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Oliver Hartwich

What happens when good governance becomes the enemy

Oliver Hartwich
New Zealand’s Beehive and Parliament House. Picture: Hagen Hopkins / Getty Images.
New Zealand’s Beehive and Parliament House. Picture: Hagen Hopkins / Getty Images.

Something odd is happening in New Zealand. The government wants to pass a law that would require ministers to explain their regulatory decisions. That is it. ministers would simply need to show how new rules stack up against basic principles like clarity and fairness.

Yet somehow, 88 per cent of public submissions on this modest ‘Regulatory Standards Bill’ – nearly nine out of every ten – have condemned it.

Critics call it “anti-Māori”, although it says nothing at all about indigenous rights. They claim it threatens democracy, though parliament remains fully sovereign. They fear it imposes a radical ideology, though it merely asks for transparency. What is really going on?

Back in 1998, New Zealand ranked second in the world for regulatory efficiency. Today, according to the OECD, it sits in 20th place.

This matters to everyone. Poor regulation can raise living costs, hold down wages and slow down everything. When building consents take six months instead of six weeks, house prices rise. When new medicines face years of approval delays, patients suffer.

David Seymour, the Minister for Regulation, believes he has a way to restore regulatory efficiency. His bill would create a framework requiring ministers and government departments to follow clear principles when making rules and regulations, being precise about their objectives and showing they respect property rights. They would have to issue statements explaining how their rules serve the public interest.

If they chose to ignore those principles, they would have to say why.

An independent board would review these statements and report its assessment to the relevant Parliamentary Select Committee. Its assessments would be non-binding. Parliament could ignore all its findings. No court could strike down a law because of this Bill. Democracy would carry on as before.

David Seymour believes he has a way to restore regulatory efficiency. Picture: David Rowland / AAP
David Seymour believes he has a way to restore regulatory efficiency. Picture: David Rowland / AAP

It is not dissimilar to fiscal rules that are already in place. New Zealand governments must justify their spending against agreed benchmarks. Nobody claims those rules threaten democracy. Yet the regulatory equivalent has provoked a bizarre backlash.

Reading the submissions, you would think Seymour had proposed abolishing elections or installing himself as dictator. His critics conjure nightmares in which indigenous rights are erased, the environmentlaid waste and corporations run amok. Many insist the Bill addresses a problem that does not exist.

Poor regulation, a problem that does not exist? That might surprise the OECD.

So why has a transparency measure caused such outrage? Much of the blame lies with New Zealand’s intellectual elite, who have mounted a campaign mixing confusion with what looks very much like deliberate distortion.

Take a recent paper by five academics. Among them is Sir Geoffrey Palmer, a former Prime Minister and constitutional lawyer. Andrew Geddis regularly comments on legal matters in the media. Michael Baker became a household name during Covid as a public health expert.

When public figures like this speak, New Zealand listens. That makes their errors disturbing and dangerous.

Their paper claimed the bill “excludes any reference to promoting public health or human wellbeing”. In fact, it explicitly requires considering whether “the public interest requires that the issue be addressed”.

They warned that businesses might claim compensation for health regulations. But the Bill allows compensation only when the government directly takes property.

These are not subtle differences of opinion. They are basic misunderstandings of the text.

Even more worrying than the errors themselves are the values they reveal. Nowhere is this more concerning than in their opposition to the principle that “every person is equal before the law”.

Let that sink in. In 2025, respected intellectuals are seriously arguing against legal equality. Their reasoning? Some laws affect people differently. And yes, sure: Rich people, for example, must pay more tax. Therefore, they conclude, prescribing a principle of legal equality would be “problematic”.

But that is to confuse equal treatment with equal outcomes. Legal equality means the law applies impartially to everyone. A millionaire and a minimum-wage worker face the same tax rules, even if they pay different amounts. This is first-year law school material.

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It is bad enough that academics would bundle such a basic concept. It is even more alarming that they would openly oppose the principle of ‘equality before the law’.

The same goes for property rights. For centuries, secure property has protected ordinary people against the powerful and the state. It prevents governments from taking your home on a whim. It ensures that what you earn remains yours.

To these intellectual critics, however, asking governments to justify taking property amounts to siding with big business.

Strip away the rhetoric, and here is what the critics are saying: Forget principles like equality before the law. Avoid transparency that might embarrass ministers. Impose no obligation on them to explain why they are taking what belongs to you. Just trust the people in charge, politicians and bureaucrats, to do the right thing.

History shows how this inevitably unfolds. Clever people argue that old-fashioned ideas like limited government hold us back. They say individual rights must give way to the greater good. And then things go wrong. As they always do.

Australians should pay attention. The same arguments echo through Australian universities. Next time you hear an academic dismiss equality before the law as outdated, or say property rights hinder progress, or argue governments must be freed from old constraints – remember New Zealand.

Remember how its intellectual establishment turned almost 90 per cent of public submissions against a Bill that asks for nothing more than transparency.

There is some irony here. Academics require rigorous peer review before publishing a journal article. Yet when similar scrutiny is proposed for law-making – scrutiny that could expose weak reasoning or bad policy – they recoil. The same professors who insist on evidence-based research dismiss reforms addressing OECD-documented failings as solutions to problems that “do not exist”.

Minister Seymour deserves credit. It takes courage to press ahead when 20,000 submissions cast you as democracy’s enemy. Especially when all you are asking for is honest, open government.

This is not just a legal debate. It is about the principles that make free societies function.

The bill’s opponents have thus done us one favour, albeit inadvertently. They have shown us, without disguise, which side they are on. They stand with the state’s power, unchecked by principle or transparency.

Those who value liberty know where that path leads. Thank goodness some still have the courage to resist.

Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative (nzinitiative.org.nz).

Oliver Hartwich
Oliver HartwichContributor

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Original URL: https://www.theaustralian.com.au/commentary/what-happens-when-good-governance-becomes-the-enemy/news-story/507252fa6891ecd4db46dc748fcedecb