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Insights 39: 18 October 2024
Newsroom: Dr Oliver Hartwich on Rutte's role in shaping NATO's future
 
Research Report: Who Makes the Law? Reining in the Supreme Court, by Roger Partridge
 
Podcast: How merging mayor and CEO roles transformed local government

Who makes the law?
Roger Partridge | Chairman and Senior Fellow | roger.partridge@nzinitiative.org.nz
Picture a country where unelected judges, not elected politicians, make the laws. Where courts rewrite statutes they do not like and reshape long-standing legal rules based on their views of ‘society’s changing values.’ Sound far-fetched? The New Zealand Initiative’s latest report – of which I am the author – shows this scenario is becoming a reality in New Zealand.  

“Who Makes the Law? Reining in the Supreme Court” examines how our Supreme Court has strayed beyond its proper constitutional role. The report argues that the Court has adopted a dangerously loose approach to interpreting statutes, sometimes even ignoring Parliament’s clear language. More and more, it is also reshaping common law principles to align with judges’ views of society’s changing values. 

The report argues that the Supreme Court has lost sight of basic constitutional principles - the separation of powers, parliamentary sovereignty, and the rule of law.

This judicial activism has serious consequences. It weakens the democratic legitimacy of our laws and makes them less certain and predictable. When courts reinterpret legislation and reshape common law principles, people and businesses can no longer rely on clear statutory wording or stable precedents. That strikes at the heart of the rule of law. By blurring the line between the courts’ role of judging disputes and Parliament’s role of making law, the Court also risks politicising the judiciary. 

A growing chorus of legal scholars echoes these concerns. In his foreword to the report, Oxford University’s Kiwi Professor of Law and Constitutional Government Richard Ekins KC warns that the Supreme Court’s new legal method risks unsettling the balance of our constitution. 

To address this troubling trend, the report recommends several options for Parliament to reassert its constitutional authority and rein in judicial overreach. These include targeted legislation to overturn problematic court decisions, amendments to key statutes to impose ‘guardrails’ against judicial overreach, and reforms to judicial appointment processes. 

Critics may argue that an activist judiciary protects rights and acts as a check on bad laws. But that argument misconstrues the nature of our democracy. It would enable unelected judges to overrule the will of voters expressed through Parliament. That would weaken our democracy and make the law less certain. 

The report argues we face a constitutional crossroads. Will we allow rule by judicial decree, or will Parliament restore the balance between judges and elected lawmakers?  

The tools to restore balance exist. Parliament should use them. 

Roger Partridge’s research report, Who Makes the Law? Reining in the Supreme Court, was published 15 October. 

Opening to investment
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
BusinessDesk’s Pattrick Smellie had the best synopsis of New Zealand First’s announcement on foreign direct investment this weekend: “it was less important for what it said than for the fact that Peters said it.” 

The Overseas Investment Act has placed New Zealand among the developed world’s least hospitable climates for foreign investment.  

Other countries recognise investment as a benefit to be sought. Investors do not just bring capital to places where it is desperately needed, though that would be boon enough. They also bring expertise from other markets that help boost competitiveness.  

New Zealand’s regulatory regime instead treats foreign investors like criminals seeking parole. Are they worthy of being allowed to mingle with locals? Unsurprisingly, investors often conclude that a small market at the far end of the world beset by consenting challenges is not worth the hassle.  

It is far more to our cost than theirs. Kiwi commentators regularly bemoan a lack of access to capital, less-than-competitive markets, and high costs. An unfriendly investment regime contributes to all those ills. 

The incoming government’s coalition agreement promised to liberalise the foreign investment regime. Politics within the coalition government have made that tricky. 

At New Zealand First’s conference this past weekend, Peters suggested that he saw ways of enabling foreign investment consistent with his Party’s concerns.  

The precise details of his proposal were difficult to understand.  

Peters offered Singapore’s sovereign wealth fund Temasek as a laudable example to follow. But Temasek issues bonds rather than encouraging investors to take on an equity stake to ride along with the fund’s investments.  

Foreign investors are already allowed to invest in New Zealand government debt, whether national or local.  

And Singapore is generally open to foreign direct investment as well.  

Hence Smellie’s conclusion: the details of the policy announcement, which presumably have yet to be thoroughly developed, matter less than the announcement itself. The coalition may have found a way through its internal politics towards a more liberal and enabling solution.  

It will be worth watching. Foreign investment rules even came up in the Commerce Commission’s market study into retail grocery as a barrier to entry that blocks potential competition.  

New Zealand has a wealth of investment opportunities and insufficient resources to go it alone. Not treating foreign investors like criminals would be a welcome change.  

Absurd Beehive theatre
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
It is a Monday afternoon in Wellington. Journalists gather in the Beehive’s theatrette for the weekly post-cabinet media briefing. The Prime Minister enters. 

Prime Minister: Good afternoon, everyone. Today, I’d like to make a few simple statements about New Zealand. Firstly, New Zealand is in the South Pacific Ocean. Secondly, the kiwi is a flightless bird native to New Zealand. And finally, Wellington is New Zealand’s capital city. 

Media: Prime Minister, you say New Zealand is in the South Pacific. Can you give us the exact coordinates? 

PM: Well, New Zealand spans several degrees of latitude and longitude. 

Media: So, you’re refusing to pinpoint our nation’s location? What are you hiding? 

PM: I’m not hiding anything. New Zealand is a large country. 

Media: Prime Minister, your coalition partner recently suggested that New Zealand could be towed closer to Australia. How do you respond to that? 

PM: I don’t think anyone has seriously suggested that. New Zealand’s location is fixed. 

Media: Are you saying your coalition partner is lying? Is there a rift in the Government? 

PM: No, that’s not what I’m saying at all. 

Media: Sources close to Cabinet say you’ve been secretly funding flying lessons for kiwis. Is that why you’re emphasising their flightless nature? 

PM: What? No, kiwis are naturally flightless. 

Media: So, you’re admitting to discrimination against flightless birds? Isn’t that divisive? 

PM: I don’t see how that’s relevant. 

Media: Prime Minister, in your maiden speech you mentioned enjoying Auckland. Have you done a U-turn on your support for Wellington as the capital? 

PM: No, I enjoy both cities. Wellington is still the capital. 

Media: A simple yes or no, Prime Minister: Will you resign if kiwi birds start flying tomorrow? 

PM: That’s an absurd hypothetical. 

Media: You’re dodging the question! What are you afraid of? 

PM: I’m not afraid of anything, it’s just not a realistic scenario. 

Media: Are you willing to commit to a referendum on moving the capital to the Chatham Islands to boost their economy? 

PM: Look, I think we’re getting off track. Today, all I wanted was to present you with three basic facts about our country. If there are no further questions, I’ll wrap things up here. 

Media: [Collective gasp] Did you just say “facts” and “today”? Are you implying that everything else you’ve told us so far has been fiction? 

PM: No, that’s not what I … 

Media: BREAKING NEWS: PM admits to years of government fabrications! 

 
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