Burrow's review group reports.

 Our constitution relies on conventions and respect for written and unwritten rules that constitute behavioural bottom lines. High quality Ministers in the Lange government built good fences against crony capitalism – developing a strong sense of shared understanding of what is, and is not, done around here. It became easy to distinguish New Zealand from countries as similar as Australia, because of the lack of return for businesses seeking political favours. Corruption became practically unthinkable.

Now it is not clear where the bottom lines are the next deal could go further. The next SkyCity type counter party would be a mug if it does not push or test officials and the government to see how far they might go in giving private concessions no-one can really value.  What was unthinkable has become worth testing.

Even if it is the best deal for the purpose of getting the convention centre built, corrosion of those protective expectations is collateral damage.

Unfortunately the Warner Bros Hobbit deal contributes to that concern. To a constitutional lawyer that would not have been at all reprehensible, except for confining the benefit of the law changes to the industry and party they did the deal with. The circumstances should have persuaded them there was a problem with the law. Competent adults should not be able to renege on independent contractor arrangements for which they are paid, by claiming to have an employee's protection from not having the contract continue. So the law change should have been of general application.

Once there is a perception that our law or political favour is for sale, there is plenty of scope for it to operate.

In the  opinion I touched on the lack of protection in our constitution against corrupt use of powers to confer privileges (and to punish financially) without Parliamentary (or court) oversight. We have good procedural protections against casual misuse of powers to tax, and to spend tax money on favourites. But there is next to no protection, for example, against vast wealth transfers by way of regulatory privilege or detriment.  That happens under the RMA, I think mostly without corruption, but  it is mainly because of habits of honesty, not structural protection if our public morality erodes.

I raised this generic risk in Parliament when the ETS regime was under debate. A corrupt Minister could make or break friends or enemies whose competitive position depended on emission credits. The first scheme gave great discretionary patronage powers to those deciding  who would get the credits supposed to protect and reward for exceptional circumstances. Even as legislated there are still few safeguards.


  • paul scott
  • June 16th, 2013
  • 10:32 pm

from Stephen

” Kathryn Ryan on Nine to Noon this morning followed up the constitutional issues raised by my firm’s recent opinion work for the Green Party.”

a man of many colours, where is the true colour

  • clairbear
  • June 18th, 2013
  • 10:20 pm

I understand where you are coming from – but not all people think like you do – I come from an upbringing where as New Zealanders – you do what it takes, if a job needs doing – get stuck in. I remember my father in the days when the schools his children were at (Catholic) needed money; they needed working bees to get things done then needed money to pay for the things that needed to be done. In those days running raffles for certain things was illegal, but they got together and ran these raffles anyway – they got the money for the school. Some of the people that helped out also seemed very respectable – but my God father was a bookie or an Entrepreneur as they call them in those days, and gave lots of his ill gotten gains to help out in for the same good purpose.

So to me all the evil that seems to be thrown John Key’s way I think it is somewhat misplaced. I believe he has seen that we need to progress and has just jumped in trying to help. No it is not all wrapped in purity but there is a whole lot of Kiwis that have been brought up with this attitude. Chances are he will not be successful as looking at the polls for everyone person that supports him there is one that doesn’t

But yes I guess we need laws – that is what I like about the French – to be a civilised country you must have laws – but it is not necessary to follow them all.


I agree Claire. It is just that when taking the kindy kids out walking on thin constitutional ice there should be obvious and extra special care to show that you are not crashing along.

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