After Labour’s vote plummeted from 50% to just 26.9% last year, it might have been expected that the party’s first conference in opposition would be more energetic and reforming. In working out a new way forward, the party organisation, activists, and MPs might have been expected to be focused on identifying what they got wrong and coming up with fresh new policies and positions to start turning things around for the next election.

The opposite occurred. Observers have painted a picture of a more lackadaisical party event, with the phrase “business as usual” often uttered. And so, the main outcomes from the weekend were the defeat of a radical proposal to adopt a wealth tax, a continued focus on fighting the Treaty Principles Bill, and the embedding in of Chris Hipkins as the leader to take Labour into the 2026 election.

This lackadaisical ethos has also been Labour’s approach in opposition over the last year. Hipkins, especially, has been lackadaisical in his public leadership, yet he has energetically built support for his leadership amongst the wider Labour membership and with his caucus—the Māori caucus in particular.

The Labour conference kills off a wealth tax proposal

It’s been reported that Labour’s conference voted to continue developing both a capital gains tax and a wealth tax, leaving the party’s Policy Council and MPs to decide on which tax reforms to take to the 2026 election.

The two policies – a capital gains tax (CGT) and a wealth tax (WT) – are mainly rival versions of ways to reform the tax system to make the wealthy pay more tax. The WT option is the more radical and leftwing option, and the CGT is more moderate and acceptable to business and the political right.

Although, in theory, the WT is still alive as an option, in reality, the conference killed it. The leftwing faction of the party, led by former Revenue Minister David Parker, had been campaigning under the name “Win the Wealth Tax”. Parker’s former press secretary, Vernon Small, reported in the Sunday Star Times that the group put forward an amendment in the debate, which was closed off to the media, proposing that “Labour back a wealth tax while investigating a CGT only as a ‘complementary measure’… But the amendment was defeated by about 55 to 45 per cent on the conference floor.”

Small reports that although both the CGT and the WT will continue to be considered, the latter is destined for defeat amongst Labour’s Policy Council and parliamentary caucus, both of which apparently lean strongly in favour of the more moderate tax reform. Small adds that “the weight of the 11 affiliated unions are thought to lean that way too.”

RNZ political editor Jo Moir also reports that the WT is effectively dead inside Labour after the weekend. She says that the more leftwing “anti-Hipkins brigade” lost all their fights relating to tax: “Remits to force the issue to be brought back to the party for sign-off, progressing just a wealth tax, and progressing a capital gains tax alone, all failed. As did a remit to make the leader, caucus and policy council consult before making any changes to policies in the party's election-year manifesto.”

Moir suggests that these losses were a significant victory for Hipkins and the rightwing of the party. She says: “RNZ understands the wealth tax remit was vehemently voted down, and the group of members behind it was the same group given a resounding no by the rest of the party over the captain's call remit.”

Veteran political journalist Richard Harman points out that Hipkins isn’t the only big player facing down the WT, saying that Finance spokesperson Barbara Edmonds and CTU economist Craig Rennie (also a member of the party’s Policy Council) campaigned against it.

Harman also notes that the leadership invited businessman Sam Stubbs (of the KiwiSaver, Simplicity Funds) to discuss such issues. He told the party activists: “I’m a firm believer in capital gains tax (widespread applause) but not a wealth tax; it’s a great idea, but it doesn’t work… On a capital gains tax, you would l be amazed how many business people want this to happen.”

Harman says that “Parker’s critics — and there are plenty of them at the top of the party organisation and in the Parliamentary wing — described the defeat as ‘humiliating’” for him and the left of the party.

One of those in Parker’s camp is former party president Nigel Haworth. Harman reports that Haworth posted on Facebook that the conference decision to delay a decision on deciding between a CGT and WT will have a conservative impact, undermining tax reform: “Delay makes selling any new policy to voters more difficult… Unless the Labour Party shows real purpose, a drift into a catch-up Capital Gains Tax seems the most likely outcome… Delay and conservatism go hand-in-hand.”

Other economic moderation

Vested interests and those on the political right might be happy enough that Labour has ditched David Parker’s WT proposal. But there were other economic issues in which a more centrist or orthodox path was chosen at the weekend, especially regarding infrastructure and the future of Kiwibank.

Labour is apparently looking to utilize the private sector much more, in terms of the ownership and management of new infrastructure, in a similar way to the coalition government. Harman reported from the conference that Finance spokesperson Barbara Edmonds “suggested there might be ways of bringing private capital into the Government, particularly for infrastructure and other capital projects.”

This is seen as making up for a decision to keep tax revenue low. And although Labour does not refer to it as “privatisation”, it’s another version of it under the orthodoxy of public-private-partnership (PPP). Businessman Sam Stubbs made a plea for such PPP arrangements under a future Labour government, saying, “Please, as a KiwiSaver manager who just wants to invest in the hood, give us stuff to invest in”.

BusinessDesk editor Pattrick Smellie reported that party members “seemed receptive to his pitch”. Edmunds also made it more palatable to Labour members by reconfiguring PPPs to include iwi businesses. The Herald’s Thomas Coughlan reports: “Edmonds was supportive of Stubbs’ idea of opening up infrastructure to outside partners. Edmonds would extend this to iwi, calling the proposal a partnership between public-private and iwi or PPI (pronounced pipi).”

Stubbs also pitched to Labour the idea of the partial privatisation of KiwiBank. BusinessDesk’s Smellie reported: “He also got a surprisingly enthusiastic reaction to the idea that Kiwibank should be recapitalised with private money ‘so they can take on the Aussie banks’.”

Labour’s focus on Te Tiriti

The other big focus for the Labour Party conference was on the fight against the Treaty Principles Bill. There was generally a strong message from the party leadership that Labour would stay strong on Treaty issues, fighting for co-governance, and for the establishment of Māori wards. The decision to use the conference to celebrate former Cabinet Minister Nanaia Mahuta also sent a message that Labour wasn’t backing away from its Treaty and ethnicity approach that progressed so strongly in the 2020-23 term in government.

Hipkins himself was staunch on the fight against the Treaty Principles Bill, explaining to the conference that the public expected him to take a “strong stance” on the issue. He also brought in Willie Jackson, co-leader of Labour’s Māori caucus, to give one of the conference's top slots, reiterating Labour’s determination to focus on te Tiriti and race relations.

Some commentators have expressed a surprise that Hipkins and Labour have taken this approach. After all, Treaty-related issues lost Labour a lot of its support when it plummeted to 26.9% of the party vote last year. Wasn’t Labour promising to now focus on the issues that working class or “middle” New Zealanders were concerned about, especially during severe economic hardship?

The Herald’s Thomas Coughlan was one of the journalists suggesting the use of Jackson at the conference was “surprising”. Coughlan points to various opinion polls showing that “the Treaty Principles Bill is actually quite popular” and that policies like Māori wards and co-governance are not.

The simple explanation is that for Labour activists, this is still what is popular. As 1News’ Maiki Sherman explained at the conference, “Labour Party t-shirts were available for purchase with the words ‘Honour Te Tiriti’ across the front, while flyers encouraged individuals to make a submission in opposition to the [Treaty Principles] Bill.”

Chris Hipkins was clearly not going to tell his activists that they were wrong or that the last Labour Government was wrong on anything. That would’ve been internal suicide. Ever pragmatic, Hipkins has been steely focused on retaining his leadership position, which means keeping onside with everyone, but especially the highly influential Māori caucus and activists.

As Chris Trotter wrote yesterday on the Interest website, “Hipkins’ political survival [is] resting squarely on the shoulders of Jackson and his Māori Caucus”. Trotter explains that although it might have seemed odd to give Jackson the “co-starring role at this year’s Labour conference”, it was about shoring up Hipkins’ support in the party. This also explains, Trotter argues, “why Labour’s leadership has chosen te Tiriti as the hill upon which the party is ready to die – a second time.”

Hipkins has embedded himself as leader

Chris Hipkins is clearly much more embedded as Labour leader than ever before. In fact, there now seems to be much more chance of Hipkins being Leader of the Opposition than Luxon leading the Government into the next election.

On this topic, Andrea Vance wrote in the Sunday Star Times: “No-one should underestimate Chippy’s killer survival instincts. He’s lasted the year with no major internal ructions. He avoided becoming a target, largely by being invisible.” She suggests that, over the weekend, Hipkins was focused 100% on winning over conference delegates. In contrast, unlike the usual tactics, there was no agenda to use the conference to win over the public or increase the party’s support.

In this way, Hipkins parallels the dreadful Benjamin Netanyahu, who seemed destined to lose his leadership a year ago. They are both great survivors. Not only have they endured in politics over the last year against all odds, but they have also become stronger.

In their entirely different ways, the two leaders have survived by tactically making decisions that strengthen their place amongst their narrow constituencies for short-term gain, even if these strategies have not been in the public interest, or even good for the political parties they represent. Of course, the two leaders are also victims of coalition dynamics – Netanyahu has to deal with extremists in his coalition, such as Ben-Gevir. Hipkins only has to navigate the likes of Jackson in Labour, and Rawiri Waititi in his nascent coalition partner.

Of course, the two parallels are tragically different in their outcomes, yet they both show how pragmatism can lead to less-than-ideal outcomes, even if it leads to politicians having a stronger hold on power.

In the case of Hipkins and Labour, it means that he’s overseeing a party that could be doing much more to hold the Government to account for its many shortcomings. It means that he’s forsaken using Labour’s major event of the year, in which they could’ve shown the public that they are learning from their past mistakes and finding a new and bold way forward.

Labour, like the US Democrats, has lost touch with the Zeitgeist

A number of commentators have expressed their disappointment or sense of exasperation with Labour after the weekend. BusinessDesk’s Pattrick Smellie, for instance, has written today about how, although Hipkins says he acknowledges the need for Labour to learn from its major defeat last year, in practice, he appears to be promising more of the same. He suggests that, like the Democrats in the US, Labour is still not connecting with the poor and working class.

In fact, Smellie says that Labour is falling short of the global zeitgeist for boldness: “Unless NZ politics is very different from other Western democracies, reheating old Labour nostrums and promising to restore flagship policies from a previous term is likely well short of the party being ready for a shot at the Treasury benches in 2026.”

Others on the political left are saying similar things. For example, blogger Steven Cowan has been scathing about Hipkins’ failure to learn anything from Labour’s major defeat last year, with the mistaken belief that only tinkering is required and Labour will be back in power.

Like Smellie, Cowan says Labour is offering nothing for the disillusioned and very little for the working class, as it continues on “its centrist course” with “a few liberal lollipops tossed in the direction to its middle-class base”. He says this won’t cut it: “it won't convince an angry, frustrated and disillusioned electorate that Labour is offering anything more than just ‘business as usual’. Again. If Labour is 'the party of the working-class' as Hipkins often likes to claim, then he needs to put his working-class policies where his mouth is.”

This continued approach to incrementalism may reassure the base but risks failing to inspire a broader electorate. To regain relevance and credibility, Labour must move beyond its centrist comfort zone and embrace transformative policies that address New Zealand’s pressing challenges.

The 2024 Labour Party annual conference in Christchurch was a critical opportunity for the party to reflect on its 2023 electoral defeat and reposition itself as a viable alternative government for the 2026 elections. Instead, Labour and Hipkins continued with their very deliberate lackadaisical strategy.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, Victoria University of Wellington

Key Sources

Thomas Coughlan (Herald): Chris Hipkins tells Labour NZ needs it to change – can it? (paywalled)

Steven Cowan: Chris Hipkins: Waving, not drowning

Richard Harman: Inside Labour’s difficult tax politics (paywalled)

Jo Moir (RNZ): Labour lays groundwork for election-year capital gains tax

Otago Daily Times: Editorial – Don’t pop the bubbles just yet (paywalled)

Maiki Sherman (1News): Taxes and Treaty on the agenda at Labour conference

Vernon Small (Sunday Star Times): Can Labour win on tax when it has failed before? (paywalled)

Pattrick Smellie (BusinessDesk): Labour and the danger of talking to yourself (paywalled)

Chris Trotter (Interest): Handling Democracy

Andrea Vance (Sunday Star Times): ‘We aren’t feral’: Just how can Chippy soothe Labour losers? (paywalled)

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Government officials have raised significant concerns about the University of Waikato’s ambitious proposal to establish New Zealand’s third medical school. The saga therefore continues as a battleground for competing perspectives within healthcare policy, education, and government.

The ongoing Waikato med school developments underscore the political stakes, financial concerns, and conflicting visions for addressing New Zealand’s doctor shortage, especially in underserved rural areas. This saga is as much about political influence, fiscal responsibility, and public accountability as it is about healthcare.

Government pushes ahead, despite criticisms

The proposal’s recent progression to a detailed business case, championed by Health Minister Shane Reti, reflects the National Party’s commitment to its election promise. During the 2023 campaign, National vowed to support a new $380m medical school in Waikato to increase the number of doctors, especially rural general practitioners. This promise came after Reti concluded negotiations with the Waikato’s Vice Chancellor, Neil Quigley, who emailed saying: “The first student intake would be 2027 – a present to you to start your second term in government!”

In late September this year, Reti announced that an initial cost-benefit analysis had been carried out and the results gave the Government “confidence” to push the project to the next stage, affirming that the school was essential for tackling New Zealand’s healthcare challenges. Reti emphasised that New Zealand’s rural and primary care networks face a critical shortage of practitioners, especially with many GPs approaching retirement over the next decade.

Newly-released information

Behind the scenes, however, officials have warned the Government about the problems of the Waikato project – especially in terms of financial viability. The Otago Daily Times’ Matthew Littlewood reports today:

“The government was advised a full two months before progressing a plan for a third medical school to the next stage that there were serious concerns whether the University of Waikato could afford to do it. The Tertiary Education Commission and the Ministry of Education advised Tertiary Education Minister Penny Simmonds on August 2 this year they had little confidence in a cost-benefit analysis of the project that relied on untested assumptions, had ‘significant gaps’ in financial data and did not fully consider alternative options.”

Also reporting on the Tertiary Education Commission (TEC) memo today, Richard Harman says: “A third financial risk has been redacted from the paper supplied” under the Official Information Act. Harman also reports from the memo that “the TEC might have to reduce funding to other university courses or even reduce the number of students at the Auckland and Otago Medical Schools”.

A second TEC briefing to the Tertiary Education Minister also expressed concern that Waikato wouldn’t be able to contribute its $100m share of the medical school’s establishment costs, as the University is struggling to maintain its existing buildings. The University is attempting to raise money from philanthropic funding, but TEC officials raised concerns about whether Waikato could secure these funds in time without resorting to large-scale borrowing, which would not be an option under the university’s current financial standing.

Despite these reservations, the project advanced, raising questions about whether the decision was motivated by political considerations rather than fiscal prudence or an impartial analysis of healthcare needs. The government has committed to moving forward with a detailed business case, led by the Ministry of Health, in collaboration with the University of Waikato.

Otago and Auckland’s strong opposition

The strongest opposition to the Waikato proposal comes from New Zealand’s two established medical schools — Auckland and Otago — which argue that Waikato’s plan is both inefficient and costly. These universities, backed by a recent PwC report they commissioned, contend that they could quickly increase their doctor training capacity without the need for a new school.

According to their PWC report, Auckland and Otago could scale up to produce an additional 300 doctors annually by 2027, using existing facilities and resources. This approach would not only be faster but also significantly cheaper, requiring minimal government funding compared to the projected $380 million for Waikato’s school.

Professor Tim Wilkinson, Acting Dean of Otago Medical School, has been vocal in criticising the government’s prioritisation of the Waikato project. He argues that the government could achieve the same outcome more efficiently by expanding the intake caps for Auckland and Otago, which already have regional training programs in place. Wilkinson warned that the proposed Waikato school would divert critical resources from existing institutions, create competition for clinical placements, and further strain the healthcare system.

Critics might, of course, suggest that Otago and Auckland are simply motivated by protecting their patch.

The Steven Joyce lobbying controversy

The University’s decision to hire former National Finance Minister Steven Joyce as a consultant has added a layer of political intrigue to the project. Joyce’s lobbying firm, engaged without a competitive procurement process, was paid over $1 million by the University to help on this and other projects. This arrangement drew the attention of the Auditor-General, who criticised Waikato for a lack of transparency and accountability in its hiring practices.

The Joyce-lobbying fiasco will have damaged the public’s confidence in the project. But hiring Joyce might also have been a major mistake in terms of winning over National’s coalition partner NZ First, who are reportedly unconvinced by the Waikato med school proposal. Therefore, Richard Harman has recently written that hiring Joyce “may not have been such a smart move. There is a long-standing antagonism between NZ First Leader Winston Peters and Joyce.”

Coalition tensions and Act’s demand for accountability

The political implications extend beyond Waikato and have triggered tensions within the National-led coalition. The Act party, National’s coalition partner, has expressed strong reservations about the financial prudence of the Waikato school, urging a rigorous cost-benefit analysis before any binding commitments are made. Act leader David Seymour emphasised that his party’s support is contingent on proving the proposal’s economic viability and its potential to deliver healthcare outcomes better than the existing medical school expansions.

Act’s insistence on a detailed analysis reflects its commitment to fiscal conservatism and responsible public spending. The coalition’s agreement requires this analysis, introducing a potential delay to the project and raising the stakes within the government if National appears overly keen to expedite the proposal.

Regional benefits vs Broader healthcare needs

Supporters of the Waikato proposal, including Hamilton Mayor Paula Southgate, see the medical school as a major step toward regional empowerment and an economic boost for the Waikato area. Southgate has championed the project as a chance to attract investment and create jobs, emphasising the economic benefits that a major educational institution can bring to the region.

Neil Quigley has also argued that the graduate-entry program would help diversify the medical workforce, attracting candidates who are more likely to commit to rural healthcare, a key aim of the proposal.

However, critics, including some newspapers and public health experts, question the wisdom of prioritising regional economic growth over immediate healthcare needs. A pointed editorial in the Otago Daily Times today calls the Waikato proposal a “folly,” arguing that the project diverts funds from pressing healthcare demands.

The editorial underscored the timing of the government’s announcement, which coincided with large public protests in Dunedin and Westport over healthcare cuts. For these critics, the decision to fund Waikato’s medical school instead of expanding Auckland and Otago’s capacity signals misplaced priorities. The editorial asserts: “When the government wants to put every taxpayer dollar spent under intense scrutiny, so it is not funding dumb stuff, it is hard to understand why the third medical school proposal is not a dead duck.”

Here's the newspaper’s conclusion: “We would be encouraged if the government shelved this flimsy pork barrel folly as soon as possible, citing the cost. Giving it the green light will merely provide ammunition for the many voters next election who may have a grievance about health spending cuts.”

The Path forward and key questions

As the proposal progresses to a full business case, Waikato’s supporters and opponents are locked in a battle of influence and credibility. On one hand, the Government’s push for a Waikato-based medical school aligns with its long-term vision to address New Zealand’s healthcare needs, particularly in underserved rural communities. On the other hand, the financial risks, coupled with political controversies surrounding Joyce’s lobbying, cast a shadow over the proposal’s perceived integrity.

Key questions remain unanswered. Can the Waikato medical school, if approved, realistically deliver the promised outcomes of rural and primary care doctors faster and more effectively than expanding current programs? Will the coalition Government remain unified in its support of the project as the business case unfolds, or will Act’s demands for accountability slow its progress?

The Waikato medical school proposal has become a focal point for debates about New Zealand’s healthcare infrastructure, government spending, and the influence of political lobbying. In the coming months, the detailed business case will likely determine whether Waikato’s medical school moves forward or if the government, faced with mounting financial and political pressures, reconsiders its path.

But given the latest revelations, it seems appropriate that intense scrutiny and scepticism should be applied to what increasingly looks like a politician’s “pet project” that delivers to vested interests rather than a robust expansion of health education for the public good.

Dr Bryce Edwards (with AI assistance)

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Nicole Bremner (1News): Proposed Waikato medical school's impact on doctor shortage queried

Bryce Edwards (Democracy Project): Political Roundup: Lobbying for Waikato’s Medical School causing problems for the Govt

Bryce Edwards (Democracy Project): Political Roundup: What’s behind the Med Student cuts?

Richard Harman: Putting pressure on the Government (paywalled)

Ruth Hill (RNZ): Hundreds more doctors could be trained if government funded them - report

John Lewis (ODT): Proposal to train extra doctors (paywalled)

Matthew Littlewood (ODT): Govt told of concerns over third med school plan (paywalled)

Matthew Littlewood (ODT): Proposal for third medical school at University of Waikato ‘does not stack up’

Matthew Littlewood (ODT): Third medical school passes first hurdle

Ke-Xin Li (The Post): Waikato medical school passes its first government test (paywalled)

Otago Daily Times: Editorial – Waikato medical school folly (paywalled)

Otago Daily Times: Editorial – More doubt about third medical school (paywalled)

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The housing property development industry wants the “red tape” of building consents cut, giving builders the chance to “self-certify” instead of relying on local government housing inspectors. And the Government says they’ve been listening, and now propose some major alterations to the Building Act 2004, which will deregulate the consents process.

The self-certification scheme, introduced by Building and Construction Minister Chris Penk, is framed as an effort to speed up building processes, and therefore lower housing costs. Many in the industry are, however, expressing concerns about the potential risks of deregulation, drawing comparisons to the leaky homes crisis and questioning the robustness of proposed safeguards.

The Government’s case for self-certification

Chris Penk has argued that New Zealand’s current consent process is overly cumbersome, contributing to high costs and long wait times that exacerbate the housing crisis. The government’s self-certification plan would allow qualified plumbers, builders, and drainlayers to “sign off” on their own work for low-risk builds, bypassing council inspections. This brings them in line with electricians and gasfitters, who can already self-certify under specific conditions.

To bolster public confidence, Penk emphasised that the scheme would be restricted to trusted professionals with proven track records and robust indemnity insurance, while high-risk projects would still require full inspection. His view is that allowing reputable builders to self-certify their work will lead to higher productivity, as council involvement would no longer bottleneck construction timelines.

Penk also underscored that the government’s goal is not to reduce standards but to allocate regulatory resources more efficiently, reserving strict oversight for complex projects.

Support for reform from industry

Large property developers and their association bodies have been lobbying for this change for years. And in fact, the last National Government tried to implement something similar in 2015. Such deregulation is an answer to property developers who say that the current consenting process, controlled by local authorities, is time consuming, restrictive, and costly.

The Master Builders and Master Plumbers associations have therefore advocated reform for many years, arguing that their members should be trusted to carry out professional work, essentially being self-regulating, but backed up with serious consequences for poor performance.

Individual construction companies like Jennian Homes, Signature Homes, and GJ Gardner’s argue that they are big enough to be trusted to do the certification of their own work. For example, Aiden Jury, Chief Operating Officer of Jennian Homes, recently told RNZ that “the current building consenting system was ancient and needed to change.” He said: “We believe that it's time for change, the industry's been calling for change for a long time now and we need to speed up the process.”

Jury says the Government’s proposal would be a “quantum leap” for the industry, believing it could allow builders to complete projects more efficiently and save consumers money. However, Jury stresses that only builders with solid track records and financial stability should be allowed to self-certify, as this would mitigate the risk of “cowboy” operators taking shortcuts.

Similarly, Greg Wallace, CEO of Master Plumbers, argues that plumbers are already trusted to certify certain tasks without inspection, and extending this to other areas could reduce delays. He believes that trusted professionals should shoulder more responsibility, but he agrees that detailed consumer protection measures are essential. Wallace has stated that his association has been lobbying the government for more than four years to introduce self-certification for its members.

Somewhat surprisingly, there could be significant support for the reform from local government authorities. Although local council currently have a monopoly on building consents, some in local government believe this function is something of an albatross that has been imposed on it by central government.

Political editor of The Post, Luke Malpass, reports that the chief executive of Hastings District Council, To’osavili Nigel Bickle believes that “for new large-scale builders, there is no reason why the council should have to consent their building work at all.”

Bickle is a former public servant of the Department of Building and Housing (now MBIE), and he recently commissioned one of his former colleagues from MBIE, David Kelly – who is also a former CEO of Master Builders – to produce a report, “Building Consent System Report”. This, according to Malpass, independently came to the same basic conclusions as the new government.

Will the new reforms lead to a new “leaky homes” disaster?

The last time that housing red-tape was cut so significantly – via the 1992 Building Code – the result was the leaky building crisis of the 1990s and early 2000s. Drawing parallels with this disaster, Ben Kepes explained in The Post on Wednesday what happened: “Poor materials — think untreated timber, monolithic cladding, and no eaves — alongside lax industry oversight created ticking time bombs disguised as homes.”

The best account of this catastrophe can be found in the 2019 book by Peter Dyer, titled “Rottenomics: The Story of New Zealand’s Leaky Buildings Disaster”. In this, Dyer calculates that at least 174,000 were impacted, costing at least $47 billion.

As a result, the Building Act 2004 re-regulated the building industry. This was a necessary state correction to a massive market failure. And there’s still disagreement about whether it has sufficiently fixed the problem or not, or indeed whether the 2004 Act went too far.

Many on the political right say the Act swung too far into over-regulation. Hence the new government wants to swing the pendulum back. In this regard, Ben Kepes worries the de-regulation will go too far: “loosening these standards too much could flood the market with hastily built homes and cut corners in quality. It’s a familiar pattern: to address one problem, we sometimes create the conditions for the next. Without carefully balancing quality standards with efficiency, we risk inviting a new era of poorly constructed buildings, setting the stage for the next leaky building crisis. The challenge is to find a middle ground — regulations that ensure safety without choking off the building process.”

The Post’s Luke Malpass emphasises that the leaky houses scandal “has cast a long shadow on building regulations”, but suggests we move on. He says: “Leaky buildings was then, this is now.”

Many other commentators say that we still need to learn the lessons of leaky homes. Writing in The Post yesterday, Max Rashbrooke argues that while streamlining might sound appealing, New Zealand’s experience with past deregulation efforts in construction has shown how poor oversight can lead to significant and costly structural failures. He warns that self-certification could bring about similar issues, especially if the scope of “low-risk” projects gradually expands under industry pressure.

Even more scathing is John Gray, president of the Home Owners and Buyers Association, who told RNZ Checkpoint this week that the proposals were a “grave cause for concern”.

Gray was also interviewed in August by Angela Yeoman, saying that much of the housing reform of the moment is led by property lobbyists, and that consumers aren’t listened to: “Ministers up to and including the current Minister of Building and Construction [Chris Penk] seem to be more interested in serving the needs of industry rather than providing greater consumer protection. We’ve offered an opportunity to Minister Penk to come and see some of these disasters and talk with us and he’s failed to follow through on promises to do so.”

On LinkedIn, Gray has also been forthright, arguing that the risk of defective building methods is not fully appreciated by politicians: “Successive governments have chosen to ignore it and the current government recycling the same policy the National party peddled in 2015 is madness, but a sure sign that they are yielding to industry lobbyists from an industry that, in general, cannot be trusted to get it right!”

Is the car manufacturing comparison valid?

A comparison frequently made by supporters of consenting deregulation, including Penk, is that of car manufacturing. He points to the automotive industry’s reliance on rigorous quality controls, where manufacturers are trusted to meet safety standards without government inspecting each vehicle.

AUT’s Professor John Tookey endorses this analogy to some extent, arguing that quality assurance processes within large, reputable companies could make self-certification viable for certain building projects.

However, Max Rashbrooke and others question this comparison. Rashbrooke points out that building defects, unlike car issues, often take years to manifest and are difficult to trace back to specific faults, making them less immediately detectable and more challenging for consumers to address. He argues that while manufacturers face direct consumer pressure to uphold quality, the building industry lacks equivalent accountability mechanisms.

Industry skepticism and concerns about long-term quality

Skeptics within the construction industry worry that self-certification could encourage a race to the bottom in terms of quality. David Clifton, president of the Institute of Building Surveyors, emphasizes the risk that smaller, less reputable builders might prioritise speed over quality, especially if they are motivated to save on regulatory costs. Clifton suggests that self-certification could inadvertently incentivize cut corners, with builders self-certifying work to avoid oversight.

Construction expert Mike Blackburn expresses similar reservations, warning that self-certification could lead to an uptick in subpar work that is difficult to detect until significant damage has occurred. He cites issues with insurance availability, noting that most indemnity insurance policies exclude coverage for substandard work, making it difficult for consumers to seek recourse.

Blackburn argues that the current system, despite its flaws, at least ensures consistent oversight through council inspections, a level of scrutiny that self-certification may not replicate.

Concerns over insurance and accountability

Insurance is a significant sticking point in the self-certification debate. Miriam Bell from The Post highlights a critical gap in the government’s proposal: currently, no New Zealand insurers offer comprehensive coverage for defective work, and the availability of affordable indemnity insurance for individual builders is limited. This lack of insurance availability undermines Penk’s assurance that self-certifying builders will carry adequate liability protections. Without council oversight, insurers would likely require their own inspections, adding costs back into the system that could offset any savings self-certification might offer.

Bell also points out that existing guarantees offered by trade associations, such as those from Master Builders, often include numerous caveats, with consumers frequently facing difficulties when trying to claim compensation.

Industry insiders like Ben Rickard of Builtin Insurance Brokers argue that unless reliable insurance options become available, the self-certification plan could increase risks for homeowners rather than reducing them. Rickard is unimpressed by the proposal, according to reporting by Miriam Bell in The Post: “He was not convinced the scheme would work in a market like New Zealand’s, which was largely made up of thousands of small businesses that did not have quality assurance programmes.”

Arguably, the inspections are likely to continue, but just be shifted to insurers, according to Rickard: “They will want underwriting of the risks, and surety that builds will be up to standards, and if the council is not doing it, who will? They will want some form of inspecting, so the cost shifts to the insurer.”

For this reason, the Otago Daily Times advocates caution on the proposed reforms. Here’s the conclusion of their Thursday editorial: “Whether any system to ensure adequate auditing and monitoring of self-certification might end up involving more red tape, albeit in a different form from existing arrangements, is unclear. Detailed policy decisions will be made next year, following what the government says will be thorough consultation. Thoroughness, which has not been a hallmark of much of what the coalition government has done to date, will be essential to ensure new homeowners can be confident any changes which result in short-term savings will not turn out to be expensive in the years ahead.”

Political response

Not surprisingly, there’s been an incredibly positive response from the housing industry. The Act party has also offered strong support.

But politically there hasn’t been much criticism voiced. Anneke Smith from RNZ reports that the Labour Party has taken a “cautiously supportive” stance, with acting building and construction spokesperson Kieran McAnulty stressing the importance of safeguards to prevent a repeat of the leaky homes crisis. Labour leader Chris Hipkins echoed this, stating that while the proposal could reduce costs, the “devil will be in the details,” and the industry must be held accountable to protect consumers.

Politically, the self-certification scheme represents a broader ideological shift within New Zealand’s regulatory landscape, with the government advocating for a lighter regulatory touch as a way to tackle the housing crisis.

Ultimately, the self-certification scheme illustrates the perennial tension in New Zealand’s housing policy: how to address the urgent need for affordable housing without compromising quality. The government’s proposal, if implemented, could indeed reduce costs and speed up construction, but it carries significant risks.

The question remains whether the safeguards proposed by Penk will be enough to prevent the types of crises that have historically followed deregulation in the construction industry. For the moment, the government will need to convince a wary public that the lessons of the past will not be ignored in this latest push for housing reform. They might also might need to convince housing buyers that this new policy isn’t just the result of the lobbying and political donations of property developers.

Dr Bryce Edwards (assisted by AI)

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Miriam Bell (Post): Insurance could torpedo self-certifying build plans (paywalled)

Miriam Bell (Post): Self-certified builds: game changer or risky business? (paywalled)

Luke Malpass (Post): Why building consent changes are a big deal (paywalled)

ODT: Editorial – Proceeding carefully on self-certification (paywalled)

Max Rashbrooke (The Post): The disaster scenarios arising from building consent deregulation (paywalled)

Anneke Smith (RNZ): Labour 'cautiously' supports tradies signing off their own work

Greg Wallace (Post): Self-certification a significant step towards solving housing crisis (paywalled)

Kerre Woodham (Newstalk ZB): Would self-certification build a better quality of workman?

Angela Yeoman (Herald): Leaky logic: Will loosening building & lending rules lead to new wave of disasters? (paywalled)

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The Auditor-General’s decision yesterday to investigate ministerial conflicts of interest, particularly in relation to the Government’s Fast Track Act, represents a critical step in scrutinising how governmental processes handle potential ethical risks. This investigation dives into whether the influence of lobbying, political donations, and ministerial entanglements with wealthy interests has compromised the integrity of the Fast Track Act’s accelerated approval process. Auditor-General John Ryan has previously voiced concerns on this issue, especially through a significant submission to the parliamentary select committee in April, which flagged potential weaknesses in the Bill’s conflict management approach.

The Auditor-General’s longstanding concerns

Back in April, the Auditor-General submitted to the select committee reviewing the Fast-Track Bill, raising serious concerns about the potential for unchecked ministerial conflicts within this expedited approval framework. The submission cautioned that the Bill, while designed to address infrastructure bottlenecks, lacked robust mechanisms for identifying and managing conflicts among ministers.

He recommended the Government “consider whether the transparency and accountability arrangements in the Bill are proportionate to the discretion being provided to Ministers”.

The Auditor-General’s comments underscore a recurring theme in recent criticism: the process of declaring conflicts remains murky, leaving the public uninformed about ministers’ ties to Fast-Track projects. This lack of transparency, critics allege, could leave the Fast-Track Act vulnerable to favouritism and influence from entities with political or financial sway.

Issues with Ministerial conflict-of-interest management

Media commentators and analysts argue that existing ministerial conflict-of-interest protocols fail to address the nuanced risks posed by the Fast-Track process. A number of articles have recently noted that ministers involved in approving fast-tracked projects may have financial ties, political relationships, or donor obligations that complicate impartiality. In one case, a minister overseeing Fast-Track applications had indirect financial connections to companies involved in these projects, leading observers to question how thoroughly these conflicts were managed and disclosed.

According to the Auditor-General, the Fast-Track Act’s accelerated nature only heightens these risks by limiting the usual checks and balances provided under the Resource Management Act. By prioritising speed, the Act appears to bypass necessary scrutiny on whether all relevant conflicts have been properly disclosed and managed, leaving critics to question whether the current system adequately protects against undue influence.

The Role of political donations and lobbying

Political donations and lobbying efforts around Fast-Track projects represent another focal point for concerns. In recent years, development firms, construction companies, and fossil fuel interests have contributed significant sums to political campaigns, sparking questions about whether these donations might influence which projects get fast-tracked.

Farah Hancock of RNZ has recently detailed how “Companies and shareholders associated with 12 fast-track projects gave more than $500,000 in political donations to National, Act and New Zealand First and their candidates”.

However, the minister leading the Fast-Track process, Chris Bishop, has explained that the Government does not accept that political donations produce any sort of conflict of interest. The Government maintains that political donations are managed transparently through required declarations, which are disclosed publicly. However, critics argue that this approach does not adequately address the influence these donations may have on fast-track decisions.

For example, in October the Listener political columnist Danyl McLauchlan said that the public is likely to view the donations and connections that many of the Fast Track candidates have with political parties to be politically smelly: “Some of them already have a certain fragrance – like the Winton Group’s housing development in Papakura. That company had previously requested exemption from zoning laws and local body consenting from Kāinga Ora and was declined. The same project is now included in the fast-track bill – and one of the company directors is former National cabinet minister Steven Joyce, and chair Chris Meehan is a significant donor to the National Party. It looks an awful lot like well-connected companies paying money to political parties that then pass laws circumventing standard legal processes.”

Lobbying, while legal, amplifies these risks. Companies with vested interests in fast-tracked projects are known to employ lobbyists with strong government connections, and various commentators have pointed out how the Act’s minimal requirements for lobbying disclosures leave the public in the dark about private sector influence.

Ideally, the Auditor-General’s inquiry should examine how these lobbying practices intersect with ministerial decision-making and whether they align with public interest objectives.

The Auditor-General’s influence on parliamentary debate

The Auditor-General’s April 2024 submission directly influenced parliamentary discussions on the Fast-Track Bill. Several MPs cited the submission as they pushed for amendments aimed at tightening conflict-of-interest rules. Labour’s Barbara Edmonds has argued that the Auditor-General’s concerns should prompt Parliament to adopt stricter transparency measures and clearer protocols for handling conflicts in high-stakes decision-making processes.

Conversely, National’s Chris Bishop voiced reluctance, viewing some proposed restrictions as potentially burdensome. Hence, the Bill proceeded largely unchanged, leading critics to argue that the government missed an opportunity to build stronger safeguards directly into the legislation.

Influence of wealthy interests and political clout

High-profile developers and industry leaders, many of whom have funded political campaigns, look to benefit from the Fast-Track process, raising concerns about the influence of elite interests. Critics contend that the Fast-Track Act prioritises wealthy stakeholders by facilitating easy project approvals without standard RMA oversight.

But the Auditor General’s inquiry isn’t going to look at any of these potential examples. In announcing the inquiry yesterday, John Ryall stated: “We will not examine or comment on policy decisions underpinning the Fast-track process, or the merits of individual projects or the decisions to include an individual project in the Fast-track Approvals Bill.”

Nonetheless, the eventual report is likely to spark further debate about whether the approval process disproportionately favours well-connected applicants, who may receive preferential treatment due to their political affiliations.

In recent months, critics and commentators have argued that by enabling projects that align with the interests of influential donors, the Act risks fostering a political climate where ministerial decisions reflect elite priorities over public good. This favouritism not only impacts fair access to the Fast-Track pathway but also deepens skepticism about the government’s commitment to balanced development that considers environmental and social factors.

For example, the Listener’s Danyl McLauchlan said that the Coalition Government should be establishing a “risk register” to monitor areas that could lead to problems: “The fast-track bill and perceptions of corruption should be at or near the top of National’s list. It is unusual for Parliament to pass legislation that directly benefits the commercial interests of specific private companies, and almost unheard of for it to do so in a way that circumvents existing laws and legal processes.”

The Government’s opacity on Fast Track conflicts of interest

Right from the start the Government has maintained an ethos of secrecy about the Fast-Track process, refusing at various stages to provide information on key parts of the programme. Over time they have been pressured to give up more and more information, but only begrudgingly.

When they recently announced the 149 Fast Track applicants that are to be included in the initial legislation, pressure came on the three ministers to give up information on their conflicts of interests and how they managed them. Shane Jones was the most willing on this, identifying the eight conflicts of interest that had led him to recuse himself of any decision making on them.

Bishop admitted to one. But none of the three Fast Track Ministers – to say nothing of the rest of Cabinet – were willing to disclose a full list of conflicts of interest and state how they were dealing with the ones that they weren’t recusing themselves from.

The Government justified this opaqueness on the needs of Cabinet and personal confidentiality. Instead, it was explained that Ministers would self-regulate their conflicts and would leave the room if any discussion occurred about a Fast Track company that they had a conflict of interest with.

Possible reform outcomes

Although the focus of the new inquiry mostly applies to the Fast-Track, it might be expected to recommend structural reforms aimed at insulating ministerial decisions from conflicts of interest. Suggestions might include establishing an independent oversight body to monitor disclosures, instituting clear guidelines on political donations, and increasing transparency around lobbying activities. Once again, the creation of an Integrity Commission comes to mind.

Certainly, the current practice by which conflicts of interest are managed behind closed doors, without any need to declare what these are or how they are dealt with is likely to change. This is standard practice in other countries.

Similarly, in the way that ministers make appointments – such as to the Fast-Track’s so-called independent expert panel – is ripe for reform. Other countries use public appointment committees to establish candidates short-list for such appointments.

Ideally, the Auditor-General’s recommendations would also push for a more formalised code of conduct for ministers involved in Fast-Track decisions, including mandatory public declarations of all relevant financial and familial ties. These reforms, if implemented, could help New Zealand align its processes with international best practices and revive its reputation for clean governance. But more than that, such changes are essential for rebuilding public trust and ensuring that Fast-Track projects genuinely serve public interest rather than private profit.

Concerns about the Fast Track integrity isn’t just from Government opponents

What’s important about the Auditor General’s inquiry into ministerial conflicts of interest is the fact that the office has a strong reputation. The inquiry can’t be dismissed as troublemaking by political opponents.

Although opposition to the Fast Track may have been dismissed as coming from the Coalition Government’s political opponents, including environmentalists, this isn’t accurate. There are in fact also many on the pro-business and political right side of politics who also believe the Fast Track rules have the potential for enabling corruption, and therefore needs to be carefully regulated.

For example, The New Zealand Initiative has argued that the Fast Track Act should only exist for a short period of time. A Senior Fellow at the Initiative, Nick Clark, argued in the Herald last month that there are very real problems of corruption likely to arise from the Fast Track Act if it gets out of control: “The biggest problem is the opportunity for ‘rent-seeking’ – manipulating the political environment for private benefit. Getting projects on the fast-track list could be incredibly valuable for proponents. While projects should have strong economic benefits, the process heightens the risk of bad outcomes – ranging from misallocation of resources reducing economic efficiency to encouragement of corruption and cronyism. The risks might be small initially but may increase over time.”

Similarly, National Party pollster and analyst David Farrar has previously written about his concerns, saying that a “legitimate concern is the potential for corruption” flowing from the new rules, and he worries that there are no safeguards to prevent bribery being used by the wealthy to get consents from whichever politicians are in charge of the Beehive.

Farrar has even argued that the potential for corruption under the new legislation is so significant that much greater regulation of lobbying and transparency of political donations is necessary. For example, he proposes that “a condition of consent applications should be applicants have to detail (at risk of criminal penalty) all dealings they have had with Ministers, MPs, staff in the last x years, and if there have been any donations by them or associated parties.”

Interestingly, even many National voters are concerned about potential for corruption in the Fast Track Bill. Horizon Research was commissioned by Greenpeace to ask the public if they are concerned that the Fast Track “could create a risk that commercial interests, some of whom have made donations to political parties and MPs, may influence development decisions”. The results showed that 41% of National voters stated that they had this concern. While this figure is lower than for the average voter (68% were concerned), it still indicates that concerns about the integrity of the process isn’t confined to the Government’s opponents.

A Critical juncture for ministerial integrity

The Auditor-General’s inquiry into the Fast-Track process underscores a moment of reckoning for New Zealand’s political integrity. His April submission to Parliament revealed serious concerns about how the current process handles ministerial conflicts, laying the groundwork for an inquiry aimed at restoring faith in public decision-making.

This inquiry might well reveal a deep-rooted vulnerability within New Zealand’s governance framework, where ministerial autonomy sometimes outpaces public accountability. If it is thorough enough, the Auditor-General’s scrutiny of political donations, lobbying influence, and self-reported conflicts will raise biggest questions about the systemic issues that have allowed private interests to potentially overshadow the public good in ministerial decision making – not just in the current government but its predecessors. The findings of this investigation could pressure ministers to finally adopt stricter conflict-of-interest regulations, offering the public a greater assurance that development projects reflect shared national values rather than the priorities of a powerful few.

Dr Bryce Edwards (assisted by AI)

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Auditor General: How Ministerial conflicts of interest were identified and managed in relation to Fast-track projects

Auditor-General: Submission on the Fast-track Approvals Bill

Dan Brunskill (Interest): Parliament's watchdog will examine how conflicts of interest were managed in the Fast-track Approvals Bill

Thomas Coughlan (Herald): Auditor-General concerned about fast-track bill’s lack of transparency, protections for conflicts of interest

Jamie Ensor (Herald): Inquiry launched into how conflicts of interest dealt with during fast-track approval project decision-making

David Farrar (Patreon): Is RMA fast track a necessary evil? (paywalled)

Farah Hancock (RNZ): $500,000 in political donations associated with fast track projects

Farah Hancock (RNZ): Most fast-track panellists picked by ministers, political parties

Thomas Manch (The Post): Cabinet ministers' conflicts over fast-track project made public (paywalled)

Glenn McConnell (Stuff): Government won’t say how fast track conflicts of interest were managed

Craig McCulloch (RNZ): Auditor-General to inquire into possible conflicts of interest by ministers over fast-track projects

Danyl McLauchlan (Listener): Why the govt's fast-track bill could turn into its own Three Waters debacle (paywalled)

Thomas Manch (The Post): Auditor-General to investigate Cabinet ministers' conflicts with fast-track projects (paywalled)

Tom Pullar-Strecker (The Post): Fast-track law: Auditor-General raises topic of 'ministerial conflicts of interests' (paywalled)

Claire Trevett (Herald): Fast-track law: The political peril of keeping conflicts of interest in the dark and why Shane Jones and Judith Collins have been upfront (paywalled)

Nick Young (Greenpeace): Poll shows National voters concerned over fast track bill’s potential for destruction and corruption

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Political Roundup: Ministry of Health’s conflict of interest error helps Casey Costello

Casey Costello has spent her first year as Associate Minister of Health, fending off accusations of bias in her smoking reforms, with the suggestion of conflicts of interest – largely due to NZ First’s close connection to tobacco lobbyists. But suddenly the boot is on the other foot, with integrity questions being raised in Parliament by her leader and Deputy Prime Minister Winston Peters.

The controversy of the last week involving Labour MP Ayesha Verrall, her sister-in-law and the Ministry of Health, underscores the tensions between government transparency, political rivalries, and the ethical handling of conflicts of interest in New Zealand. This incident has quickly become a touchstone for discussions on public sector neutrality, inter-party dynamics, and the challenges in maintaining integrity within the scrutiny of smoking policy.

The Conflict at the core

The scandal began when Peters, during a parliamentary session, accused a Ministry of Health official – Verrall’s sister-in-law – of working on tobacco policy alongside Costello without disclosing her familial relationship with Verrall. Peters suggested that this connection might have facilitated leaks or otherwise biased support against NZ First’s policies on smoking reform.

However, the Ministry of Health clarified that the official had indeed declared the conflict internally, placing responsibility on the Ministry itself for not informing Costello. The official’s adherence to protocol highlights the complexities in managing family ties within a small nation’s political and administrative framework.

A Ministry blunder, but who is to blame?

Several commentators, including Craig McCulloch from RNZ, argue that the Ministry of Health’s failure to inform Costello has created a debacle that leaves the official vulnerable to political attacks. McCulloch highlights that while the official followed Ministry guidelines, her name and credibility are now embroiled in political manoeuvring, especially with Peters invoking parliamentary privilege to reveal her identity.

This point is critical: the public servant is now a pawn in a much larger political game, as Peters uses the situation to shift the spotlight from NZ First’s own tobacco policy controversies.

Several commentators criticise Peters for using parliamentary privilege to name the public servant. Peters is certainly no stranger to the art of political offense-as-defense, using parliamentary privilege as a shield to bring personal accusations against individuals who cannot publicly defend themselves.

A Deflection from substantive policy discussions

Peters’ manoeuvre was tactical, providing him an opportunity to deflect Labour’s criticisms of NZ First’s ties to tobacco lobbying. Yet, his lack of evidence when pressed only underscores the impression that the attack may be more about sowing doubt than uncovering genuine wrongdoing.

Jenna Lynch from Stuff encapsulates Peters’ approach as one designed for maximum deflection, giving NZ First an opportunity to play the victim in a narrative where they are often seen as antagonistic toward public health initiatives. She concludes: “The Ministry’s failure has handed an easy deflection to Winston Peters which distracts from real and necessary scrutiny of tobacco policy.”

An Otago Daily Times editorial has also commented on this: “The irony of finger-pointing about conflicts of interest coming from New Zealand First will not be lost on those aware of the various questions which have been raised for months about the part Big Tobacco may have had in setting that party’s agenda on smoking issues.”

Political ramifications and leadership scrutiny

Prime Minister Christopher Luxon and Labour leader Chris Hipkins have taken divergent approaches, each aiming to leverage the situation to their advantage. Jamie Ensor (Herald) and Michael Daly (Stuff) report that Luxon criticised the Ministry’s oversight and questioned Labour’s lack of proactive disclosure.

Luxon’s decision to stand by Peters has been seen as a move to support his coalition partner, while Hipkins condemns Peters’ actions, labelling them “reprehensible.” Ensor interprets Luxon’s stance as a bid to deflect criticism from Costello’s smoking policy, framing Luxon as opportunistic in his willingness to focus on the Ministry’s failures rather than address deeper issues with Costello’s policies.

In contrast, Hipkins has defended the public servant and emphasized that, as a professional, she acted appropriately by declaring her conflict within the Ministry. Daly highlights that Hipkins questioned Peters’ motives, arguing that the attack on a public servant under parliamentary privilege is inappropriate and does not address the substance of smoking policy issues.

But Hipkins was also forced into an awkward position, initially downplaying the familial relationship by calling the official a “distant relative” of Verrall. This mischaracterisation invited further scrutiny and gave Peters an opening to challenge Labour’s credibility.

Hipkins later corrected his statement, but the damage was done: the misstep has allowed Peters to claim Labour was not forthcoming, further fuelling the public perception of opacity within Labour’s ranks.

Public perception and bureaucratic neutrality under threat

Public sentiment surrounding this issue reflects broader frustrations with perceived bias within New Zealand’s bureaucratic institutions. Peters and Costello’s supporters argue that institutional bias undermines the government’s mandate, feeding into a rightwing narrative of a “deep state” that obstructs conservative agendas. Chris Trotter, writing for Interest.co.nz, highlights that Peters’ approach resonates with conservative voters who feel disenfranchised by what they perceive as a left-leaning bureaucracy that does not fully accept their mandate.

Trotter contends that conservative voters view such bureaucratic lapses as part of a broader pattern of bias against rightwing government, compounding a sense of alienation. The fallout from this scandal thus feeds into a political climate where the neutrality of public institutions is increasingly questioned.

This issue exemplifies how public servants with familial or social ties to political figures can become scapegoats in larger ideological battles. Rightwing media and political commentators have seized upon this conflict to argue that the government’s institutional framework is inherently biased against conservative policies, particularly those around tobacco and industry regulation.

This scandal underscores the tension between public service neutrality and political affiliation in New Zealand. The Ministry of Health’s failure to communicate the conflict has left an impression of opacity that Peters exploited.

The Integrity of health policy

At the heart of the debate is the policy conflict between Verrall and Costello over tobacco regulation. Verrall, a public health advocate, has been vocal against Costello’s policies, which she argues favour tobacco industry interests, notably in promoting heated tobacco products (HTPs). Labour has requested an Auditor-General investigation into NZ First’s tobacco tax decisions, suspecting industry influence. Peters’ attack on Verrall’s sister-in-law can be viewed as an attempt to undermine Verrall’s credibility and derail Labour’s scrutiny of NZ First’s tobacco policy.

The irony is hard to miss: Peters, who has long faced scrutiny for his own party’s connections to the tobacco industry, now redirects attention by questioning the integrity of Verrall’s public servant relative. This tactic allows NZ First to maintain a counter-narrative while diverting attention from potential conflicts of interest within their own ranks.

As Tim Murphy of Newsroom has noted this week, “It would be a shame now if the ministry’s failure to alert this minister to the official’s relationship with Verrall took the focus off Costello’s way of doing politics when it comes to tobacco and the tobacco industry. The smoking gun in this instance is the secrecy, and the smoking.”

Calls for independent oversight and reform of conflict of interests policies

Some commentators have called for an independent review of the Ministry’s conflict-of-interest protocols to address the perceived failure in this case. Some argue that while the current protocols are generally robust, this incident demonstrates the need for clearer guidelines in cases where public servants have direct familial connections to opposing political figures.

The Health Ministry’s current protocols allowed the staff member to follow procedure, but the lack of direct notification to Costello exposed a loophole that NZ First has been quick to exploit.

The scandal has prompted a broader discussion about conflict of interest management within government agencies. The Otago Daily Times editorial on this, reflects a consensus that while it’s common for public servants to have political or familial ties, the Ministry’s failure to inform Costello points to systemic weaknesses.

The newspaper suggests that an independent review of the Ministry’s policies may be warranted, especially in high-stakes situations involving sensitive topics like smoking reform: “This whole matter has become so messy and murky it would be good to see a comprehensive independent examination of it.”

The Ministry’s protocols, which align with the Public Service Commission’s standards, require review to ensure they are sufficient in managing complex relationships. Many of the politicians involved in this saga have agreed that it is common to have family members in the public sector, and that this is manageable through proper disclosures. However, there seems to be a growing admission that a more stringent disclosure policy is needed when familial relationships intersect with politically charged issues.

A Political scandal with lasting implications

The scandal surrounding Verrall, Costello, and the Ministry of Health is a potent reminder of the challenges facing New Zealand’s public service. In a country where personal and professional connections are often intertwined, managing conflicts of interest requires transparency and strict adherence to ethical guidelines.

This incident, though rooted in a relatively minor oversight, has been transformed into a bigger political firestorm, illustrating the fragility of public trust in government institutions and the risks of weaponising bureaucratic lapses for political gain.

From a broader perspective, this conflict underscores the ongoing tension between New Zealand’s left and right factions over the role of government, the influence of industry, and the impartiality of public institutions.

Therefore, this scandal reveals not only the weaknesses in existing protocols but also the ideological battle lines that shape public perceptions of government transparency and integrity. In a climate of heightened polarisation, such incidents risk further eroding trust in public institutions and amplifying calls for reform to restore faith in government neutrality.

Dr Bryce Edwards (assisted by AI in aggregating this summary material)

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Michael Daly (Stuff): Chris Hipkins says he chose ‘wrong form of words’ to describe Ayesha Verrall’s relative

Jamie Ensor (Herald): Christopher Luxon calls out ministry for failing to tell Casey Costello worker was Ayesha Verrall’s relative

Jamie Ensor (Herald): Smoking policy: Ministry of Health apologises for not telling Casey Costello worker was Ayesha Verrall’s relative

Jenna Lynch (Stuff): Ministry of Health has questions to answer over Costello conflict

Craig McCulloch (RNZ): 'Incredibly disappointing': PM turns up heat on Ministry of Health failing to disclose conflict of interest

Craig McCulloch (RNZ): Ministry of Health apologises to minister over failure to disclose conflict of interest

Craig McCulloch (RNZ): Health Ministry not winning any friends over conflict of interest handling

ODT: Editorial – Messy smoking saga drags on (paywalled)

Adam Pearse (Herald): Ayesha Verrall contests Winston Peters’ conflict of interest claim about ‘relative’ working on smoking regulation

Chris Trotter (Interest): Christopher Luxon should be grateful that Chris Hipkins is as out of sympathy with the temper of the times as he is

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This column about the Auditor General's report into Gumboot Friday stated that questions had been raised about the independence and methodology of ImpactLab, a business chaired by Sir Bill English. I retract these statements and apologise for them.

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Should Government Ministers be able to dole out money to anyone they want? Or should proper rules be followed when disbursing taxpayer funds?

According to a landmark condemnation from the Auditor General this week, the politicians need to follow the rules. The watchdog published a damning letter on Wednesday that he had sent to the Ministry of Health, chiding them for letting the Minister for Mental Health, Matt Doocey, hand out $24m to a charity closely connected with various political parties – Mike King’s Gumboot Fridays.

The Decline of transparency, integrity, and accountability in the public service

Auditor General John Ryan says that “transparency, integrity, accountability, and value for money” need to be at the centre of how government agencies spend their money. Certainly, in the past, public money wasn’t just dished out to the mates of politicians. The public service was there to prevent such abuse of office. Officials have been tasked with ensuring that proper procurement processes are followed.

That protection against corruption no longer appears to be so healthy. Basically, the Auditor General says that the way the public servants just handed out $24m to Mike King “stinks”. Therefore, his landmark telling-off of the Ministry of Health should be a real wakeup call about the state of the public service. The letter needs much more attention.

Politicians picking favourites

The scandal over the $24m given to the Gumboot Fridays programme comes out of the closeness that many politicians and political parties have to comedian and mental health advocate Mike King. Across the political spectrum, politicians have championed King’s unorthodox methods and tenacity in trying to turn around the blight of youth mental health illness. The fact that King has been something of an outsider, rejected by the health system, has made him a cause celebre.

Hence the last Labour Government gave $600,000 of funding to his Gumboot Fridays programme in 2021 without any proper process. And then the new Coalition Government agreed to provide King even more money – giving Gumboot Friday’s $6m a year for four years- to counsel young people.

Although there are many charities and social services providers that also provide similar services to that of Gumboot Fridays, these competing providers were locked out of consideration for the $24m fund. New Zealand First and the National Party decided against any advertised and open tendering process for this service in favour of just giving the funding straight to Mike King.

Mental Health Minister Matt Doocey, therefore, instructed the Ministry of Health to sign a contract with King’s charity. There was only a little pushback to this. The Treasury, for example, advised that providing the money to the charity would involve risks due to ignoring the procurement rules. The Health officials also pointed out to Doocey that such funding would not be compliant with public procurement rules.

However, health officials came up with a way around the rules – a legal loophole. In health contracts there’s a provision to “opt out” of the standard procurement processes for cases of specialist health services. Although this exemption wasn’t meant for the likes of Gumboot Friday, it meant that officials were able to deliver what the Beehive wanted.

What the Auditor General said

The letter from Auditor General John Ryan essentially says that the Ministry of Health was too eager to please, and officials should have pushed back against their minister. They should have explicitly told Doocey that they couldn’t give the contract to King’s charity without breaking the rules. And regarding using the “opt-out” loophole, the Auditor General says the Ministry failed to give a “clear justification” for doing so.

The Auditor General’s six-page letter contains one key part that is worth quoting at length. This is his list of the five things wrong with the procurement process:

1. The selection of the supplier and the amount of funding was decided without an open and transparent process

2. There was no opportunity for a fair, open or competitive procurement process

3. The funding for the new initiative was specific to a supplier, rather than to a broad policy initiative or to achieve a policy outcome

4. The limited analysis on whether it was appropriate to directly contract the supplier or whether the supplier was best placed to deliver the policy objective was done only after the decision to provide funding to the supplier had been made

5. The decision to opt-out of the rules took place after the decision to engage the supplier and without clear justification of why an opt-out was appropriate

The letter acknowledges that officials were “put in a difficult position” because they were directed by their Minister to dole out the money to Gumboot Fridays. But the Auditor General simply doesn’t believe that officials pushed back hard enough: “the documents I have seen do not reassure me that the full range of risks associated with the procurement were communicated to ministers.”

The main firepower of the Auditor General’s letter was directed at the officials in the Ministry of Health. And there’s no doubt that they deserve the lambast.

But are the politicians getting off too lightly? The Herald’s Audrey Young thinks so, complaining that the Auditor General has slammed the wrong group: “The Auditor-General has eschewed any criticism of the politicians or coalition agreements themselves, effectively saying they are out of bounds. That is letting them off the hook. Someone with independence and oversight should be telling the politicians why such promises are problematic to good practice. If not the Auditor-General, then who?”

Matt Doocey has gone to ground this week, refusing to be interviewed on the Auditor General’s finding. Instead, he’s put out a statement, blaming officials: “While the decision to fund Gumboot Friday was a decision made by the government, how this commitment was implemented was a decision for the Ministry of Health. Throughout the process, the minister has sought, and received assurance from officials that the implementation option chosen by the Ministry of Health is compliant with government procurement rules.”

As Young rightly comments, the Minister’s attempt to blame officials is “galling”.  

National Party connections to Gumboot Fridays

The Auditor General’s report only dealt with the Ministry of Health’s role in the procurement process for Gumboot Fridays. However, there are still other concerns about the funding.

The problem is that Gumboot Fridays is run by the “I Am Hope” charity, which is increasingly viewed as a National Party charity. The CEO that was running the charity for much of the time of the controversy was Troy Elliott, a National Party activist, who has been keen to become a National MP (following in the footsteps of his father who had been in Parliament).

The new chair of the charity is Naomi Ballantyne, who has been a financial donor to National in recent years. During the 2020 election year, she donated $20,600 to the party; last year, she made three further donations totalling $6840. She made her fortune in the life insurance industry.

Of course, in contrast to Gumboot Fridays getting $24m, we have leaned this week that David Letele’s South Auckland foodbank is having to close at Christmas this year due to a lack of government support. Letele is also something of a popular figure in political circles, with his innovative achievements incredibly respected. However, he doesn’t seem to be very close to any of the parties that are currently in power.

The unfortunate lesson for the charity sector therefore seems to be: it’s not what you do, it’s who you know.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Anusha Bradley (RNZ): 'Unusual and inconsistent' process to justify $24m 'Gumboot Friday' contract, auditor-general finds

Anusha Bradley (RNZ): 'Opt-out' clause used to justify lack of procurement process for Gumboot Friday funding

Felix Desmarais (1News): Gumboot Friday funding process 'unusual', not transparent – watchdog

Bryce Edwards (Democracy Project): Political Roundup: The Negative social impact of taxpayer-funded partisan charities

Oliver Lewis (BusinessDesk): Auditor-General criticises 'unusual' Gumboot Friday procurement process (paywalled)

No Right Turn: "The party of personal responsibility”

Bridie Witton (Stuff): Government’s Gumboot Friday funding found to be ‘unusual and inconsistent’

Audrey Young (Herald): Coalition Government wasting time and money on pointless election promises (paywalled)

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Although the public and the public service are being told to tighten their belts, politicians continue to spend up large on themselves. The official statements of MPs’ and Ministers’ expenses have recently been released, and they show that instead of cutting back, the politicians are increasing their use of their allowances, and often in questionable ways.

Every three months, the Parliamentary Service and the Department of Internal Affairs disclose the amount spent on accommodation and travel required for MPs and Ministers to fulfil their duties. MPs' expenses between April and June totalled nearly $2.1 million, while the ministerial expenses, including domestic and international travel, were $1.8 million. Compared to previous spending quarters, the latest numbers have gone up significantly.

Parliamentary travel and accommodation perks

Unsurprisingly, in the most recent quarter, the biggest spending ministers on travel have been the Prime Minister ($239,630), Foreign Minister ($208,051), and the Trade Minister ($127,247) – with the vast amount of those figures being spent overseas. In terms of domestic travel and accommodation, the biggest spender was the Minister of Regional Development, Shane Jones ($53,610).

Aside from ministers, the biggest spender on airfares for the last quarter was Te Pāti Māori co-leader Debbie Ngarewa-Packer – with a total flying bill of $39,209. Part of this was spent on travel to Hawaii in June for an activist summit called “Protecting Oceania”.

Ngarewa-Packer’s airfare spend was significantly higher than the next biggest spending MP – Willie Jackson’s total airfare bill for the quarter was $24,036. This included the cost of $16,486 for his trip to the UK to appear in the Oxford Union debate. The next biggest spender on flights was Labour’s Kieran McAnulty, who also went to the UK on a “housing visit”, costing $6284, adding to his overall flying bill of $16,947.

Looking at all the expenses, including accommodation claims, the highest spending MP was also Ngarewa-Packer – her expenditure claim for the three months was $60,990. And the next largest spender was her co-leader Rawiri Waititi, who claimed $42,675 over the three months.

The next highest overall spenders were Willie Jackson ($39,870), Kieran McAnulty ($38,030) and NZ First’s Jamie Arbuckle ($34,447). All three of these MPs are list MPs, a role which isn’t generally associated with high travel bills, as they don’t need to service an electorate. In the case of Arbuckle, however, he is also an elected councillor on the Marlborough District Council and therefore has to commute more between his two jobs.

More questionable expenditure

Other high spending from politicians has also recently come to light. Two weeks ago, Philip Crump posted online about the spending details of two Labour politicians in 2023. He questioned why the then Labour MP for Rongotai, Paul Eagle, who stepped down at the election, had such significant spending on taxis and ground travel in the final six months of last year. Even though the MP was retiring, his domestic travel spend was about $21,000 – and about $15,000 was billed in the October to December period, even though the election occurred on 14 October, after which Eagle was no longer an MP.

Similarly, Crump raised questions about the parliamentary spending of former Labour MP Kiri Allan, who before departing Parliament claimed about $9,000 in parliamentary reimbursements for driving she did during the last 12 months of her time as a Minister. Crump questions why she would be using a car so much: “Given the reimbursement rate, Allan is effectively claiming to have driven the length of New Zealand in her own car numerous times whilst also being a Minister, sitting MP and having use of a ministerial car, air flights and taxis.”

Also on social media, another amateur detective drew attention to recent OIA information to come out on Allan’s claimed expenses for attendance and and a speech at the “Wahine Māori Leaders in Law Firms Conference” on Waiheke Island, just before her car crash. Sleuthing work apparently showed that “there is no conference website, no social media photos, no press releases and no trace of any such event”.

The Parliamentary Service could only find “a simple email from Allan’s ex-wife Natalie Coates, inviting her to Waiheke Island for the weekend to give a talk to a number of ‘Wahine leaders’ at Kahui Legal”. The then Minister billed for the rental of a beach front apartment ($1,218, but Allan contributed an unspecified amount to the bill), and a rental car.

Politician credit card spending and allowances

Ministers also have a credit card that they can use for work expenses, and the details from these are also regularly released. 1News has been trawling through the latest ministerial credit card receipts, finding that the most interesting purchases are normally for gifts for foreign dignitaries. For instance, Prime Minister Christopher Luxon spent $399 buying a harmonica in Auckland, which he then gave to Prime Minister Rabuka of Fiji.

The cards are also used for eating out. Chris Bishop was one of the biggest spenders on the credit cards in the latest information release – most of it while on a trip to London and Switzerland earlier in the year. The frequency of visits to McDonald’s was noted, and a spokesman from Bishop’s office explained to 1News journalist Tom Day: “He also really likes fast-food. His waistline is proof of that.”

Ministers and MPs also receive a basic expense allowance which they receive to make up for out-of-pocket expenses, such as koha, flowers, luggage, buying raffle tickets, etc. MPs receive $16,980 each year, and the Prime Minister gets $26,606.

It’s not clear whether this basic allowance is meant to cover work clothes as well. In the past, the allowance rules stated that only the PM could use it for clothing and grooming.

This is has become a controversial issue in the UK, where Prime Minister Keir Starmer has been in trouble for accepting business funding to pay for expensive clothes for himself and his wife. However, Nicky Hager’s Hollow Men book detailed corporate donations helping out with Don Brash’s wardrobe when he became Leader of the Opposition in 2003.

The issue of whether taxpayers should now fund New Zealand politicians to dress smartly has now been raised here. This week, Newstalk ZB’s Ryan Bridge says he’s in favour: “I think we should publicly fund our leaders wardrobes. I'm just going to put it out there, I think we should. It's important how we look on the world stage. In the world of geopolitics and diplomacy you need to look good. You need to look sharp and you need to need to look smart. We don't want to be looking like some crackpot banana republic when we're going to these events, do we?”

Are politicians spending too much on themselves?

Given that the Coalition Government has insisted on austerity for many sectors of the state – particularly the public service, and significant funding restraints on critical parts of the welfare state like Health – the public might wonder why politicians don’t also have to cut back. Shouldn’t the 6.5% budget cut edict for government agencies not also apply to Parliament?

Earlier in the year, Stuff journalist Andrea Vance also questioned why all the other big spending budgets for the politicians at Parliament have been protected from cuts. She puts forward some of the perks that could be cut: “How about the bouquets of freshly-cut flowers, replenished weekly around the Parliament building? Heating the complex’s swimming pool for the exclusive use of MPs and parliamentary staff? Or the fluffy towels solely for members’ use in the precinct’s gym?”

Such petty spending wouldn’t save much. But Vance also points to some other bigger budgets that could be tightened: “Perhaps the ‘regular payment’ to MPs to pay for telephones and internet for their homes? Then there is the $52 million a year MPs and their parties get to support their work. (By the way, that includes funding some of their social media and advertising campaigns.) And what about the $3m a year on office supplies? And then there’s the $3.6m that will go into ‘inter-parliamentary relations’ over the next three years - that’s at least three overseas junkets for MPs.”

Secrecy over MP expense accounts

The biggest problem, however, with politician spending on themselves is that it’s so opaque. It’s very hard to uncover the information. Partly this is by design. The problem is that the Official Information Act doesn’t apply to Parliament – the politicians have exempted themselves.

This means that whenever journalists or members of the public have tried to hold politicians to account for spending of public money, they come up against a brick wall.

For example, Stuff’s Andrea Vance recently approached Te Pāti Māori about the spending of their MPs, but she says her requests for comment were ignored. She wanted to know how Debbie Ngarewa-Packer had managed to rake up an airfares bill of $39,209 in just three months.

Vance then went to both the Speaker, Gerry Brownlee, and the Parliamentary Service, and they declined to give details on what the money was spent on. According to the Parliamentary Service, individual MPs and parties must be asked for more information on their taxpayer expenditure: “It is up to each member to ensure that they are transparent to the public who will ultimately judge their actions.”

Some MPs and parties will provide answers to questions on their use of taxpayer money, but some clearly won’t. The public is therefore reliant on picking up bits and pieces of information here and there, and reliant on the willingness of politicians to front up on their spending.

Unfortunately, the Government has just introduced new legislation to Parliament called “the Parliament Bill”, but it fails to deal with these issues. Although the bill is supposed to be about modernising the institution – and the Government claims that it will help tidy up MP expenses – it appears to just further embed the secrecy of how politicians use public money.

Clearly, it’s time for reform in this area. But it won’t happen without public pressure on the politicians. Just as turkeys won’t vote for an early Christmas, politicians won’t willingly give the public any more information on how they operate and use the public’s money than they have to.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Ryan Bridge (Newstalk ZB): I'm not against publicly funding our politicians' wardrobes

Tom Day (1News): McDonald’s and a harmonica – what ministers put on their credit cards

Department of Internal Affairs: Ministerial credit card statements and reconciliations

Susan Edmunds (RNZ): What perks do MPs really get?

David Farrar: Some hard to explain MPs expenses

Hamish McNeilly (Stuff): Ghost trip: Crown limo drives hundreds of kilometres with no passengers

Parliament: Members' expense disclosure from 1 April to 30 June 2024

Andrea Vance (Sunday Star Times): This MP spent $39k on flights, but Te Pāti Māori won’t say why (paywalled)

Andrea Vance (The Post): If we can’t afford school lunches, why are we still paying for MPs’ perks? (paywalled)

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The Serious Fraud Office will be looking closely at the list of Fast Track Applications that have been green-lit this week by the Government. The 149 development projects are to be incorporated in the Fast Track Approvals Bill going through Parliament at the moment. It means that the individual infrastructure proposals will get an urgent hearing from the Government’s new Fast Track panel of experts, a mechanism designed to be something of a rubber stamp to authorise public and private developments that Cabinet Ministers want to proceed.

For the Serious Fraud Office (SFO), their concern will be about possible corruption connected with such developments. This is because many private developments involve millions of dollars, some of which can be used to bribe or help “facilitate” obtaining approval. The financial windfalls will be considerable for those fortunate applicants who get the go-ahead to bypass the Resource Management Act and other mechanisms in the public policy process that often stop private companies from doing whatever they want to make a profit.

Serious Fraud Office concerns

The SFO is responsible for detecting, monitoring, and prosecuting private and public sector corruption in New Zealand law. They complain that their job is getting busier as New Zealand becomes more vulnerable to integrity violations around politics and public life. Last year, their case referrals went up 20%.

An insight into the SFO’s detection of corruption was provided recently at a recent Anti-Corruption Forum held at the Office of the Auditor General in Wellington, where one of their senior leaders, Dan Eaton, explained what his agency was worried about in New Zealand at the moment. Eaton provided tips on where the public should be looking at to detect political corruption: “If you’re ever reading your news – wherever you get it from – and you see words like ‘streamline’, ‘speed-up’, ‘red-tape’, or anywhere that there’s a disaster and the government needs to pump money into a local economy – those are all places where the trends would tell you to go and look.”

Eaton explained that the SFO is seeing an increase in corruption and fraud at the moment: “While the current focus might be on gangs and retail crime, and ram raids and the like, it’s clear that fraud (and corruption, as a subset of fraud, as we see it) is quietly harming people seriously, and our economic wellbeing as well. So, we shouldn’t be complacent.”

The “red flags” that Eaton talked about in terms of politicians and businesspeople talking about the need to streamline, speed-up processes, and remove red tape is basically a description of the Fast Track Approvals Act.

Concerns about Cabinet conflicts of interest

Critics of the Fast Track process have questioned whether the streamlined process puts too much power into the hands of a few ministers and political parties. This could make them vulnerable to decision-making based on who they are connected with, who they are lobbied by, and who makes generous political donations.

In contrast, the current process for getting resource consent is a much more open and democratic one. Typically, consents for significant developments occur through an open process in which the public can participate, and expert officials make final decisions.

Under the new process, it’s essentially Cabinet ministers who decide on which developers get their projects authorised. Some officials assist in this process, but ultimately, the process is opaque, and the politicians get the final say. The potential for “backroom deals” is significant.

That’s why critics have been particularly concerned about making the process more transparent. And there’s been a desire to have more scrutiny of the connections between possible Fast Track developers and the politicians authorising them.

Critics have focused on the political donations from people associated with developers to the politicians. For example, the Herald’s Jamie Ensor reminds readers today that Shane Jones and his party are closely connected to one of the successful developers: “Another project selected for inclusion with links to New Zealand First’s Jones is the Kings Quarry expansion in Auckland. As was previously reported by the Herald, Andrew Ritchie, whose company AJR Finance has donated to both New Zealand First and Jones, is also a part-owner and former director of Kings Quarry. Another part-owner and director is Jones’ relation Stan Semenoff.”

Similarly, Ensor reminds us that National are close to property developers that are being put on the Fast Track list: “National also received donations from Fletcher Building and individuals associated with Winton Land Limited, National Green Steel and Carter Group. Those companies had projects listed.”

Senior political journalist Richard Harman expanded on this yesterday – particularly in terms of the connections between National and the Winton property group, which looks to be about to get a Fast-Tracked authorisation for its 3400-house Sunfield housing development in Papakura, Auckland:

“Sunfield’s developer, the Winton Group, is currently suing Kainga Ora for $138.5 million after it refused to allow its development to be a Specified Development Project, which would have fast-tracked its planning application. That is precisely the kind of problem the Fast Track process outlined yesterday is designed to remedy. But Winton is closely linked to National. The former National Finance Minister, Steven Joyce, is a director of the company and interests associated with it and its chairman, Craig Meehan gave National $156,000 in the two years leading up to the election and another $52,000 to Act.”

The Government is refusing to be transparent about its conflicts of interest

Many will be disturbed that the Government continues to rebuff requests for information about the various conflicts of interest that Cabinet Ministers have in awarding Fast Track authorisation to various developers. The Cabinet Office has advised Ministers about handling their potential conflicts of interest, but Infrastructure Minister Chris Bishop is refusing to release this advice.

More concerningly, he’s also not willing to provide any details about the specific conflicts of interest that have been identified within Cabinet, nor how these have been dealt with. In justifying the secrecy, Bishop simply refers to past precedents.

He has also argued that the political donations that he and his colleagues have received from Fast Track developers do not produce any sort of conflicts of interest. He stated on Sunday: “The advice that I’ve received is that donations in and of themselves through parties do not create a conflict of interest for the government”.

Bishop has also been opaque about how the individual conflicts of interest have been dealt with. In a statement yesterday, he merely said that ministers who declared an interest with a particular project “left the room for any discussion at Cabinet Committee or Cabinet relating to that project”. Expanding on this under questioning from journalists, Bishops has added: “There were a variety of ministers with a variety of conflicts, and all of those were managed, declared and managed in the appropriate way”.

The public is expected to simply trust that Ministers have acted honourably regarding any conflicts of interest that they might have with various developers who are being authorised. But few will be content with such a minimalist approach. For example, political editor of The Post, Luke Malpass says: “Given that one of the big concerns about this new legislation was the potential for graft and corruption, this is important. More information on exactly how this was handled will be important for public confidence.”

Government announcement of the List

Some call it “The Corruption List”, but there’s no doubt that plenty of genuinely valuable projects deserve to be on the Government’s list of 149 developments that are being pushed to the front of the queue to be consented. And although there are plenty of mining and mineral extraction proposals, there are also lots of projects put forward by government agencies – including eleven bridges to be built.

Some critics have also suggested it’s just “good PR” that the list includes renewal energy projects like windfarms and plenty of iwi business initiatives. But campaigning groups such as the Environmental Defence Society have acknowledged that plenty of worthy projects are included, and this is a good thing. The groups’ CEO Gary Taylor however complains that the Government’s list of projects to green-light “lacks strategic direction”. He says the list “is a grab bag of ad hoc projects that just happen to be available for the picking now.”

But there is one theme that BusinessDesk editor Pattrick Smellie has identified: lots of regional development for Northland. That region has disproportionately benefitted from 11 projects that are on track for approval. The area just happens to be where Regional Development Minister Shane Jones lives and campaigns.

Smellie says: “Perhaps the most joined-up set of projects are those that would not only connect Whangarei’s Northport to Auckland and beyond far better than today, but also expand the port’s capacity. The string of wharf, rail, and road projects from Northport through to Southdown in Auckland looks like gold for NZ First’s Northland-focused Regional Development Minister Shane Jones.”

Not everyone is cynical or critical about the list of projects. Today, BusinessNZ chief executive Katherine Rich has come out saying how pleased businesses are with the list. Likewise, the Employers and Manufacturers Association credits the announcement as a potential major economic boost.

As to whether the concerns about conflicts of interest will trump the economic benefits of these developments, Shane Jones has an answer when he stresses the billions of dollars involved: “There's well over $60, possibly up to $70 billion worth of capital injection that's going to come into the economy through these reports, and conflict of interest is only one process that we've got to go through in order to inject more momentum into the economy.”

One thing is for certain, to keep a watch on all this, the Serious Fraud Office is going to need a much bigger budget.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Jamie Ensor (Herald): Fast-track approvals projects raise conflict of interest questions, Govt maintains ‘robust’ process followed

Richard Harman (Politik): Bishop answers the call (paywalled)

Herald: NZ business’ warm response for Govt release of infrastructure projects eligible for fast-track consideration (paywalled)

Luke Malpass (Post): Why fast track is the centrepiece of the coalition’s first term (paywalled)

Glenn McConnell (Stuff): Government won’t say how fast track conflicts of interest were managed

Fox Meyer (Newsroom): Fast-track list: ‘zombie projects’ among the first 149 in line

RNZ: Shane Jones calls Fast Track Bill conflict fears politically motivated

Pattrick Smellie (BusinessDesk): Northland connections aplenty in fast track list (paywalled)

Gary Taylor and Shay Schlaepfer (Newsroom): The fast-track bill: the good, the bad and the clumsy

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Business interests are constantly lobbying politicians and officials about the changes they want made to the economy, politics and society. They are a powerful voice in the halls of power, but their influence is usually hidden and secretive. That’s why it’s helpful that each year the New Zealand Herald publishes its “Mood of the Boardroom” report, detailing precisely what CEOs are saying about everything from company tax rates to levels of spending on defence.

The 22^nd edition of the Mood of the Boardroom was published on Thursday, providing an idea of what 103 top businesses are lobbying the government about. Below are the Top 18 takeouts about what CEOs wants from government and other observations from the business elite.

1) CEOs want tax cuts for business

New Zealand has a company tax rate of 28%, which has been gradually decreasing over the years, accompanied by an increasing proportion of the tax take coming from people’s incomes and expenditures. Unsurprisingly, the business elite want to continue that trend and are therefore asking the Coalition Government to cut company tax further.

BusinessNZ is leading the charge, with its former National MP and grocery sector lobbyist, Katherine Rich, recently installed as their new chief executive. Rich told the Herald that New Zealand needs to match Australia’s lower tax rate of 25%, or we will lose investment to the other side of the Tasman.

Thomas Pippos of Deloitte is also a leading advocate for the tax cuts for business, and he’s written an article for the Herald reporting that two-thirds of business leaders want the 28% company tax rate reduced to 25% by 2027. And he reports that some businesses want the rate much lower still: “NZ Windfarms’ chair Craig Stobo suggests we look at Singapore, which has a headline corporate tax rate of 17%.”

2) Business is lobbying for tax relief for the ultra-rich

New Zealand needs to attract more of the ultra-rich to live and invest in this country, according to CEOs surveyed by the Herald. Deloitte’s Thomas Pippos is the key advocate for reducing barriers to high-net-worth individuals by making tax responsibilities more attractive.

He’s written in the Mood of the Boardroom report a plea for tax reform, saying that “taxation of trusts at 39% and the removal of tax depreciation of buildings” are two problems that need to be fixed for the ultra-rich. He also wants the Foreign Investment Fund (FIF) rules made more investor-friendly. Pippos quotes a company director saying: “This is a major deterrent to the introduction of new capital and personal networks to NZ that must be addressed with urgency”.

Pippos cites that other CEOs want action on these issues: “77% of respondents remain concerned about our ability to successfully compete in attracting capital and labour, including around our tax settings. With this amount rising to 85% of those supportive of developing more permanent rules to attract and retain high net worth individuals in New Zealand who otherwise face challenges with their pre-existing investment structures integrating into the domestic tax rules.”

3) CEOs are open to a capital gains tax

One of the more surprising outcomes from the survey of CEOs is their openness to a capital gains tax being implemented. Although business leaders and the wealthy have traditionally opposed greater taxation on income derived from the increasing value of assets, the mood seems to be shifting. The survey shows 41% of CEOs were open to a capital gains tax.

Many CEOs also raised the need for a capital gains tax in discussions about the government’s structural revenue deficit. Some CEOs state an awareness that further taxes on employment and consumption aren’t viable, and a capital gains tax is the only viable alternative. There’s also some awareness that existing or greater state expenditure will be increasingly necessary in many parts of the welfare state, especially health and education. Not surprisingly, therefore, 77% of CEOs see the need for structural changes to be made in the tax system.

4) A growing demand for radical structural economic reform

Get ready for radical economic reform if the business lobby gets their way. There seems to be widespread hunger amongst the business elite to see a significant shakeup of the economy and state. Respondents to the Herald survey believe that the current government's focus on fiscal prudence and incremental reforms is insufficient to address New Zealand's economic challenges. They argue that a more ambitious and transformative agenda, potentially reminiscent of Rogernomics or Ruth Richardson's reforms, is needed to drive significant economic growth and improve productivity.

According to report’s main author, Fran O’Sullivan, “It’s now time to pivot hard and focus on bold moves necessary to spur economic growth. That’s the prevailing sentiment in the 2024 Mood of the Boardroom CEOs survey”.

It’s not yet clear whether the National-led Government is willing to deliver such extensive reforms. Yet, O’Sullivan also reports that Finance Minister Nicola Willis wants to install a new Treasury boss that can provide radicalism: “When it comes to hiring a new Treasury Secretary expectations are clear. Willis is known to favour a successor who has the policy chops and verve of a Graham Scott or Murray Horn who led Treasury through the major economic reforms of the 1980s and early 1990s.”

Notably, the outgoing Treasury Secretary, Caralee McLiesh recently warned that New Zealand required structural changes, especially in terms of the deficit. According to the Mood of the Boardroom, 77% agree.

Much of the focus of the CEOs is on the government’s need to engineer greater economic productivity – which is seen as the big missing ingredient in New Zealand at the moment, which is reminiscent of what CEOs were lobbying for prior to the Rogernomics reforms. Outlining the extent of the problem, economist and business leader Cameron Bagrie says in New Zealand, “Productivity for the whole economy averaged 1.4% per annum between 1993 and 2013 but averaged only 0.2% per annum over the last 10 years.” Hence, many CEOs specified that the Government needs some bold new policies to stimulate economic growth proactively.

5) Business wants deregulation of the economy

The demand to “reduce red-tape” and regulations of the economy is a very strong theme coming from the business sector in the Herald’s report. Numerous CEOs argue that over-regulation is a burden on businesses and is stifling economic growth.

BusinesssNZ’s Katherine Rich most strongly lobbies for this. She says that New Zealand has too much regulation that is not fit for purpose, and argues for “streamlining” of rules for business. Similarly, Deloitte chair Thomas Pippos argues that over-regulation in New Zealand “creates a deadweight cost on the economy”.

For this reason, CEOs are positive about the Government’s establishment of a Ministry of Regulation. Its importance in the Government’s agenda is rated as 3.5 out of 5.

Employers and Manufacturers Association says that they are also lobbying for specific deregulation for their members – a “tidy up” of the Holidays Act. They also want the Government to make the education system more responsive to the needs of business.

6) Public sector reform being encouraged

CEOs are already highly supportive of Nicola Willis’ financial cuts to public agencies – 83% of respondents support her imposition of the 6.5% budget cuts, with some respondents wanting bigger cuts.

Businesses also appear to want reforms to make the public sector become closer to the private sector. Reporting on this, Bill Bennett says: “A clear majority of respondents (81%) support more private-sector appointments to the public sector. Only 3% are against and 16% are unsure.” Furthermore, he reports, “Another leader would like to see the public sector offer secondments to private sector executives.”

CEOs also want the public sector to prioritise the private sector’s needs more with 66% wanting the number one priority of agencies to be supporting economic growth.

7) Business is lobbying for the state to fix infrastructure

The state of New Zealand’s infrastructure is a core concern for businesses. CEOs were asked: “How confident are you that New Zealand is investing enough in the renewal of critical infrastructure, such as state highways, local roads and water systems, to maintain these assets for the long term?” On a scale of 1 to 5, businesses registered an average confidence rating of only 2.1/5.

The business elite are, however, very pleased with the Government’s new National Infrastructure Agency and the development of a 30-year infrastructure project pipeline – they rated this as the Government’s most important reforms so far with a score of 4.4 out of 5.

8) Business wants Public Private Partnerships to be utilised more for infrastructure

There’s a strong belief that the private sector should be entrusted with government contracts to build, own and maintain public infrastructure, using “public private partnerships” in which the state pays for public infrastructure to be delivered by private contractors who operate for profit.

Asked about Public Private Partnerships (PPPs), 95% of CEOs said the Government should be open to funding critical infrastructure in this way. CEOs believe PPPs help harness expertise and resources from the private sector.

However, the report also conveys that some CEOs strongly dissent on this, believing that PPPs end up being too expensive and the contracts too complicated.

9) Businesses are backing the Fast Track Act

The Resource Management Act is unpopular with business, and there seems to be a consensus in the boardrooms that the Government’s new Fast Tract Act process is the right way to deal with the infrastructure deficit. Overall, the CEOs rate the importance of the Fast Track Act as 4.1/5, and therefore one of the most essential new reforms.

10) CEOs complain about short-termism and flip-flopping

There’s a frustration amongst business leaders that National and Labour governments continue to cancel each other's reforms, and then fail to deal with some of the big problems and challenges. The political system is deemed to be mired in “short-termism”.

Some CEOs agree with the politicians that the electoral term is too short, and therefore want elections less frequently. For example, Mainfreight’s Don Braid says: “A longer political cycle of four or, even better, five years would allow government to plan and deliver rather than worrying about political consensus.”

In general the business leaders seem to want National and Labour to find more bipartisan agreement on policies, producing a more stable business environment. And unsurprisingly, there’s an expressed need for all governments to consult more with business interests.

11) Business contentment with a business-friendly coalition government

It’s no surprise that business leaders are generally happy with the new coalition government and the business-friendly political parties and politicians involved. What is interesting is that the politician they rate the highest is Education and Immigration Minister, Erica Stanford, who has received an evaluation of 4 out of 5.

In contrast, Prime Minister Christopher Luxon only gets a rating of 3.7/5, making him the sixth-best performer in the Government, according to CEOs. Other party leaders in the coalition are evaluated even lower: Winston Peters is just behind Luxon, on 3.66/5. And David Seymour gets rated 3.4/5.

12) Businesses want to see business-orientated reform

It’s no surprise that two of the highest evaluated ministers are Finance Minister Nicola Willis and Infrastructure Minister Chris Bishop – both rated 3.9/5. These are the ministers delivering the core demands of the business sector (along with Erica Stanford in Education).

Again, it’s not surprising that the reforms that business see as most important are those relating to economy, infrastructure and their business operating environment:

• Infrastructure reforms: 4.4/5

• Education reforms: 4.2/5

• Crime reforms: 4.1/5

• Building international connections: 4.1/5

• Fast Track Act: 4.1/5

In contrast, the business appears to have little interest in the Māori-Crown relations, Treaty, and related culture war reforms, giving this area a rating of only 2.9/5. Similarly, the importance of the repeal of NZ’s smokefree laws is given a rating of only 1.97/5.

13) CEOs don’t rate the current opposition parties

While Labour was in power, the business CEO gave many of the last ministers very high ratings – especially politicians such as Jacinda Ardern, Grant Robertson, and Andrew Little. Yet, now in opposition, the remaining frontbench Labour MPs are being rated very lowly. Labour leader Chris Hipkins gets a derisory 2.3/5 for his performance. He’s being surpassed by Kieran McAnulty (2.8), Barbara Edmonds (2.7), and Ayesha Verrall (2.4). The lowest performers on the frontbench, according to the CEOs, are: Willie Jackson, Willow Jean Prime, and Jan Tinetti (all about 1.9).

Other opposition leaders are also rated poorly by business at the moment. For the Greens, Chlöe Swarbrick receives a rating of 2.5/5, while co-leader Marama Davidson is on only 1.8/5. Te Pati Māori’s Debbie Ngarewa-Packer and Rawiri Waititi share the same rating of only 1.7/5.

14) The tearing of the social fabric concerns business

Businesses make their best profits when society is stable and prosperous. But increasing social divisions and turmoil are threatening this stability at the moment. And business elites are worried about what this means for business.

Herald journalist Tim McCready explains this in the Mood of the Business report: “The lack of societal cohesion and its impact on economic stability was also raised as another point of concern.” Commenting on this, business director Rob Campbell says, the “instability and uncertainty of social, economic, and environmental conditions dominate.”

Economist Cameron Bagrie also writes about this in his article, saying: “Businesses are aware of the corrosiveness a divided society has on the economy, recognising a key role of government in wealth inequality is ensuring minimum levels of welfare and income (67% of respondents)”.

A number of CEOs are quoted expressing their concern about increasing strains on the social fabric. Blair Glubb of Uno Loco says that one of his top concerns at the moment is: “Divisive social policies that weaken New Zealand as a brand and as a society.” Simon Bennett of Accordant lists two major concerns in this area: 1) “Inequality. We need social cohesion and incentives for people to get a lift up” and 2) “Separatism. We need one country one people”.

Paul Newfield of Morrison, states his major concern is: “Widening social division: We need to move away from small-minded divisive issues and focus on building a better New Zealand together.” And Silvana Schenone of Jarden lists the following as their major concern: “Social ‘unrest’: Many issues: Relationship with Māori, crime, youth education, drug use. We need to heavily invest in education, opportunities in New Zealand for young people. We need to encourage all sectors to work together.”

15) Business’ favourite government department is Mfat

Business leaders were asked to rate the effectiveness of government agencies. The top rating was given to the Ministry of Foreign Affairs and Trade (Mfat) – with an average score of 3.7/5. This isn’t surprising as the department is particularly pro-business, and prioritises the role of supporting private enterprise overseas. And related to this, relatively high scores were given by CEOs to New Zealand Trade and Enterprise (3.5/5) and the Ministry for Primary Industries (3.3/5). The Department of Prime Minister and Cabinet (DPMC) also scored very highly, with 3.6/5.

In contrast, however, Treasury – which used to be a favourite of business – is now only rated at 3/5. One CEO is quoted: “Treasury is improving but it’s a pale imitation of the quality ideas shop it was a decade ago”.

At the bottom end of CEO assessments are: Ministry of Business, Innovation and Employment (MBIE) at 2.6/5, the Ministry of Transport, and the Ministry of Education. The lowest rated agency was the Ministry of Health on 2.1/5.

16) A concern to walk the fine line on China Vs US

Most CEOs think that Prime Minister Christopher Luxon is doing a good job of the fine line he’s walking to satisfy both Washington and Beijing. According to Fran O’Sullivan, “72% of respondents to the NZ Herald’s 2024 CEOs survey believe he has struck the right balance”.

Some businesses, however, are reliant on New Zealand’s good trading relations with China, and are being reported as having concern that Luxon is too focused on traditional alliances. One exporter CEO is quoted saying “He does need to be careful to play too much to US interests” and Cordis hotel CEO Craig Bonner says Luxon is “too hawkish”.

17) Business is pro-Aukus and wants greater defence spending

Most CEOs want New Zealand to join up to the second pillar of the Aukus military alliance: 53% said they are in favour, 12% are opposed and 35% unsure. Amongst those speaking out in favour, Air New Zealand chair Therese Walsh stated: “We are too small to lose the protection of these nations”. And Foodstuffs North Island CEO Chris Quin wants involvement in Aukus to “keep our people safe”.

Economist Cameron Bagrie writes in the report that New Zealand should “Expect pressure from our Aukus ‘friends’ to lift defence spending. And Most CEOs say they are keen on this: 64% are favourable, against 23% in opposition, and 13% are unsure.

18) CEOs want Kamala Harris to beat Donald Trump to be US President

Former Prime Minister John Key has recently expressed his backing for Republican candidate Donald Trump to win the US presidency. But he seems to be out of sync with New Zealand CEOs who are heavily favourable to the Democrat nominee Kamala Harris.

The Herald’s Tim McCready reports “82% of respondents favour Harris, while only 4% support Trump, with a further 10% unsure and 4% opting for ‘other’.”

Time for a “Mood of the Waiting Room” report?

The Herald’s Mood of the Boardroom report is invaluable reading for those that want to know where the current coalition Government is headed. The sources interviewed and surveyed by the Herald offer insights into the vested interests present in New Zealand society, and about what they are lobbying politicians about.

Obviously, the individuals and the organisations represented in the report have a concern to promote economic growth, reduce costs, and enhance profitability. This is evident in their calls for lower corporate taxes, streamlined regulations, and infrastructure development.

Of course, these demands are only one side of a big struggle going on at the moment. And perhaps it’s now time to hear about the voices in “the staffroom”. Or given problems in places like the health system, we need to hear more about the “mood of the waiting room”.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Cameron Bagrie (Herald): Mood of the Boardroom: Bring on the tax debate (paywalled)

Bill Bennett (Herald): The Mood of the Boardroom at a glance

Bill Bennett (Herald): Majority of business leaders support Nicola Willis’ public sector spending cuts - Mood of the Boardroom (paywalled)

Bill Bennett (Herald): Infrastructure strategy needed now, say business leaders (paywalled)

Duncan Bridgeman (Herald): Mood of the Boardroom: Chief executives rank government ministers and Labour leaders

Herald: Mood of the Boardroom: CEOs rate Christopher Luxon’s Cabinet

Herald: Top issues facing nation - Chiefs have their say (paywalled)

Tim McCready (Herald): Kamala Harris leads among NZ CEOs in US presidential election preference

Tim McCready (Herald): Greens, Te Pāti Māori political leaders face mixed ratings in Mood of the Boardroom survey (paywalled)

Tim McCready (Herald): Act Party leader David Seymour strikes right note with CEOs - Mood of the Boardroom (paywalled)

Tim McCready (Herald): New Zealand businesses navigate geopolitical risks amid global instability

Tim McCready (Herald): Labour Party leader Chris Hipkins’ low profile, low ratings in Mood of the Boardroom survey

Tim McCready (Herald): Mood of the Boardroom: How CEO’s rate Labour’s Barbara Edmonds

Fran O'Sullivan (Herald): MFAT tops Mood of the Boardroom survey most effective NZ Government ministry (paywalled)

Fran O'Sullivan (Herald): Winston Peters ‘in his sweet spot’ in foreign affairs, praised in Mood of the Boardroom survey

Fran O’Sullivan (Herald): New Zealand CEOs urge Government to pivot for economic growth (paywalled)

Fran O'Sullivan (Herald): Prime Minister Christopher Luxon finds right balance on geopolitical tightrope (paywalled)

Thomas Pippos (Herald): Taxation of capital gaining momentum — Yeah, Nah? (paywalled)

Graham Skellern (Herald): BusinessNZ’s Katherine Rich calls for bold investments to tackle New Zealand’s economic woes

Graham Skellern (Herald): EMA aims for a profitable, innovative organisation post-Covid

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Is Casey Costello up to the job of reducing smoking and tobacco use? Many are starting to conclude that the answer is “no”. The Minister is facing a continued vote of “no confidence”, and the Opposition has raised the stakes by saying some of her decisions on tobacco “stink like corruption”.

The latest blow to Casey Costello comes from business leaders. The Herald published their annual Mood of the Boardroom this morning, and CEOs judged Costello’s performance as the worst in the Cabinet, with a score of only 2.55 out of 5. The only ministers considered to be performing worse than her are two ministers outside of Cabinet, who were demoted earlier this year – Melissa Lee and Penny Simmonds.

Incompetence in regulating heated tobacco products

Incredulity is being expressed this week about Costello’s handling of the rules about Heated Tobacco Products, or HTPs. On the one hand, Costello has convinced her Government to reduce excise taxes on these products by 50 per cent to encourage their use as a smoking cessation device. On the other hand, this week, the Government banned the sale of the only HTP device on the market.

The absurd situation is not what the Government intended, and now causes a headache that is difficult to fix. The problem has arisen because the Government, especially the new Minister in charge of tobacco and smoking, Casey Costello, is in favour of HTPs because they might help in getting people to quit smoking.

Essentially, HTPs are alternatives to vaping. Hence Costello has convinced her colleagues to reduce taxes on the tobacco products that get used by the devices. And Cabinet agreed to put aside $216m in the Budget to make up for the potential decrease in tax revenue because of the tax cut.

However, the new Government has also inherited the last Labour Government’s tighter rules on vape and HTP devices. Labour had scheduled the implementation of a new rule that means that vape and HTP devices can only be sold if they have a removable battery and a child safety mechanism. The problem is that the main HTP device on the market in New Zealand is the Iqos sold by Philip Morris, which doesn’t meet those criteria.

Hence, the Iqos device is now illegal. While Philip Morris sells a few other HTP devices, these are hard to find, and until now, that made up only three percent of the market for HTP devices.

Costello wasn’t aware of this problem. She did, however, try to delay the new regulations. Initially, the ban on such devices was scheduled by the last Government to come into practice on 21 March this year. Costello tried to convince her Cabinet colleagues to delay this ban for two years, but they only agreed to a six-month deferral, which meant the ban came into effect on 1 October – Tuesday this week.

There’s now some confusion about what Cabinet knew about the potential problem. Some say that the Government and Prime Minister Luxon have been made to look stupid because of the situation.

Today, the Otago Daily Times newspaper calls the situation “beyond farcical” and says the Prime Minister “looks more like a weak boss being pushed around” by Costello. The paper also says that Luxon’s “attempts to convince the public” that “Costello is the heroine of anti-smoking measures, are almost laugh-out-loud absurd.” The newspaper calls for him to take a harder line on the Minister.

Officials advised against reducing taxes on Heated Tobacco Products

On Monday, RNZ revealed that the Treasury had advised Costello against the tax cut on HTPs. Their advice was based on several issues, but their main concern was that HTPs caused harm and that reducing tax on them would encourage their use.

Although Costello has claimed that HTPs have a “similar risk profiling to vapes”, RNZ’s Guyon Espiner uncovered that Treasury advised her that they are actually toxic and more harmful than vaping. According to Treasury documents, the “evidence is clear that HTPs are more harmful than vaping” and that it might turn out that they are as harmful as cigarettes.

According to Treasury, “emerging research suggests that heated/smokeless tobacco products still produce toxic emissions similar to those in cigarette smoke, and also expose users to some toxicants specific to heated/smokeless products which could also expose bystanders”. They conclude that HTPs “may generate harm through exposure to toxicants, cardiovascular impacts, and chronic respiratory disease”.

The worry for Treasury was that a reduction in taxation on HTPs might send a message that they were safer: “Removal of duty is likely to be interpreted as a Ministry of Health endorsement of lesser harms from HTPs compared to smoked tobacco and use as a smoking cessation support, for which there is insufficient evidence, and to increase awareness of their availability.”

Treasury was also concerned that a reduction in tax on HTP might not actually be passed onto consumers anyhow, meaning that Philip Morris would be the biggest winner from increased profits, especially since the company has a monopoly in the HTP in New Zealand.

Costello found “independent advice” that she preferred

Guyon Espiner’s research on Cabinet’s decision-making processes on HTPs showed that Costello then found “alternative sources to back up her claim that HTPs help people quit”. Official documents justifying the Minister's decision record: “I, the Associate Minister of Health, have received independent advice on the efficacy of HTPs as a smoking cessation tool”.

This independent advice has become a mystery this week, with the Prime Minister admitting that he hadn’t seen it, but still expressing confidence in Costello on the issue. Costello herself wouldn’t answer Espiner’s questions about the advice, however. She declined to be interviewed or say where she got the independent advice from.

Yesterday, however, this changed. Costello explained to RNZ political editor Jo Moir that this independent advice hadn’t been presented to Cabinet: “It's 10 to 12 pages long. It's not usual to attach evidence to a Cabinet paper”. More reported yesterday that the independent advice “includes international studies, advice from ASH, and other evidence from countries like Japan regarding their use of HTPs to cut smoking rates”.

What’s more, Moir reported that Costello has agreed to make this crucial advice public. Costello says: “This will all be released, it's not an issue”. The Minister expressed surprise that anyone was interested in it.

Labour on the attack

In response to the ongoing scandal, the Labour Opposition are doing two relatively rare things: 1) calling for the minister to resign, and 2) calling the decision “corrupt”.

While both these things might be viewed as hyperbolic, Labour doesn’t normally make these calls without careful thought. If oppositions constantly call for ministers to resign whenever they disagree with them, it ends up looking petty and the demand for a resignation loses it power over time.

And the use of the “C word” is also rarely used by either main party. This is because such a weaponised word can rachet up tensions between Labour and National, with the other side throwing back other allegations about their opponent’s integrity, sometimes leading to both sides being damaged. Labour will only be attacking Costello is they truly believe there’s a chance that the Minister is trouble and may lose their job.

Labour’s health spokesperson, Ayesha Verrall, is leading the charge against Costello. She says the latest developments raise “serious questions about what Casey Costello told the Prime Minister and when”. Given that Philip Morris’ HTP device is now banned even though the products for the device are now considerably cheaper, Verrall suggests that Costello must have either “misled” Luxon by not saying “what was really going on with these products – or she's incompetent”.

Verrall says the move to reduce tax on HTPs “is the closest decision I can think of where government has acted in the financial interest of a single company that only does harm”. Verrall has said there was “no reason for making these changes other than benefiting the tobacco industry” and that it “does absolutely nothing for the health of New Zealanders. It is just a handout to the tobacco industry.” And more aggressively, Verrall says: “The whole thing stinks like corruption”.

For the record, however, Costello bristles against any such ideas that she is in the pocket of Big Tobacco. She told 1News yesterday that she has never had any engagement ever” with the tobacco companies.

Costello also told RNZ’s Jo Moir yesterday that she found that whole scandal “frustrating” and that “I suppose what hurts me is, you know, my Dad died from respiratory illness because of smoking.”. She stated: “I hate smoking, I've never smoked in my life, and so I'm absolutely committed to achieving this target… Māori have the highest smoking rates. I'm a Māori. I want people to know that there's hope, and you can quit smoking.”

HTP devices still being sold illegally

The farcical situation with the Government’s prohibition on current HTP devices is worsened by reports that many retailers are not enforcing the ban. RNZ reported yesterday that “An undercover sting led by grassroots volunteer group Vape-Free Kids NZ has unveiled more than 20 stores across Auckland, Wellington and Christchurch selling IQOS heated tobacco devices.”

RNZ then verified this by purchasing the banned products as well. They reported that one store in Christchurch sold them the prohibited device on the proviso that the purchaser “didn't work for the government”. Similarly, 1News also found shops in Wellington that were willing to sell the device.

Fails on integrity, transparency and competency

Pressure has been building on Casey Costello this week over the HTP issue. But unfortunately it’s not the first time. There’s been a sequence of mini scandals relating to her smoke-free portfolio, all of which have ended in her being painted as acting in favour of the tobacco industry.

Probably Costello’s biggest enemy now is Health Coalition Aotearoa, who are highlighting how the sequence of scandals means, in their view, Luxon should sack her. Spokesperson Chris Bullen, an Auckland University public health expert said this week: “I think, you know, integrity, fail, transparency, fail, competency fail. Three Strikes should be out. I think the Prime Minister should stand up, take leadership and find someone who could better do the job and get us to smoke free 2025.”

But increasingly, the focus might also go on other senior members of the Government, who have been part of the tobacco decision making. Prime Minister Christopher Luxon is increasingly having to answer for Costello. And today’s Otago Daily Times editorial is stinging about his apparent ignorance about Costello’s “independent advice” and why he continues to back her:

“Would any chief executive commanding a big salary be happy to support a project that could cost a company millions of dollars without wanting to see the information supporting that move? Is turning a blind eye to the expensive behaviour of junior executives which bring the company into disrepute the way Mr Luxon believes companies should roll (to use his business lingo)?”

Of course, Luxon and his colleagues probably also know a fair bit about the tobacco industry. After all, Chris Bishop worked as a lobbyist for Philip Morris before entering Parliament. Finance Minister Nicola Willis used to be a director of the think tank the New Zealand Initiative, which has been funded by British American Tobacco and Imperial Brands.

But even Luxon has a close connection to the tobacco industry – his sister-in-law, Barbara Luxon, has worked for British American Tobacco as a trade and marketing coordinator for the last twenty years.

Therefore, if Labour and Health Coalition Aotearoa ever got their way, and Luxon sacked Costello, they might find she’s replaced by someone else with even better connections to big tobacco.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Previous analysis on this issue:

Bryce Edwards: Finding Casey Costello’s “smoking gun”

Bryce Edwards: Is Casey Costello fit to be a minister?

Bryce Edwards: The Role of tobacco interests in making government policy

Key Sources

Adam Burns (RNZ): Vape stores caught selling non-compliant Heated Tobacco Products

Felix Desmarais (1News): Smoked out: Banned heated tobacco devices still being sold

Richard Edwards, Janet Hoek, Andrew Waa, Nick Wilson (Public Health Communications Centre): Risk proportionate regulation of nicotine and tobacco products: More rhetoric than reality

Guyon Espiner (RNZ): 'Most benefit' of government's tobacco tax cuts will go to tobacco company Philip Morris, officials told Casey Costello

Guyon Espiner (RNZ): Casey Costello’s tobacco tax cut plan stalled as device pulled from shelves

Jo Moir (RNZ): Casey Costello will release 'independent advice' about benefits of heated tobacco products

ODT: Editorial Getting on the case of Costello (paywalled)

RNZ: 'Stinks like corruption': Labour on tax cut helping tobacco giant

RNZ: Christopher Luxon hasn't seen advice on heated tobacco tax cut

Bridie Witton (Stuff): ‘Resign’: Growing calls for Casey Costello to lose portfolios over heated tobacco products

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Prime Minister Christopher Luxon has just sold two of his houses, reportedly making a capital gain of $460,000. It follows on from Jacinda Ardern also selling her house while in office, making a gain of $333,000 after owning her Pt Chevalier property for just two years. Neither of them has had to pay any tax on their windfalls.

These examples of politicians profiting from the housing affordability crisis raise essential issues about conflicts of interest that leaders have in deciding upon housing and tax policies. In making such large profits from their housing investments, the question is whether politicians are reluctant to change the policy settings.

For example, it might be in the public interest to introduce a capital gains tax, but notably both Luxon and Ardern emphatically ruled out such a change. Has their antipathy towards a capital gains tax – or indeed other significant reforms to alleviate the housing crisis – been a case of being corrupted by self-interest?

Politicians get to keep their capital gains

Ardern and Luxon are accused of pocketing substantial annual salaries (nearly $500,000) while also making comparable money from real estate that isn't taxed. For example, Bernard Hickey makes the point today that Luxon will pay $168,260 in income tax on his $484,200 Beehive salary this year, but he'll pay zero tax on his capital gain of $460,000.

Luxon's $460,000 housing profit comes from the sale of two properties. The first is a rental property in Onehunga, which Luxon bought for $650,000 in 2015 and reportedly sold this month for $930,000. The second is his Wellington apartment opposite Parliament in the Kate Sheppard complex. He bought this for $795,000 in 2020 and has sold it for $975,000 four years later.

1News challenged Luxon yesterday about whether he thought he should be paying tax on the income from these sales, and he replied: "No, we don't have capital gains tax in New Zealand… We think it would be bad for New Zealand because you don't tax your way out of recession".

With other questions being put to him about his profits from the sales, Luxon responded: "I don't know what the point of the questioning is" and he explained further: "We don't believe in a capital gains tax or a wealth tax. We think, for people who actually generate wealth in this country, it's a massive disincentive".

Today the questions on the capital gains have continued. Appearing on Newstalk ZB, Luxon told Heather du Plessis Allan this morning: "if we're going to criticise people for being successful, let's be clear, I'm wealthy and I'm sorted".

He also explained why he sold his Wellington apartment: "I came to politics four years ago. I bought an apartment in October 2020 and then I became prime minister. Normally a prime minister would sell their apartment and move into the Premier House. But because there was basic maintenance that needed to be done I couldn't… Now I'm moving in, and I don't need the apartment, so I'm selling it. That's what John Key did when he became prime minister."

RNZ has also reported that the upgrades that have just been undertaken on Premier House could cost up to $200,000. So far, the invoices have amounted to $170,000 for refurbishments and $15,000 for new items for the house.

Do housing assets give politicians a "conflict of interest"?

The Labour Party have accused the Prime Minister of being in a "conflicted position" because of his windfall. Labour's deputy leader Carmel Sepuloni has connected Luxon's personal fortunes with his refusal to implement a capital gains tax. She told 1News yesterday that because of his windfall, Luxon "should be willing to have a conversation about a more progressive tax policy." Sepuloni also hit out at his housing arrangements, saying: "There's just a general sense of entitlement with the Prime Minister that we have seen."

Luxon has been reluctant to justify himself to the public on his sale of houses. Last month, when the sale of his Onehunga rental came up, he answered media questions on this with a statement from a spokesperson: "The management of the Luxons' properties are private matters which are unrelated to Mr Luxon's capacity as prime minister".

Last year, on TVNZ's Q+A he also told Jack Tame that his significant property ownership didn't impact his judgement on housing policy. Yet, interestingly, his colleague, Act leader David Seymour has suggested otherwise.

During the last National-led Government, Seymour didn't own any property, and he argued that those politicians that do have property are conflicted: "The fact that the average National MP owns 2.2 properties of their own might suggest why they've spent a lot of time introducing solutions that you'd almost suspect weren't supposed to work – because they certainly haven't".

Similarly, then Green Party co-leader James Shaw (who at that stage didn't own a house) said: "The fact that the vast majority of our members of Parliament own multiple properties is quite a good signal for why there isn't a capital gains tax in this country. There's very little appetite amongst the National caucus for a proper capital gains tax."

How many houses do Government MPs and Ministers own?

According to the 2024 "Register of Pecuniary Interests", the average National MP now owns more than 2.2 properties. In fact, National Party MPs are the most significant property owners in Parliament, with interests in 136 properties, an average of 2.8 per MP. The Act caucus has 28 houses – 2.5 houses on average. NZ First's caucus has 14 properties – 1.8 each.

In terms of Cabinet ministers, they own 60 houses, meaning, on average, they have a stake in 3 houses each. Sitting on the top rung, of course, Prime Minister Luxon has until recently owned seven properties – four investment properties, two residential properties in Auckland, and one apartment in Wellington.

The closest behind Luxon is Mark Mitchell, with six properties, again all in Auckland, apart from his Wellington apartment. Shane Jones has the third-largest property empire, with five residential properties in the Far North. Deputy Prime Minister Winston Peters declares three properties—a house and land in Northland's Whananaki and a home in Auckland.

Outside of Cabinet, the National MPs with large numbers of properties are Andrew Bayley (7 properties), Carlos Cheung (6), Penny Simmonds (5), Gerry Brownlee (5), and Barbara Kuriger (5).

Opposition parties own plenty of houses, too. Collectively, the Parliament owns 261 homes, or 2.2 properties each. Of course, the number of dwellings owned varies greatly between MPs. A total of 91 MPs had a stake in more than one property, and 63 had a stake in three or more properties. At the extremes, nine MPs said they own no property, while ten MPs own seven houses.

The public is right to be suspicious of property-owning politicians

Luxon is free to continue asserting that his considerable property wealth and windfalls have no impact on his approach to housing or taxation. But it's probably not very convincing to most people. Even those supportive of the Government and happy that Luxon has been financially successful might still suspect his stances on things like capital gains taxes or social housing construction might be impacted by his own financial situation.

Labour should, however, be careful not to be too petty or partisan in their critiques of the Prime Minister on this. After all, many of their own MPs have multiple properties, too – Jenny Salesa owns five. And the story of Prime Minister Jacinda Ardern, and then Chris Hipkins, ruling out a capital gains tax also should make them pause before they hypocritically accuse Luxon of being self-serving or conflicted.

Yet it does raise a useful question about MPs being so heavily invested in property and whether they therefore try to preserve the status quo because they are personally advantaged by it. MPs are supposed to serve the public interest, not their own self-interest. And so, the concentration of property ownership among MPs and the potential influence this might have on policy decisions, especially in a housing crisis, raises valid concerns about conflicts of interest and erodes public trust.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Sanda Arambepola (Stuff): 'I'm wealthy and I'm sorted': PM makes no apology for capital gains on Wellington apartment

Nicole Barratt (Herald): PM Jacinda Ardern's former Pt Chevalier home sells for $1.32m

Felix Desmarais (1News): Revealed: Luxon set to gain almost $500k on property sales

Bryce Edwards (Democracy Project): MPs own 2.2 houses on average

Bryce Edwards (Democracy Project): MPs' financial interests under scrutiny

Raphael Franks (Herald): Prime Minister Christopher Luxon responds to attention on Wellington apartment sale on Newstalk ZB

Jo Moir (RNZ): Christopher Luxon moves into refurbished Premier House

One Roof: Christopher Luxon $945,000 richer? PM find buyer for his investment property

Esther Taunton (Stuff): Christopher Luxon sells Onehunga, Auckland, investment property

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Jacinda Ardern is cashing in on her celebrity and former role as New Zealand Prime Minister. She's joined the top tier of political celebrities on the international speakers' circuit and is making millions of dollars.

This news was broken as the frontpage story on The Post on Saturday in an article by Kelly Dennett titled "Dame Jacinda Ardern a hit on the six-figure global speaking circuit". According to this, "some of the world's biggest companies are thought to be spending six figures per event to hear her speak." One of the organisations claiming to represent Ardern in the Asian market told the newspaper that Ardern's fee for events was about $316,000.

According to the Post, Ardern "has been criss-crossing the globe as a keynote speaker in private, paid or public speaking engagements ‒ from discussing leadership and environmental sustainability at a closed-door Bank of Singapore event, to pontificating on socially-just architectural design at the American Institute of Architects' annual conference in San Francisco, to chatting climate change in New York City this week."

The Post-politics speaking circuit is the new form of business networking

Traditionally, politicians leave public office to retire or simply carry on their campaigning advocacy on a not-for-profit basis. However, there is now a lucrative trend in which politicians can leverage their time in office to make millions of dollars in talking to businesses and elite NGOs. Ex-politicians' incomes are, therefore significantly greater than they received in public office.

These ex-politicians are in high demand to help businesspeople understand the political world, often so that they can better influence the public policy process. There is now an industry that has built up around recruiting and selling former decision-makers as if they are rock stars. A "speaking circuit" exists for former prime ministers and presidents to give keynote speeches for which they receive exorbitant appearance fees.

Bill Clinton, the most famous speaker on the circuit, has amassed an estimated US$80m fortune after leaving the Whitehouse with relatively little wealth. And Barrack Obama is on the same trajectory – he even travelled to Auckland in 2018 for a speech paid for by the New Zealand Government.

Former British PM Tony Blair has also built up a fortune of around £60m from speaking and consulting work, especially for banks and foreign governments. His Tory successor, David Cameron, has also been busy on the international circuit, making a fortune from speaking in China. More recently, former PM Teresa May declared £408,200 for six speeches to the Cambridge Speaker Series. And Boris Johnson, on leaving 10 Downing St, immediately received a £2.5m advance payment for his upcoming speeches around the world.

New Zealand politicians on the speaker circuit

Jacinda Ardern isn't the only former New Zealand politician making a fortune from such appearances. John Key also headed off to the US after leaving office and made large amounts of money – he won't say how much, except: "it's quite remarkable actually what they pay". He signed up with the New York-based Harry Walker Agency, which also facilitated other top speakers like Clinton.

Key's finance minister and successor for PM, Bill English, has participated in paid speaking events, too. Even before he left Parliament, in 2017, he was reported as the guest speaker to the exclusive Table Club, which held an event at Hurakia Lodge on Rakino Island in the Hauraki Gulf. The 27 ultra-high net worth individuals who travelled to the event by helicopter to hear English speak, only qualified by having more than $50 million to invest.

Jenny Shipley has been another former National PM in demand. Her speciality has been "global megatrends, economic and social reform, and the growing role of women in politics".

Most former New Zealand politicians use the Saxton Global agency, which also promotes former Australian leaders such as John Howard, Julia Gillard, Malcolm Turnbull, and Paul Keating. Their local Auckland agency, "Celebrity Speakers", lists the following politicians on their books: John Key, Helen Clark, Bill English, Jenny Shipley, Simon Bridges, Paula Bennett, Steven Joyce, Tim Groser, and Maggie Barry.

Although the website doesn't list who the speakers have been hired by, there some signs in the feedback from clients: English has spoken to "Think China", Clark to the Asia Development Bank and PWC, Bridges to the Institute of Internal Auditors, Bennett to L'Oreal, Joyce to DMS Progrowers and the Bay of Plenty Regional Council, Tim Groser to the Institute of Finance Professionals, and Shipley has spoken to Barfoot and Thompson, as well as the more mysterious NZ Leather & Shoe Research Association (who gave feedback that she was "Authoritative and absorbing. Everyone was greatly impressed by Jenny – she's a terrific person").

Is it ethical for former politicians to enrich themselves by talking to the wealthy?

In the weekend, the Post quoted PR/lobbying expert Jane Vesty defending Ardern's new money-making scheme, saying that the former PM is "a natural choice for corporate and public speaking events". In general, Vesty argued that former politicians deserve to be well-paid through such events: "After years of public service, they are entitled to harness their intellectual property, for example through books, public speaking, think tanks and boards."

This idea that politicians should monetise their time in office is new. In the past, former prime ministers and senior politicians were expected to carry out public service after they finished their time in the Beehive. After all, they are well-remunerated in the top job. Ardern earned about half a million dollars a year, making her one of the highest-paid heads of government in the world. And, as with other former PMs, she can now claim a post-PM allowance and all sorts of travel, perks and security arrangements. And, of course, all politicians have access to their gold-plated superannuation scheme. These generous arrangements are meant to alleviate the temptations for PMs to have post-politics careers in mind while governing.

Yet, that is the concern – if prime ministers and Cabinet Ministers see their time as decision-makers as simply a stepping stone to more lucrative post-politics careers then it might have an impact on what they do while in office. The problem is that as this becomes a more ingrained conveyor belt, whereby politicians have expectations of a lucrative post-Beehive career as a result of their time in power, then it can have an anticipatory impact on what they do in power.

It makes them more inclined to consciously or unconsciously use their time in office essentially as a job interview for the future. They become more likely to create a positive global image for themselves, with less concern for their domestic popularity. Governing becomes more about the world stage and being on the covers of international magazines than improving life for those at the bottom of the heaps of society. And, of course, politicians with an eye on future global jobs will be more inclined to stay on the right side of international interests, from banks to big tech.

Is it time to re-think the role of former PMs?

The potential conflict of interest problem is likely to worsen as politicians get younger. In the past, politicians came into power after having careers in other industries entirely separate to politics. In this sense, going into Parliament was more of a post-employment role, rather than a stepping stone to a more highly-paid business job. In fact, many former PMs died in office or went into retirement.

Now, politicians enter Parliament and make it to the top jobs at a younger age. So, whereas in the past, former PMs tended to be much older and would retire from public life entirely once departing politics, our younger, former PMs and ministers expect to move on to other endeavours. Hence, Ardern is only 44 years old, and like Key or English, she could be monetising her time in office for many decades to come.

New Zealand has no rules to prevent politicians from leveraging their time in public office for profit. In other countries, there are attempts to make sure that conflicts of interests don't occur in this regard.

For example, in the UK, the Advisory Committee on Business Appointments is supposed to clear any such contracts before former politicians sign them in the few years after they leave high office. This is because there are concerns about the impact of senior politicians accepting what might be seen as "after-office bribe payments" when such politicians still have influence with politicians and officials and can influence decision-making.

British journalist and elite-watcher Simon Kuper wrote about this in the Guardian in July arguing that there needed to be stronger rules to stop former PMs cashing in on their time in office. He argued: "The sight of the country's best known politicians renting themselves out to dubious clients is the most vivid possible symbol of ruling class corruption" and "the problem of what to do with former PMs has now reached crisis levels".

Kupar argues, "Being PM has become a CV-burnishing temp role, a trampoline to seriously paid gigs. Each new entrant into Downing Street is effectively handed a multimillion-pound cheque they can start cashing the day they are kicked out."

It's therefore becoming important to treat this "revolving door" situation more seriously. Along with politicians leaving power to earn more money as lobbyists, the business-speaking gigs can also be seen as part of the new ecosystem in which the corporate and political worlds are increasingly joined up.

It's unclear to what extent a "restraint on trade" clause could be imposed on New Zealand politicians wanting to profit from their new found political celebrity status. The Cabinet Manual could easily give some instruction on this, but it wouldn't be binding.

Perhaps we need to start treating our former politicians like national assets – encouraging them to be part of ongoing public conversations and debates. Helen Clark is probably the best example of this – but of course, it's not always welcomed, especially by her own political party. Likewise, with Key. It doesn't mean that such former PMs have to be given government appointments – but just welcomed more into the debates, at least on a not-for-profit basis.

In the UK, Kupar argues that former PMs should be constrained in their profit-making activities:

"Ex-PMs should be made to wait perhaps a decade before they can do consulting work for companies – bearing in mind that 'consulting' is often a euphemism for lobbying, or for identifying the right people to lobby in government. Each new PM would have to sign a legally binding contract accepting these terms. If that deterred grasping people from seeking the premiership, then fine. These free measures would instantly attract a better class of person to the job, reduce corruption, deflate populism, keep experience inside government, and do PMs a favour by preserving their reputations from their own greed."

Maybe Ardern will have to start thinking about her reputation, which could be severely damaged if she is associated with leveraging her celebrity and public office experience for personal profit. She might think that doing some charity work and celebrity appearances on the side for "good causes" might offset the profiteering, but that won't wash.

Perhaps it's time for Helen Clark to have a word with her protégé and remind Ardern about the merits of public service over exorbitant profits. She could even follow Clark's footsteps and set up "the Jacinda Ardern Foundation". However, if that just became another business vehicle for making money from speeches and consulting to the wealthy and powerful, then it'd really just be "business as usual".

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Kelly Dennett (The Post): Dame Jacinda Ardern a hit on the six-figure global speaking circuit (paywalled)

Simon Kuper (The Guardian): The big idea: why we need to stop former prime ministers cashing in

Jonathan Milne, Audrey Malone and Craig Hoyle (Stuff): Life after politics: Former PMs advise Bill English on what to do – and what not to do

Stewart Sowman-Lund (Spinoff): No, Jacinda Ardern isn't joining the paid speaker circuit

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People still want to know why the new Government has changed laws around tobacco and smoking. In particular, the big question is about what has motivated the changes. Do government ministers genuinely believe that the previous rules were wrong, or are they just pandering to “Big Tobacco”?

On the one hand, Associate Health Minister Casey Costello and the Government say that her reforms are based on evidence and long-held policy stances – especially of her own party, NZ First. On the other hand, there’s a strong belief amongst critics that various tobacco and nicotine reforms have been undertaken to help the tobacco industry and its corporate lobbyists. Neither side has been entirely successful in winning the argument yet. And this week, the debate resurfaced.

Costello faces her critics on links to Big Tobacco

Public health experts have come to refer to the Associate Minister of Health as the “Cancer Minister”. Their hostility towards the Minister is possibly greater than any other sector group opposing the current government. And that’s saying a lot.

Yet Costello agreed to answer these critics in a forum in Wellington on Tuesday organised by Health Coalition Aotearoa. As the Listener’s Greg Dixon says, the Minister couldn’t be accused of hiding from her critics: “Whatever else Associate Health Minister Casey Costello is lacking… it is not courage. The controversial MP’s decision to front angry public health experts at a forum organised by Health Coalition Aotearoa this week was pretty ballsy.”

RNZ reported on the meeting, saying that Costello “met a fiery reception from angry doctors” and faced heckling from the audience as she spoke. The chair of Health Coalition Aotearoa, Boyd Swinburn, said, “I haven’t seen the tension between the public health sector and the Government so high.”

He also questioned Costello about where her evidence informing tobacco reforms had come from, asserting that “This is really the tobacco industry pulling the strings of tobacco law in this country”. Similarly, Auckland University’s population health expert Chris Bullen claimed that “the tobacco industry is being called on for advice” from the Government.

According to the reporting of the Herald’s Adam Pearse, “Costello frowned and shook her head” to such allegations. She responded, saying “There has been no association with the tobacco industry, and that has not been where I have gone to for advice”. She blamed “media noise” for such “misconceptions” about her links to tobacco companies.

Pearce also reported that “one of Costello’s staffers in the crowd told moderator and HCA co-chairman Boyd Swinburn that Cabinet decided Government policy, not individual parties.” And after the meeting, she told Pearce that she “had a dim view of their inquiries regarding her links to the tobacco industry”, saying: “I think that was very unhelpful to their objectives.”

Costello was upfront to the health audience that she was out of sync with them on repealing the last government’s smokefree generation policy, but she argued that she had the same goal as them – about reducing smoking in New Zealand: “I appreciate that our pathway forward has not been consistent with the direction you wanted to take but I can assure you our goal is common and our determination is equal.”

Part of her argument is that putting prohibitions on tobacco or forcing the price of cigarettes up can have the unintended consequence of creating a black market, which is even worse. In this regard, Felix Desmarais of 1News reported that Costello claimed that living in South Auckland had given her “a pretty good idea about the illicit tobacco market”, and she “could take you to the shops that provide illicit tobacco”.

However, Costello couldn’t name any such stores and admitted that although she had told officials about them, she hadn’t reported them to the police. She explained: “I went back and it wasn’t there anymore so that was from a constituent who told me it was there but I went back and it wasn’t there anymore.”

Commenting on this, the Listener’s Greg Dixon says: “It turned out she had not reported the shop to police — weird for an ex-cop, wouldn’t you say? — and was unable to name the shop, which had, somewhat conveniently, now disappeared.”

The Role of the “Mystery Dossier”

Journalists and academic researchers have attempted to find evidence that the Government’s reforms have been motivated by some connection with the tobacco companies. And there are plenty of such connections to point to – such as the fact that two former NZ First senior staffers (David Broome and Apirana Dawson) now work as lobbyists for the Philip Morris tobacco company, one of which is still extremely close to NZ First politicians.

Yet the real “smoking gun” for critics was the discovery of a “mystery document” that Costello passed onto her Health officials to guide them in coming up with the new smoking reforms. This was leaked to RNZ journalist Guyon Espiner earlier in the year. This document was a compilation of various papers and arguments in favour of the liberalisation of the rules.

According to critics, the dossier was researched, written, and compiled by tobacco lobbyists. It certainly put forward all the tobacco industry’s policy proposals, such as lower tax rates for tobacco products and a repeal of Labour’s smoke-free generation legislation. It also repeated several tobacco lobbyist talking points, such as Labour’s smoke-free policies being “nanny state nonsense” and the argument that “nicotine is as harmful as caffeine”.

The leak of the document led Espiner, as well as Otago University health researcher Janet Hoek, to make an Official Information Act request for the document. Costello initially denied the document existed at all. She then refused to release it, erroneously citing a clause in the OIA protecting confidential advice tendered by ministers and officials. Eventually, she was forced to provide the document (albeit heavily redacted).

More interestingly, Costello has refused to name who wrote or compiled the dossier. She says it arrived on her desk on 6 December last year, and her staff have all denied that they had anything to do with placing it there or knowing who was involved. Costello later told the Chief Ombudsman that “the likely source was a political party staffer or volunteer”.

Despite not knowing who wrote the document or how it had come to be in her office, the Minister then forwarded copies to Ministry of Health officials to help steer their guidance in the policy process. From then on, the document became an official part of the decision-making process.

Costello had also told the Chief Ombudsman, who has been investigating the mystery document, that “she believed the notes were created by copying and pasting from a variety of sources over a significant period of time before the coalition government was formed”. But this week, RNZ’s Guyon Espiner says this is incorrect, as his un-redacted version “contains excerpts from the coalition agreement – so the document was clearly finished after the government was formed.”

Costello reprimanded by the Chief Ombudsman (again)

The mystery dossier has caused Costello continued anguish. In July, she was forced to release it by Chief Ombudsman Peter Boshier, who had been brought in to mediate the issue. He strongly reprimanded the Minister for trying to keep the document secret and said her actions in withholding the information were “unreasonable and contrary to law”.

Boshier then carried out an investigation, which he released this week, stating he is “concerned the associate minister was unable to produce any records about the provenance of the notes” and has “taken the rare step of notifying the chief archivist about the record keeping issues in this case”. It is not yet clear what the notification of the chief archivist will mean in practice. Under the Public Records Act, they are officially tasked with ensuring that governments carry out their legal duties in record keeping. In theory, the chief archivist can investigate to determine if Costello has breached the Public Records Act, which means that penalties can be imposed on the Minister.

Regardless, Costello has been told to fix up her record-keeping “failures” and “deficiencies”. She also has to answer why she redacted so much of the dossier when she released it under the OIA. This is because she now claims that “the likely source was a political party staffer or volunteer”, and yet, in redacting the document, she cites a clause of the OIA that protects the “confidentiality of advice tendered by ministers of the Crown and officials” – which is clearly not the case.

Costello’s pro-vaping policies

In addressing the Health Coalition Aotearoa conference, Casey Costello declared that she was anti-smoking but “not necessarily anti-nicotine”. From her point of view, vaping is a very valuable tool for helping people cease smoking. Critics say, however, that vaping has just become another nicotine product for the tobacco industry to profit from, and that New Zealand requires much more stringent regulation of the sector.

Costello is currently changing the rules on vaping, having recently introduced the Smokefree Environments and Regulated Products Amendment Bill 2024, which is being considered in a parliamentary select committee. It’s stated goal is to crack down on youth vaping. According to a report in the Post this week, the bill “includes a ban on disposable vapes, increased fines for selling to under 18s, visibility restrictions on retailers and a requirement for new retailers to be at least 100m away from early childhood centres.”

However, critics such as Vape Free Kids New Zealand argue that the bill will do little, because it fails to properly regulate all the specialist vape shops, which are popping up everywhere, but especially in low socio-economic areas. The industry is highly-lucrative – the most recent sales report, from 2022, showed retail profits were about $29 million a year. But there’s been an explosion of stores – now at about 7000 through the country.

According to the Asthma and Respiratory Foundation, there needs to be a cap placed on the number of stores allowed. Their chief executive Letitia Harding told the Post that vaping had become a “massive problem with youth” who were never smokers. She explained: “It wasn’t cool to be smoking and unfortunately vaping filled that hole and obviously had a huge uptake among our kids. So that whole harm reduction argument we don’t really buy at all here”.

Journalist Mike Yardley is one of the long-time smokers who has shifted over to vaping, and is still using the products 15 years later. He wrote this week that there is a huge problem with the way vaping is marketed to youth:

“even though vaping has become habitual for me, I have a huge problem with its glamorised hold on young people who have never smoked in their lives. Its principal purpose as a smoking cessation product has been perverted. For quite some years, I have been convinced that the insidious bright lights and flashy store displays of vape stores should be confronted head-on. The obvious solution is the nuclear option - disestablish the free and easy retail settings and restrict vapes as a pharmacy-only product. Frankly, it’s a less punitive option than making vapes prescription-only, which has also been floated.”

The pharmacy-only rule has just been introduced in Australia – along with other stringent rules – such as outlawing “lollified flavours”. Yardley says this is the way that New Zealand should also be going, but instead he says that Costello’s bill is “Weak as water… a half-hearted, mealy-mouthed sop.” He explains that the Minister “is simply tinkering. Her legislation is a classic case of being seen to be doing something, when the impact will inevitably be negligible.”

The need for transparency

New Zealand has clearly lost its world-leading approach to dealing with tobacco and nicotine. And although the numbers smoking cigarettes is declining, it’s not clear that its now declining as fast as it should be. There are other setbacks. For example, although the supermarket giant Woolworths committed last year to cease retailing cigarettes from 1 July 2024, this hasn’t occurred. The supermarket has explained the U-turn with reference to the Government’s dropping of stricter smoking laws.

In examining all of the facts involved in the tobacco sector, it’s hard to escape the conclusion that the new Government is simply following the dictates of the companies, and that the new Minister is part of this. Boyd Swinburn has said in this regard: “There are a number of really close dots between her and her party and Philip Morris, so it doesn’t take a lot of imagination to see how the documents and the policies of the tobacco industry have flowed through”.

Yet, there’s still no absolute “smoking gun” to prove any of this. Of course, this is how corporate influence works – it’s carried out behind the scenes, with an attempt to avoid any publicity. And in New Zealand there are very few regulations to ensure that the public can find out about what influences government decision-making. Therefore, we shouldn’t be surprised that no smoking gun has yet emerged to prove definitively that the government changes related to the influence of tobacco lobbyists.

The public therefore needs to demand more transparency on all such reforms. RNZ’s Alexia Russell said this week: “In making changes that line up with tobacco industry lobbying, Associate Health Minister Casey Costello ought to be transparent. But she’s not.”

She interviewed Guyon Espiner on this, and he said: “when you lay out the facts... they are the facts… Which is part of the reason that it’s been driving me to keep on turning the stones on this”. But he also stated that because of this, Costello will no longer agree to an interview” with him.

Of course, that’s the Minister's right. And it’s also the right of her government to make any changes that they see fit to the regulation of tobacco and nicotine products. But in the end, if they’re not willing to be transparent – especially when it looks like they are following the dictates of industry – then the public would be quite wise not to believe any such claims of integrity.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Felix Desmarais (1News): Govt anti-smoking but ‘not necessarily anti-nicotine’ – associate minister

Greg Dixon (Listener): The ghostly new strategy for road repairs (paywalled)

Guyon Espiner (RNZ): Chief Ombudsman criticises Costello over withholding tobacco documents

Laura Frykberg (Post): New anti-vaping bill won’t stop speciality retailers that ‘pop up’ in cities like Wellington, advocates say (paywalled)

Krystal Gibbens (RNZ): Casey Costello under fire on links to tobacco industry, says govt still committed to Smokefree 2025

John Lewis (ODT): Costello’s department criticised for ‘failures’ (paywalled)

Glenn McConnell (Stuff): Doctors claim NZ First links to big tobacco during heated meeting with Minister

Adam Pearse (Herald): Health experts grill Casey Costello, throw doubt on Smokefree 2025 being achieved

Alexia Russell (RNZ): The lobbyists, the Minister, and the mystery document

Rob Stock (Post): Woolworths U-turns on plan to stop selling cigarettes (paywalled)

Janet Wilson (Post): Shining a light on smokefree policy reveals troubling behaviour (paywalled)

Mike Yardley (Press/Post): Bill does nothing about vaping’s hold on youngsters who have never smoked (paywalled)

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The Green Party has officially changed its name, adding te reo alongside the English words so that they can now be called “The Greens Te Pāti Kākāriki”. The use of the term “kākāriki”, or “green”, might also be adopted by the party’s only city Mayor, Tory Whanau of Wellington.

This isn’t only because Whanau sells herself as an environmentalist, but also as “green” also means “inexperienced”, “naïve” or “lacking knowledge”. That’s what Mayor Whanau is being associated with at the moment in Wellington, after two years of poor leadership, and then giving four media interviews in the last week that have been highly embarrassing.

Whanau’s claims of financial hardship

Whanau’s most embarrassing gaffes of the last week have revolved around her attempt to position herself as personally suffering from the economic downturn that her constituents are facing. When asked by broadcaster Nick Mills on Newstalk ZB about the cost of living in Wellington, the Mayor replied to suggest that she felt the same pain as those who are currently struggling in her city: “I’ve just sold my car recently to kind of help pay the bills. I walk to work again. My mortgage rates have doubled in the last two years, so I’m feeling the pinch as well”.

This reply has been met with incredulity. This is because Whanau is currently paid nearly $190,000 a year and won a Lotto prize of $1.4 million in the past. Commentators pointed out that she also recently received a four per cent pay increase.

Several observers have suggested that Whanau’s claims show how out of touch she is with the realities of her constituents, or even worse, that her financial complaints come across as narcissistic. The Post’s Tom Hunt commented that Whanau’s salary “is well over twice the average public servant wage of $84,000. It can’t have gone down well with public servants recently made redundant or facing the chop, or those struggling to feed their families after an average 18.5% rates hike around the city.”

However, the explanation that commentators missed is that Tory Whanau had taken a pay cut to be mayor after working as a corporate lobbyist. When she ran for office in 2022, she worked for the corporate lobbying firm Capital Government Relations, which was run by Neale Jones and Ben Thomas.

While Whanau was there, the highly-successful lobbyists had been leveraging their former roles in the Beehive for lucrative contracts with property developers, supermarket giants, and big technology firms like Google. Shifting from this to a politician’s salary of “only” $190,000 was probably a source of complaint for the green mayor. As one satirist posted on X, Whanau’s WCC salary “is probably chump change compared to the cash filled envelopes she was receiving on a regular basis from corporate reps.”

Whanau also explained this week that she shifted from lobbying to the mayoral job, expecting it to be easier. She told a podcast: “I kinda thought that mayors flew under the radar a lot more which is why I kinda went for council in the first place… The public interest side, the news side of things has completely blindsided me, I didn’t expect that. That’s been a huge learning curve”.

Car crash interviews

The fourth interview that Whanau has given in the last week was with Jack Tame on TVNZ’s Q+A. Tame challenged the Mayor about her claims of having to sell her car to pay her bills, and she clarified that this by saying: “No, I actually didn’t”. She also claimed that it involved miscommunication: “It was an hour-long interview. You get a bit relaxed”.

However, after the interview Tame read out a statement from Whanau’s office to re-correct what she had said. The statement said: “The mayor sold her car to help with her mortgage, where her weekly repayments had doubled. It also made sense to sell as it was no longer needed because she had moved into a townhouse near the city centre.”

Whanau also complained in the interview with Tame that her statement about her needing to sell her car to pay her bills was “taken out of context”. But the original interviewer, Nick Mills, disagrees: “To say that those comments were taken out of context is rubbish. She said it. The comments are clear as day. She was struggling and she sold the car. What can be taken out of context from that?”

Mills labelled Whanau’s Q+A interview a “train wreck” and said it reinforced his existing view that “I don’t think she’s up to the job. And I don’t think she’s getting the right advice from people around her.”

So, who are the people around her giving her advice? Whanau gave another interview for a podcast, talking about the bad publicity that she’s been getting: “Every now and again I check in with all my mates. A lot of my friends worked for Dame Jacinda Ardern. They were in her office – Chief of Staff, Chief Press Sec, and all of them. And I just will go: ‘Is this normal? Is this level of negativity normal?’ And they are, like “Yeah, unfortunately”. When you are a progressive politician, especially a woman, especially a Māori, you just have to kinda unfortunately get used to this level.”

Whanau’s greenness laid clear

The journalist that has probably followed Tory Whanau’s political career more than anyone is The Post newspaper’s Tom Hunt. He said yesterday that her recent interviews have been “a car wreck, train crash and a catastrophe all folded into one.”

He points out that there were lots of other blunders in her Q+A interview, apart from the car selling claim: “Claiming rates would reduce despite the council forecasting them to increase hugely, and claiming a vote to end the council’s sale of its airport shares would likely succeed, then saying it would probably fail.”

Hunt has also questioned her political strategy and communications skills, saying that Whanau should not have kept the car-selling story alive: “what should have been a silly aside from a week earlier was given fresh legs. It makes you wonder what sort of advice she was getting because to backtrack once was strange, but to backtrack again just seems like chaos. And all for a story that really didn’t matter until it became more about integrity than transport.”

Whanau promised to be a unity mayor

In her Q+A interview, Whanau was particularly combative about her council colleagues, accusing other councillors of displaying “dysfunctional behaviour” and not putting the public’s interest first. She lashed out at her colleagues, saying: “I’d just encourage the public – don’t let that sort of political riff-raff take over the good work that the council is doing”.

On this use of “riff-raff”, the Post’s Tom Hunt has also suggested that Whanau has badly mis-stepped: “The Collins Dictionary lists synonyms as rabble, undesirables, scum, and hoi-polloi. Even if she was not talking about specifics, it was a terrible term to use for a mayor elected on a platform of unity.”

Although it’s clear that Whanau’s ability to lead her council or to build bridges has been incredibly poor, what has been even more problematic is her policy agenda. This has revolved around some very conservative or rightwing proposals and projects: trying to negotiate a corporate welfare deal for the multinational Reading Cinemas, trying to bring in water meters for households, being unwilling to pause the restoration of the Town Hall that had blown out in costs to $330 million, and now trying to sell the council’s shares in Wellington Airport.

What is Whanau’s future?

Under her mayoralty, Whanau now says that more austerity and cuts to basic services might be coming. The Herald’s Azaria Howell reported this week that the Mayor admitted that “cuts in other areas such as social housing and water infrastructure” could be coming, especially if she doesn’t get her way on selling the Council’s airport shares.

None of this is good for Whanau’s chances of re-election. But could the Greens replace their kākāriki mayoral candidate next year? The Spinoff’s Wellington reporter, Joel MacManus, has penned a column suggesting that the Green Party needs to learn the same lesson that the US Democrats faced with President Joe Biden. Like the President, MacManus says Whanau has a “history of saying weird stuff and making unforced errors”, and so she probably needs to be retired.

MacManus also says that although Whanau “has terrible political instincts”, much of the criticism of her is “because she is a woman of colour”. It’s also true that much is made of Whanau’s title as a “wahine toa” – and she herself embraces that identity.

In an interview last month she said that she strongly feels the weight of her duty to pave the way for more Māori women to come into local government leadership roles, worrying that “If we don’t keep fighting for our place and fighting for representation, it’ll just get worse and worse over time”.

Whanau also says that she has paid a high price – especially by incurring bouts of depression – in order to help other wahine toa get to the top: “that’s just the price you have to pay for now, to ensure that we’re opening the spaces for other people”. In that interview, she explained that “local and central governments are incredibly colonised structures, set up to suit Pākehā” and that “It’s actually up to leaders like myself to create a better pathway for those behind us.”

That might all be true. Yet many Wellingtonians will identify her arguments as typically superficial-but-fashionable, capital-city managerial speak. In this sense, Whanau has been a genuine representative of the “professional managerial class” of senior public servants and consultants from the likes of Deloitte, PwC, KPMG and EY.

This has been Whanau real problem – she has been very disconnected from ordinary Wellingtonians, and has failed to comprehend the types of policies that they want to see from local government. Her elitist disconnect, is therefore perfectly encapsulated in her recent attempts to spin her financial hardship complaints.

In one of her interviews this last week she claimed to be the victim of “the privileged trying to stop progress”. But posing like this, is only likely to invite more disdain, especially from Wellingtonians that are truly suffering a financial plight at the moment.

In all of her campaigning and self-defence, Whanau always plays down her background as a top Beehive Chief of Staff and a lobbyist for one of the most powerful corporate government relations firms around. Yet when it comes to political leadership, her corporate lobbying skills are very much to the fore, and have clearly influenced her political direction as mayor – especially in her pursuit of corporate welfare deals and privatisation.

Perhaps if the Green Party wants to endorse a different kākāriki mayoral candidate next year, they should go for someone who isn’t from the lobbying Wellington beltway and instead choose someone with a better sense of what ordinary people want from local government.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Mary Afemata (Stuff): ‘I wasn’t keeping myself safe’: How Tory Whanau regained her purpose

Herald: Editorial: Wellington Mayor Tory Whanau’s remarkable financial admission fails to relate (paywalled)

Azaria Howell (Herald): Wellington Mayor Tory Whanau’s TV interview labelled terrible and confusing by councillors

Tom Hunt (The Post): The car crash interviews Tory Whanau should have shut down (paywalled)

Joel MacManus (Spinoff): Tory Whanau keeps making unforced errors

Nick Mills (Herald): Tory Whanau’s train wreck interview is a moment we’ll all remember

Sam Smith (Stuff): Wellington mayor Tory Whanau regrets ‘mistake’ of car sale comments

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It was surely one of Christopher Luxon’s biggest mistakes since becoming Prime Minister – appointing a former gun lobbyist to be in charge of gun control. Act MP Nicole McKee continues to bring Luxon’s government into disrepute over her conflicts of interest on guns and questionable decision-making processes.

The accumulating concerns about McKee’s suitability for the role of Associate Justice Minister (responsible for firearms) are making it untenable for him to keep her in the role. If Luxon doesn’t act soon, then his government is likely to be severely tarnished on gun control issues.

Latest revelations about Nicole McKee’s relationship to the gun lobby

On Sunday, the New Zealand Herald’s Derek Cheng published an article titled “In the pocket of the gun lobby? Firearms Minister’s messages revealed”. In this, he detailed a number of communications sent between Nicole McKee’s Beehive office and the Council of Licenced Firearms Owners (Colfo), a gun lobby group. The messages reveal a lot of coordination and information sharing between the gun group and McKee’s ministerial office.

The article leaves the impression that the Minister remains exceptionally close to the gun lobby groups that she was part of before going into politics. This raises the question of whether there is a conflict of interest in McKee’s role in carrying out gun reform. Her critics, such as Police Association President Chris Cahill, suggest that she does not have the impartiality necessary for the public to trust in her decisions. He says: “She’s at the beck and call of Colfo. They’re still very, very closely linked, and have the same agenda.”

McKee used to be Colfo's spokesperson. And in her role as an advisor on gun control to the last National Government, she was infamously influential on Police Minister Paula Bennett, who decided not to close the loophole that the terrorist Brenton Tarrant then exploited to get access to military-style semi-automatic firearms (MSSAs) that the used to kill on 15 March 2019.

McKee then became an Act MP and Minister, but remains an active gun user and a member of the gun group NZ Deer Association (NZDA), and this membership also automatically makes her a member of the lobby group Colfo.

The McKee office communications and coordination with Colfo

In addition to having regular meetings with the Council of Licenced Firearms Owners (Colfo), McKee has staff members who communicate and coordinate activities with the lobby group. Derek Cheng details this relationship – he reports on dozens of text messages between a McKee staffer in the Beehive and the Colfo spokesperson, Hugh Devereux-Mack, who is also employed by another gun group, the NZ Deer Association (NZDA).

Summing up the texts, Cheng says: “They show co-ordinating over material to be published, confirming Colfo to receive ministerial releases in advance, and sharing information over what was found in Auckland’ raids’.”

The discussions about gun policy in these text messages are one thing, but the liaising over strategy and media coordination is especially revealing. For example, in one case, the gun lobbyist Devereux-Mack checks with McKee’s office before making a social media post about gun reform. The McKee staffer then encourages different wording to be used, and when the lobbyist agrees to that, the staffer says: “Much much better thanks. Boss is happy now.”

In another example, McKee’s office requests that Colfo provides some events that the Minister can attend, explaining: “Keen to get her out and about and the calendar is looking light.”

The close, two-way relationship has provoked McKee’s critics to question whether she can continue in her gun control role. Derek Cheng reports Gun Control NZ’s spokesperson Philippa Yasbek saying the various text messages show McKee is “still operating as a gun lobbyist”.

A conflict of interest?

Does McKee’s gun lobbyist background and continued close relationship with gun associations make her ministerial role problematic? Her defenders are quoted in Derek Cheng’s Herald article suggesting that McKee’s situation isn’t unique and that she is being unfairly “demonised”.

For example, Colfo’s Hugh Devereux-Mack argues that McKee’s lobbying background is helpful for the Government decision-making: “Having ministers with experience in their portfolios is an asset for the country as they are aware of the impact on the community legislation has, and help create practical, achievable and effective legislation.” And Cheng reports that Devereux-Mack believes other ministers are in the same position: “He noted Police Minister Mark Mitchell is a former police officer, Hunting and Fishing Minister Todd McClay is a hunter, and Health Minister Shane Reti is a doctor.”

Of course, the examples are not actually parallels. Those other ministers were simply employees or practitioners. They weren’t lobbyists for those sectors. McKee has essentially gone through the lobbying “revolving door” to a position of regulating firearms. And she can be expected to go back to lobbying after being in politics. What’s more, Mckee’s unique problem is that she appears to give special access to her former lobby group, which is not something that those other ministers are accused of.

The Minister also owns a firearms safety business, Firearms Safety Specialists. According to Cheng’s article, the consultancy is not currently trading, which means McKee hasn’t registered her business as a conflict of interest with the Cabinet Office. Yet, presumably the future prospects of her firearms business will be heavily impacted by the firearms decisions that McKee makes.

Will the Government re-introduce military-style semi-automatics?

Nicole McKee campaigned last year for the public to have greater access to military-style semi-automatic firearms (MSSAs), with her Act Party adopting this as their official policy. These were the lethal guns that were banned after the Christchurch mosque shootings.

This raises the question of whether, as the Minister responsible for gun control, McKee will liberalise the rules around MSSAs. Both McKee and Prime Minister Luxon have been challenged on this question, and they both essentially refuse to answer.

For McKee, the simple way to avoid answering the question is to assert that MSSAs have never been banned, pointing out that some gun owners such as pest eradicators, are still allowed to use such weapons. She disingenuously says “you can’t reintroduce something that never left”. She accuses the Labour Party of lying and fearmongering over the issue.

Such sophistry aside, there’s a genuine chance that the Government will loosen the rules about access to MSSAs as part of the coalition agreement between National and Act in which the Arms Act 1983 is to be rewritten before the next election. And both McKee and Luxon say that those discussions over MSSAs are still to happen.

When directly questioned on whether she would rule out liberalising access to MSSAs, McKee has told RNZ: “What I do commit to is making sure that we listen to all stakeholders and the community when we go through a process”.

Luxon has also given some indication that a Cabinet discussion on liberalising MSSAs is on its way. The Prime Minister was asked in Question Time recently by Labour leader Chris Hipkins whether the Cabinet would allow McKee to “increase access to semi-automatic weapons”. And the PM replied “Cabinet has not had the discussion about access to semi-automatic weapons. When it does, it’ll come back and be discussed fully.” Discussing this, RNZ’s Phil Smith says that Luxon appears to have acknowledged “that Cabinet will indeed discuss the possible opening up of who can have and use semi-automatic weapons.”

Will the firearms register survive under the new government?

Act has consistently opposed the firearms registry established after the March 15 atrocity. And last year, Nicole McKee campaigned strongly for scrapping it entirely. Now that she’s in charge of the registry, she is undertaking a review of it.

No one from the Government will commit to keeping the register. Last week, Stuff’s Tova O’Brien reported Prime Minister Luxon saying “we are reviewing the firearms register, there’s no decision that we’re not going to have a firearms register.” Meanwhile, Police Minister Mark Mitchell says he backs the Police’s support for a register, saying “I’ve always advocated for a gun register. I’ve always said that I think a gun register is extremely important for public safety.”

Mitchell is also reported by O’Brien as pointing to the Government’s support of the Police’s request for a gang patch ban, saying “he would like to see that same unilateral support for the police extended to maintaining the firearms register and the ban on semi-automatics”.

How much public consultation will occur in gun reform?

Nicole McKee’s consultation with the public over gun reform has been somewhat uneven. Mostly, it’s been gun clubs that the Minister has been keen to get feedback from. Controversially, the Police Association has complained about being sidelined.

There’s a chance that many changes made in this portfolio will occur without extensive consultation, especially in the normal legislative sense, involving select committee scrutiny and public debate. This is because the Arms Act allows the Minister to change the definition of a prohibited firearm by “Order in Council” rather than going through Parliament to change legislation. The Order in Council procedure is meant to allow Cabinet to regulate new guns coming onto the market quickly. This means that the minister simply changes the definition of a prohibited firearm in the regulations.

Currently, the Minister in charge of this is the Minister of Police. But Act have convinced National to shift the responsibility from the Police portfolio to the Justice one. There’s some logic in the proposal, but the main concern of Act seems to be to get the decision-making further away from the Police, and under the control of McKee (rather than National’s Mark Mitchell).

RNZ’s Anneke Smith has reported what this change involves: “Cabinet has agreed this power should move from the police minister to the firearms minister, meaning McKee could suggest what guns, magazines and ammunition are prohibited. This legislation still needs final Cabinet sign-off before it goes to the House for its first reading.”

McKee has already used the Order in Council procedure to remove the regulations on gun clubs and shooting ranges, which she argued was too restrictive and burdensome. The changes were therefore made mainly in secret, without public consultation, with McKee arguing the changes were only minor technical alterations.

The Herald’s Derek Cheng, however, has reported earlier this month that the advice from Ministry of Justice officials was against the changes, as McKee’s arguments were based on “an untested assumption” and the changes “would undermine public safety”.

Also, reported on these official Ministry of Justice briefings 1News’ Thomas Mead has said that “officials raised the alarm about a change to the Arms Regulations in May, saying they were being processed under a ‘short time frame’.” He also reported Public law expert Professor Andrew Geddis saying “the public had been shut out of the process” and using the Order in Council method for changing the gun club regulations was “probably not the right way to make law”. Geddis said: “This allows the order in council process to become the Minister’s own personal way of making law.”

What happens if McKee stays in the firearms role?

Some commentators are asking why the Government appears to be under the sway of the gun lobby. For example, Stuff’s Tova O’Brien asked last week why Prime Minister Luxon continues to strongly the back the Police on some policy issues that they campaign on – such as banning gang patches – but doesn’t back the Police when it comes to firearms. The Police Association has been outspoken about Luxon's need to sack McKee.

Clearly some contradictions exist within Cabinet. It’s hard to imagine that Mark Mitchell is the only Cabinet Minister uneasy about the Police being sidelined on gun issues, and the public often being left out of consultation.

Those contradictions can only be papered over for so long. At the moment, the question of whether military-style semi-automatic guns are made more accessible can be fended away by ministers saying that this is a decision for the future. But that issue will soon need confronting.

Luxon currently looks weak in having to back up McKee as she continues to push forward on Act’s more libertarian agenda on gun control. But it’s hard for him to do otherwise – he appointed her to the role, knowing full well that she had been a staunch advocate and lobbyist for deregulating gun control. Therefore, he’s in something of a bind. He has to either “back her, or sack her”.

But it’s clear that McKee will carry on in her radical direction and will continue to work hand in glove with the gun lobby. Luxon will need to be willing to back this, which is eventually going to start tarnishing his administration more intensely – especially once high-powered “killing machines” are back on the agenda to be made more freely available. He might then finally be keener to sack McKee.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Derek Cheng (Herald): In the pocket of the gun lobby? Firearms Minister’s messages revealed (paywalled)

Derek Cheng (Herald): The official warnings over Minister Nicole McKee’s proposed changes to gun clubs and shooting ranges (paywalled)

Lianne Dalziel (Newsroom): Just say the words, Minister: Military. Style. Weapons. Will. Remain. Banned

Justin Hu (1News): Firearms Minister grilled on Govt’s reforms and her record

Thomas Mead (1News): Officials raise alarm after McKee makes rapid gun law change

Tova O’Brien (Stuff): PM struggles to explain why he backs the police on gangs, but not guns

Russell Palmer (RNZ): Gang, gun law changes ‘absolutely’ followed correct process - Luxon

Anneke Smith (RNZ): Firearms Minister Nicole McKee won’t rule out trying to bring back banned guns

Phil Smith (RNZ): The House: Analysing government answers on guns

Shane Te Pou (Herald): Firearms reform: Why the Government must shoot down Nicole McKee’s AR-15 agenda (paywalled)

Amelia Wade (The Post): Gun minister challenged on firearms company conflict of interest (paywalled)

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The Establishment in New Zealand is becoming deeply unpopular. A range of new survey data shows that public discontent with politicians, the media, business and NGOs continues to grow.

Discontent with democracy revealed in the NZ Election Study

At every New Zealand general election, a group of academics survey the public about their attitudes toward politicians. The results for last year’s 2023 New Zealand Election Study (NZES) were presented last week at Victoria University of Wellington by political scientist Mona Krewel at a symposium with Ashley Bloomfield, looking at “Trust in Institutions and Democracy in Aotearoa New Zealand”. The survey’s data reveals an increasing decline in public trust and respect for politicians and some concerning judgments about the integrity of the political process.

In 2023, the NZES survey asked a new question to get a sense of the extent to which New Zealanders think the political system is biased in favour of elites. People were asked whether they agreed with the statement: “Most politicians care only about the interests of the rich and powerful”. About 35% agreed with this, and about 37% disagreed. So, this suggests that about a third of the population believes that the “rich and powerful” dominate the political system, i.e. democracy isn’t working.

Similarly, respondents were asked whether they agreed with the statement: “Most politicians act in the best interests of all”. Again, over a third are discontented with democracy – about 36% disagreed that politicians act in favour of everyone’s interests. And only 29% agreed with the statement.

There have been a lot of scandals in recent years related to the integrity of parliamentarians. Therefore, it’s helpful that the NZES asked respondents: “How would you rate the standards of honesty and integrity of elected politicians in New Zealand today?”. On this, 31% rated NZ MPs as having “low” honesty and integrity, and only 27% rated the standards as “high”.

Similarly, respondents were asked whether they agreed with the statement: “Most politicians behave with great integrity”. About 42% agreed, and 36% disagreed.

The public’s trust in politicians appears to be declining, according to the NZES data. At each election, the survey asks to what extend respondents believe that “Most politicians are trustworthy”. Rated on a 1-5 scale where 5 means very trustworthy, in 2023 the average rating was only about 2.87/5. This rating has been dropping since 2017.

Commenting on these polling trends, Jacqui Van Der Kaay wrote an analysis column yesterday for the Democracy Project, arguing that “Politicians need to lift their game”. She has also written a chapter about the impact of integrity issues on the 2023 election, which is coming out in the forthcoming book, “Back on Track?” about the election campaign.

Van Der Kaay argues that although integrity issues dominated the election campaign last year, things appear to have worsened this year. She explores some of the ways more must be done to clamp down on integrity violations.

Trust in Politics and Media plummets in the latest Acumen Edelman Trust Barometer

Each year the Edelman PR company publishes a global survey about public trust in authorities. The New Zealand element of this survey is commissioned by local PR firm Acumen, and the results haven’t yet been formally published anywhere. However, the results are also reveal declining public trust, and therefore they deserve a wider audience.

This year, the trust results for the institutions of Government and the Media are particularly negative. In line with other survey results, it reveals that New Zealanders are quickly losing faith in politics and journalism.

The Acumen-Edelman survey asked respondents to indicate whether they trust the institution of Government to do what is right, and 48% said they did. This was down three percentage points on the results for 2023. And it compares to the global results of 51%.

The institution of the Media fares much worse. Only 36% trust the media to do what is right, and this has dropped five percentage points in just one year. And New Zealand’s results compare very unfavourable to the global results of 50% satisfaction for the media.

NGOs in New Zealand are more trusted – with 57% indicating trust. And the institution of Business does the best – with 60% trusting them (but lower than the global average of 63%).

According to the Edelman categorisation of trusted institutions, this means that Media (36%) and Government (48%) are “Distrusted” institutions in this country, NGOs fall into the “Neutral” category, and Business is the only “Trusted” institution.

The general public trust in these institutions has been fluctuated over time. And it’s worth noting that institutions like Government and the Media initially became more trusted after 2017, but have declined considerably over the last two years. Trust in Government has dropped nine percentage points from a height of 57% at the time of the 2022 Acumen Edelman Trust Barometer.

Survey respondents were also asked about their evaluations of the ethics and competency of the four main institutions. Again, Media and Government fared particularly poorly in the latest Trust Barometer. In terms of ethics, Government has gone from a +15 in the 2022 report to a -7 this year. Media has gone from -8 to -16 in this period. Meanwhile, NGOs and Business have only declined a small amount.

When it comes to an evaluation of competency, Government has gone from -15 to -26, and Media from -25 to -34. Meanwhile, NGOs and Business have seen increases in perceived competence.

The difference is public perception about the competency and ethics of Government and Business is troubling. In terms of ethics, the public gives Business a score that is 18 points higher than Government. For competency, the gulf is even more significant – 46 points higher.

The public’s trust in various professions is also tested in the Edelman survey. The profession of Teachers comes out on top – 77% have confidence in them. At the bottom of the rankings are Journalists – trusted by 36% of New Zealanders. This score has dropped two percentage points since last year, and it compares to a global average of 49%. Trust in the profession of “Government leaders” is also low, at 40%. This figure has dropped five percentage points in a year.

To what extent are public leaders involved in disinformation? According to the Edelman survey, the public regards politicians, businesspeople, and journalists to be deliberately engaged in trying to mislead with “false or gross exaggerations”. Survey respondents were asked whether these three groups in New Zealand “are purposely trying to mislead people by saying things they know are false or gross exaggerations”.

Journalists and reporters scored worst – 60% deemed them guilty (up four percentage points). Government leaders were next – 51%, followed closely by Business leaders on 50%.

A Democratic Deficit

The two surveys discussed above are only the latest in a long list of indicators that something is going wrong in New Zealand democracy. Plenty of other evidence indicates that a democratic deficit has been growing in recent years.

Some of this trend surely relates to the experience of Covid and some of the governing decisions of the last government. However, it would be mistaken to focus in any sort of partisan way on trying to understand the current democratic deficit. Many of these trends were occurring before the last government and seem to be still happening under the new one.

Ultimately, these trends should provoke an awareness that this is a deep-seated problem in our political system that isn’t about individual politicians or political parties. It’s much more systemic than that. And although the above evidence is based around perception, it goes hand in hand with plenty of other concerning trends in politics at the moment, such as reduced public engagement (especially in terms of voter turnout), increased political polarisation and declining social cohesion.

More debate and discussion are required about what is producing New Zealand’s “broken politics”, and perhaps even a “broken society”.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Acumen (2024) Acumen Edelman Trust Barometer 2024

Jacqui Van Der Kaay (Democracy Project): Politicians need to lift their game

Victoria University of Wellington: Trust in Institutions and Democracy symposium

Stephanie Worboys (Maxim Institute): Shaky Foundations: Why our democracy needs trust

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The charity Netsafe is increasingly regarded as New Zealand’s “internet police”, or at least the leading authority on everything related to regulation and the dangers of the internet. It’s a well-deserved reputation, but there are also questions about whether they are being tainted by their financial reliance on big tech companies.

The latest issue on the political influence of big technology companies is about whether funding from social media giant Facebook might have impacted on Netsafe’s surprising stance against tighter regulation of social media for young people.

The Debate over banning social media for young people

Australia is currently debating whether to ban social media companies from allowing under-16s from using their services. According to the Herald, “Prime Minister Anthony Albanese has supported calls to limit children’s access to social media and Opposition leader Peter Dutton has pledged to implement a ban on under-16s using the platforms.”

The worry has been sparked by a growing literature about the mental health risks caused by social media, especially for young people. This has been most famously espoused by American social psychologist Jonathan Haidt’s research, especially his new book, “The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness”. The rise of smartphones and online communications has led to a significant increase in mental health issues, body image problems and general status anxiety.

Here in New Zealand, political party leaders are giving some support to the idea of an age-ban being adopted in this country. Positive reactions have been made by Christopher Luxon, Chris Hipkins and David Seymour. The latter says that the ban is worth discussing, given the extent of the problem. In June he told Newshub: “I suspect that the rise in social media and smartphones everywhere has really changed young people’s brains, it’s increased the pressure on them. That’s something that as a society we are now working through”.

Yet, Netsafe has been entirely out of step with this mood, saying the idea is a “distraction” and a ban would just push any problems underground – kids would find other ways to use social media. The organisation wants a focus, instead, on improving young people’s digital literacy, helping them intelligently navigate, with critical thinking skills, the various online spaces.

Netsafe chief executive Brent Carey went on RNZ to explain their opposition to a ban: “We leave our young people at the age of 14 to babysit other people, or they can be left on their own by their parents, but we won’t be able to let them have Snapchat with their friends? It just doesn’t sort of ring true with how we treat young adults.”

Reacting to this, businesswoman Cecilia Robinson wrote last week in the Herald: “This analogy is deeply flawed. If we trust young teens to stay home alone, does that mean we should also allow them to gamble, drink alcohol or drive cars? These comparisons fall short when we account for the unique dangers posed by social media – platforms deliberately designed to be addictive and filled with harmful content that significantly impacts developing minds.”

Does Facebook fund Netsafe? And does this impact their advocacy?

The company that owns Facebook and Instagram, Meta, is one of Netsafe’s main funders. On its website Netsafe lists its financial supporters and partners, including Meta. Of course, it also has an array of other supporters, including government departments. The details of the financial support from Meta are not clear.

This financial relationship was highlighted yesterday by broadcaster Jesse Mulligan, who wrote a Substack post in which he asks: “Would you ask a health group part-funded by big tobacco whether we should ban cigarettes? An environmental group funded by Shell whether we should phase out oil?”

Mulligan says that the Meta money has not necessarily impacted on Netsafe’s stances, but he would like to see more transparency about it: “The most generous view is that Netsafe takes Meta’s money but keeps their opinions independent. If that is the case, we should still, I think, demand that the funding is disclosed (by the news organisation if not the interviewee) whenever Netsafe is expressing an opinion on social media.”

Of course, Netsafe might well be able to claim that the money from Meta is tiny, especially since most of its funding appears to come from the government. Mulligan responds to this, saying that having any funding from a big tech company is still likely to have an impact: “Does it matter exactly how much money Netsafe has received? I don’t think so. Even if it’s fifty dollars, there’s always the prospect of larger and ongoing amounts in the future. With government funding shrinking or disappearing everywhere, would you want to be the Netsafe CEO heading into your annual check-in with the Meta partnerships team, having just told New Zealand media you want their products banned?”

Cecilia Robinson also raises questions about such funding. In her Herald article, she says: “it’s essential to consider who is funding organisations that are involved in shaping these debates. When the media seek comments from ‘social media experts’ on the payroll of companies such as Meta, it raises questions about potential bias in their advocacy for lighter regulations, making it harder to trust their recommendations as being in the best interest of children’s safety.”

Lobbyists for big tech

Jesse Mulligan’s Substack post is titled “It’s not Watergate, but it’s a story”. This is because it includes his relaying of his Netsafe-Meta discussion in the weekend with fellow broadcaster and investigative journalist Guyon Espiner, who told Mulligan, “That’s a story… That’s definitely a story… I mean it’s not Watergate… But it’s a story.”

Espiner has made a name for himself as exposing the political influence of corporates, especially through the use of lobbyists. Last year he reported that Meta uses the corporate lobby firm Cosgrove & Partners, owned by former Labour Cabinet Minister Clayton Cosgrove

Espiner reported that in 2022 Cosgrove was able to contact his former colleague, Andrew Little, and get a meeting for Meta’s VP of public policy, Simon Milner, with the Cabinet Minister. Cosgrove just texted Little, saying that Milner “would love to meet with you” about disinformation and cyber security, to which the Minister replied “Thanks Clayton… Yes, I would be very keen”.

According to Espiner's research, the other lobbying company working for big tech companies is Capital Government Relations, run by Neale Jones and Ben Thomas. In 2022 they represented Google and Mega (Kim Dotcom’s old firm). Espiner reported that Jones was able to text an advisor in Jan Tinetti’s Beehive office: “Hey, just wondering on behalf of Google if there’s any indication when Minister Tinetti’s paper on the review of online content regulation (is going to Cabinet)?”. The adviser responded: “Going to Cabinet this month”, and Jones replied: “Cool thanks”.

The problems of NGOs being resourced by those they are meant to scrutinise

All charities need to raise money in order to operate. So it’s not surprising that Netsafe fundraises or takes money from companies in the sector in which it operates. Such partnership are increasingly common for NGOs. It is however quite a problem when those NGOs are meant to be watchdogs, applying scrutiny of those commercial firms.

But Netsafe isn’t the only one. Another useful case study is the New Zealand chapter of Transparency International, which is particularly enthusiastic about partnerships with other NGOs, corporates, and even the state. If you look on the anti-corruption watchdog’s website you will see that it gives thanks to the support of an array of big corporate players like Google, Deloitte, PwC, ANZ, Bell Gully, KPMG, and even the Employers and Manufacturers Association.

Perhaps even more concerning for a watchdog tasked with scrutinising and speaking up about public sector integrity issues, Transparency International NZ receives most of its funding from the following state institutions: the NZ Police, SFO, GCSB, MFAT, AG, DPMC, SIS, IRD, PSC, and MBIE. According to the NGO’s most recent annual report, of its annual income of $362,019, most comes from “Public Sector Support”: $310,000. Some argue, therefore, that the watchdog has become captured by its funders and is consequently highly-reluctant to criticise those that keep its operations going.

None of this means that either Transparency International or Netsafe are simply following the orders of their paymasters. For example, Netsafe’s arguments against a ban on social media for the under 16s has a lot of logic – and it’s essential to hear the other side of the debate on these significant issues. But what it does mean is that more scrutiny is needed about such charities. And, at the very least, all of these financial arrangements need to be much more transparent in the public debate.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Heather du Plessis-Allan (Newstalk ZB): Here’s a solution to handling kids and social media

Guyon Espiner (RNZ): How well-connected lobbyists ask for - and receive - urgent meetings, sensitive information and action on law changes for their corporate clients

Chris Keall (Herald): Should NZ follow Australia’s push to ban under-16s from social media? Netsafe’s surprising take (paywalled)

Jesse Mulligan: “It’s not Watergate, but it’s a story”

Cecilia Robinson (Herald): Netsafe’s social media stance out of touch, urged to address transparency on funding (paywalled)

RNZ: Banning kids from social media won’t solve anything – Netsafe

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You might not have noticed, but another report has been put out about the dangers of corruption in the New Zealand political system. Released precisely two weeks ago by Transparency International New Zealand, their research is merely the latest warning about rising corruption to be published and ignored.

The problem is that this report largely reflects the prevailing conservative and cautious orientation to corruption issues in New Zealand. It reiterates the central thesis of Transparency International – that this country is a low-corruption nation – while warning that this could change. You can see the report here: “The effectiveness of anti-corruption institutions in New Zealand in deterring, detecting and exposing corruption”

As is typical of these sorts of reports from within the Wellington beltway, it’s worthy and theoretically-grounded but doesn’t illustrate much – mainly because the author bends over backwards not to name or cite instances of corruption or scandal in New Zealand public life.

As with other similar reports into corruption and integrity deficits, there is no mention of National or Labour politicians going almost straight from the Beehive to lobbying, or the fact that four of the last five chiefs of staff for the Labour Government were lobbyists. Nor are incidents like National’s Saudi Sheep scandal discussed. There’s no mention of NZ First’s donation court case, etc. Or recent allegations about Te Pati Māori or even National MP David MacLeod being investigated by Police for failing to disclose $178,000 in donations. And wealthy individuals who have given donations, seeking influence, are not named.

The effect of this more abstract approach is to downplay the existence of the very real problems that exist and need to be highlighted. This approach also makes for a rather dull read that, unsurprisingly, gets largely ignored by the media, politicians and the public. Yet the report's substance is important, and buried in it are some valuable recommendations that deserve a larger audience.

NZ “deserves” its reputation for “low corruption” but could lose it

The Transparency International New Zealand (TINZ) report was launched in Wellington by the global head of the anti-corruption watchdog, François Valérian, who congratulated New Zealand on having a political system with “impeccable integrity”. He said that New Zealand’s low-corruption status was “a well-deserved reputation”. He didn’t say the country’s low-corruption status was without threat, but instead urged politicians to strengthen the integrity safeguards in the system to prevent corruption from becoming a problem

This is the basic orientation in the Wellington beltway towards the issue of transparency, corruption and integrity: to celebrate and champion the idea that New Zealand leads the world on its lack of grift, nepotism, patronage, or cronyism. After all, each year Transparency International publishes its Corruption Perception Index that places this country in one of the top-ranked places, which allows the government of the day to justify why it refuses to carry out integrity reforms that other nations have.

This approach has been a recipe for complacency. By continuously saying that “there’s nothing to see here, move on”, integrity watchdogs have done New Zealand a disservice, turning a blind eye to the need to implement reforms on things like money in politics and lobbying.

This latest TINZ report on corruption largely reiterates the idea that New Zealand has low corruption. It argues that New Zealand’s institutions are historically less corrupt than elsewhere, and that the country has a culture of good ethical behaviour.

Report recommendation: Beneficial ownership register

The TINZ report makes several recommendations for reform. It’s strongest case is for the government to introduce a beneficial ownership register that would be public. At the moment, businesspeople can easily hide and move around money between legal entities that have limited transparency – such as companies, trusts, and limited partnerships. It’s long been a concern of transparency campaigners that this allows corruption, money laundering, and tax-evasion to remain hidden, and that laws need to insist that the ultimate owners of all companies must be identified.

Unfortunately, the new coalition government has recently announced that such a register won’t be included in their upcoming legislation intended to modernise the Companies Act. The Minister of Commerce and Consumer Affairs, Andrew Bayly submitted a paper on this to Cabinet recently saying that such a register would “add a compliance burden to companies (albeit a small one). As such, it does not fit well with the overall scheme of the package”.

This will put New Zealand further out of line with comparable countries on transparency and anti-money laundering initiatives. As a result, some have suggested that New Zealand will face future restrictions on being able to shift money out of the country – essentially New Zealand’s financial systems will be blacklisted.

Report recommendation: Single anti-corruption agency

Transparency campaigners have long argued that New Zealand’s law enforcement on corruption and integrity issues is woeful, largely because the responsibilities for monitoring, coordinating, researching and operating the laws are spread over several different agencies. Often this leads to corruption problems failing between the cracks, and some of the agencies aren’t equipped to carry out their responsibilities.

In other countries this problem has been dealt with by the creation of a single lead agency, such as an Integrity Commission or Anti-Corruption Agency. The TINZ report also suggests that one of the existing agencies could take on these rules, and that a clear anti-corruption strategy needs to be adopted.

Report recommendation: Stronger regulation of money in politics and lobbying

Perhaps the weakest part of the TINZ report is where it deals with money in politics and lobbying. On these issues, the report is rather muted, almost playing down the current problems.

Nonetheless, the report’s recommendations on lobbying would be a step forward. It suggests that an online register be established for lobbyists, a stand-down period being instituted for politicians and senior officials before they are allowed to work as lobbyists.

The report also recommends a “code of conduct” for lobbyists – although the recent experience of these is that such codes become hollow cloaks that only provide cover for lobbyists to continue their unregulated business as usual.

The need for real research on corruption in New Zealand

In contrast to the rather dull and cautious approach of the New Zealand chapter of Transparency International, its British counterparts released a landmark report on Monday that strongly condemned an egregious misuse of public funds during Covid in that country – see: “Behind the masks: Corruption red flags in Covid-19 public procurement”

In this, Transparency International UK delved into the Conservative Government’s Covid-era contracts with private companies and discovered that a massive proportion of these fell well short of expected standards of procurement integrity – i.e. they looked corrupt, and the corruption watchdog pointed out which contracts merited proper investigation by authorities.

Here’s some of what the UK report found:

• Government Covid contracts worth more than £15bn (or nearly one in every three pounds spent on the pandemic) had been “red flagged” for corruption

• Contracts worth £4.1bn (or nearly one in every ten pounds spent on the pandemic) had been awarded to companies and individuals with known political connections to the Conservative party

• Contracts worth more than £30.7bn in total (almost two-thirds of Covid contract spending) were awarded without competition

• The Department of Health had to write off £14.9bn in public money during Covid

The new British Labour Government has now promised to appoint a “Covid corruption commissioner” to examine fraud in this area, and to try to “to get back the money that is owed to the British people.”

In contrast, here in New Zealand, Transparency International has been relatively silent on Covid-era fraud. And the various Covid inquiries launched by the last Labour Government and then the new National-led administration, appear to be doing their best to keep away from any such issues.

This is despite the $20bn Wage Subsidy Scheme being one of the most controversial and expensive Covid-era responses, which research has shown to have been used by profitable companies during the pandemic that didn’t need the payments. By some estimates, as much as $10bn was pocketed as “corporate welfare”.

Finally, the Australian Government established a National Anti-Corruption Commission just over a year ago, and on Wednesday it reported on its annual progress. The Commissioner says they’ve been particularly busy – receiving 3,189 referrals of suspected corruption in its first year of operation. And so far, it has launched 29 full investigations into corruption.

The Commission confirmed that as part of those investigations, “it was looking into allegations of corrupt conduct against the six current or former parliamentarians, along with a number of other senior officials.”

These investigations in Britain and Australia provide an idea of what New Zealand needs if it wants to take research into corruption seriously. While an academic report into the theories and abstract views on corruption have their place – but will largely be ignored – this country desperately needs some actual investigation into the more rotten parts of New Zealand public life.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Sarah Basford Canales (The Guardian): Federal corruption watchdog looking into allegations against at least six parliamentarians

Daniel Boffey (The Guardian): Tory Covid contracts worth £15bn had corruption ‘red flags’, study finds

Brent Edwards (NBR): Why New Zealand should worry about corruption (paywalled)

Jem Traylen (BusinessDesk): New Zealand’s ‘clean’ reputation makes it an attractive target for corruption, global expert warns (paywalled)

Transparency International New Zealand: “The effectiveness of anti-corruption institutions in New Zealand in deterring, detecting and exposing corruption”

Transparency International UK: “Behind the masks: Corruption red flags in Covid-19 public procurement”

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The policy question of the week in New Zealand politics is about tax reform. In particular, the perennial question has been raised about how the country can create a better tax system, especially one that is fairer or more progressive.

The issue has been kicked off by Labour leader Chris Hipkins, who has given numerous media interviews stating that the party is reconsidering its policies on tax and is considering the types of taxes he ruled out last year when he was prime minister – such as a wealth tax. Instantly, a debate has sprung up, but mostly, it’s been dominated by the opponents of change, who are successfully raising all the scare arguments against creating a more progressive tax system.

NZ’s backwardness on tax embedded by vested interests

Tax reform is frequently discussed in New Zealand – particularly by the political left – but it is rarely implemented in New Zealand, and usually by the political right. Attempts to make the tax system more progressive, to ameliorate economic inequality, never seem to get beyond the initial debates.

This means that we have a tax system that is much more rightwing and rich-friendly than in most countries. This is a point made well this week by former tax policy manager in the Treasury, Kathy Spencer, in her opinion piece titled “The tax debate that won’t die – why we finally need a capital gains tax”. She explains: “The Labour Party has been trying to broaden the taxation of capital gains since 1967. There have been multiple expert committees, and a range of proposals, but none has made it to the implementation stage.”

Spencer points out that New Zealand has become an outlier on progressive tax: “While we have procrastinated, other countries have long since moved ahead, making us an outlier in the OECD. Capital gains have been taxed in the UK since 1965, in Canada since 1972, and in Australia since 1985.”

Similarly, this week, tax experts from Victoria University of Wellington, Jonathan Barrett and Lisa Marriott, put out an article explaining various tax options, also drawing attention to how this country is falling behind the tax reforms of other similar countries: “Even the United Kingdom, where Conservative governments have held power for 32 years since 1979, has a more progressive income tax system than New Zealand, including a comprehensive CGT and an inheritance tax with a standard rate of 40%.”

This leads them to ask: “If taxes on wealth are an obvious policy choice for other OECD counties, why we don’t have them? And why has there been so little serious debate about moving away from our reliance on personal income tax and GST?”

The answer is: that vested interests have successfully blocked progressive reforms. The business community and the wealthy have been able to dominate the tax debate, leading to tax policy settings that suit them. Partly, this is just a matter of self-interest: those that changes to tax law might significantly disadvantage are those who have been highly motivated to participate in the debate and win it.

In contrast, those interested in a fairer or more progressive system have been less organised and effective. Partly, this is due to the unhealthy state of the political parties and organisations of the left in recent decades. From Labour to the Greens to the unions, there’s now much less emphasis on fighting economic inequality than there used to be. The priority has shifted towards non-economic issues. Hence, when the wealthy focus on implementing tax policies that suit them, the left often retreats into identity politics, foreign policy, or culture wars.

Individuals and institutions representing the wealthy seem much more organised and effective in progressing their interests. As Michael Cullen explained when his Tax Working Group espoused reform, those protecting the status quo were likely to put up a strong fight: “Any tax system creates large vested interests that will oppose change. Any change to a tax system is easily misrepresented as a tax grab, an ideological lurch, unfair, unworkable or all of these.”

Cullen was proven to be correct. His Tax Working Group handed Prime Minister Jacinda Ardern a recommendation to bring in a capital gains tax in 2018, and a public debate began. Strangely the Labour Government decided not to participate in any of the public debate, perhaps wary not to use up their political capital.

Other parties like the Greens or even the unions were hardly present either. The result was that the opponents of a capital gains tax had the public debate almost to themselves. And then Ardern famously concluded that debate by saying that the public had spoken and that she would never allow a capital gains tax. And, of course, her successor Chris Hipkins made a similar “captain’s call” about a year ago, saying there would be no wealth tax under his leadership.

The 2024 tax debate is once again being dominated by vested interests

Hipkins has now U-turned, putting tax reform back on the public agenda. And instantly there has been a rush to kill it off. First, this involved journalists and opinion leaders pooh-poohing it. The Sunday Star Times’ Andrea Vance was the most scathing, saying that Labour and Hipkins were making a big mistake in being “sucked back into the capital gains tax doom loop” that they would inevitably lose.

Vance lampooned the Labour leader for even raising the issue: “Hipkins has blown the dust from David Parker’s copy of Piketty and is breathing new life into Labour’s least popular and most divisive policy.” She suggested that Hipkins should have stayed true to his big call last year to rule out radical tax reform: “Hipkins’ instincts were correct. The party has struggled to defend capital gains or wealth taxes because for purely political reasons, they are indefensible.”

But haven’t various opinion polls showed that the public are actually favourable to capital gains and wealth taxes? Vance frames this as wrong: “The polls might show support for the broad idea of taxing excess profits and capital gains, but when you dig into detail on asset classes, like shares and property, that diminishes.”

The 2024 argument against progressive taxes is that the proceeds will be “squandered”

The opponents of tax reform in 2024 appear to be uniting around the argument that any new progressive tax would simply lead to governments wasting more money. In her column warning against Labour adopting such taxes, Andrea Vance suggests that the public will oppose them because of “the prevailing narrative that in government the party wasted and mismanaged vast amounts of public money.”

This line was also reiterated by Rich Lister Bruce Plested, who on Monday was reported by RNZ saying that tax reform would be opposed by the wealthy due to the proceeds being “squandered” by big-spending politicians. Plested, who is worth an estimated $1.3 billion, suggested that although he wasn’t opposed to a wealth tax, the problem was first having “a good enough government” for spending the money wisely.

The problems of the tax take being squandered has been taken up again today by the NZ Initiative, arguing against tax reform. The Initiative’s senior fellow Bryce Wilkinson has an opinion piece in the Herald saying that the last Labour Government’s big-spending is an integrity issue:

“The quality of government spending is extraordinarily low. Spending programmes commonly lack a clear over-riding objective. That accountability problem is aggravated by resistance to proper measurement of results in relation to intentions. This lack of transparency breeds waste and surely fosters corruption. The Auditor-General has repeatedly warned the public about these matters.”

Other strong messages against reform are coming from those representing the wealthy. For example, Robin Oliver from the tax consultancy firm OliverShaw, is also interviewed today in the Herald’s Frontpage series, saying that a wealth tax would be a “total disaster” and “would put us in the realm of Zimbabwe and Venezuela”.

Oliver also condemns the idea that the richest 2 per cent can be made to pay more tax: “That’s not realistic. It’s not credible. If you squeeze those people too much, they’ll just leave. That’s your highly skilled people. That’s your surgeons, that’s your doctors”. According to the Herald story, “Oliver fears a capital gains tax would undermine productivity and investment and he would prefer to see the tax take on GST increased.”

Notably, Oliver’s firm OliverShaw commissioned a report from Sapere Research Group, which claimed to show that the wealthy already pay their fair share of tax. This was published, strategically, just before the then Minister of Revenue David Parker was releasing landmark IRD research showing the extent to which the wealth of the ultra-rich had skyrocketed in recent years. This showed that the richest 311 families have a combined wealth of $85 billion, and own a quarter of the country’s assets. Oliver warned that such research could produce a “misleading and confusing picture of our tax system”.

Vested interests will continue to dominate the tax debate

When politicians and progressives are unwilling to participate in the debate on taxes, they simply hand over the ground to those with a greater interest in dominating the discourse. In what is effectively a tax debate void, the wealthy and those who represent them can win the debate by default, blocking any reform of taxation.

Last year, Economist Shamubeel Eaqub wrote about this, saying that well-meaning research and academic tax reports wouldn’t cut it against the onslaught from vested interests: “The very wealthy will inevitably mount a strong and co-ordinated opposition, using a wide array of organisations and people. They can afford to do it, and it would be a small cost relative to taxes they may have to pay.”

We see this happening again in 2024. Groups and politicians representing the interests of the wealthy are mobilising.

More attention needs to be paid to some of the groups that are lobbying over this behind the scenes, too. In this regard, BusinessDesk journalist Murray Jones wrote an excellent article last year about the “Corporate Taxpayers Group”, which entirely flies under the radar, but is essentially the new “Business Roundtable”, lobbying government on behalf of fifty big corporates.

Jones carried out research about the Corporate Taxpayers Group, and found that in 2022, for example, the group had held forty meetings with IRD to discuss tax policy, as well as talking to select committees and other policy-makers. Although the lobby group is very secretive, it has a huge corporate membership – Jones found that it included “Fonterra, Air New Zealand, SkyCity, Todd Corporation and the big four banks” and that “the group’s members turned over more than $77 billion annually in NZ, paid about $2.3b in income tax, and employed more than 100,000 New Zealanders.”

With this heft, the Corporate Taxpayers Group can get regular meetings with many important public servants. Jones got hold of their “Statement of Purpose”, which says the group focuses on “issues having relevance to Member enterprises” and to “provide a collective means for communicating with government ministers, finance and expenditure select committee, Inland Revenue, Treasury, Crown Law and other government bodies with regard to taxation matters affecting members”.

Murray Jones’ investigation into the Corporate Taxpayers Group shows examples of how influential the lobbyists have been on tax policy. The best example is during Covid, when the businesses helped the Government create schemes to assist the private sector: “Already close, the relationship between the IRD and large stakeholders reached a new level during the early stages of the covid-19 pandemic. In a dizzying six-week period, all hands were on deck to devise new policy to protect businesses from the incoming fallout.”

Time to call out the vested interests in the tax debate

The Labour Party and Chris Hipkins should be congratulated for raising tax reform again in 2024. But there’s a need to scrutinise the whole debate that is now occurring.

Some in Labour say that Hipkins is just raising the wealth and CGT ideas out of intra-party necessity – to satisfy the activists, and once polling has been done, and journalists briefed that tax reform is a bad idea, then he will be able to credibly say that he tried, but the results were negative.

Regardless of what Labour is doing, scepticism needs to be applied to those that are attempting to shutdown their debate on wealth, land, or capital gains taxes. Straight out of the gate, critics have already been attempting to scare the public off the idea of reform. But it’s time to label those critics of reform as simply vested interests defenders of a fiscal status quo that simply isn’t in the wider public interest.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

Jonathan Barrett and Lisa Marriott (The Conversation): Labour is talking about a wealth tax again – what are its options and what might work?

Dan Brunskill (Interest): Labour promises to tax capital

Thomas Coughlan (Herald): National teases Labour over tax divisions, while referencing tax as ‘comfort food’ for the party (paywalled)

Thomas Coughlan (Herald): Tax debate opportunity for Labour members to be ‘very explicit’ to leadership - former president

Corin Dann and Anusha Bradley (RNZ): Billionaire Mainfreight co-founder Bruce Plested backs wealth tax - with a catch

Peter Dunne (Newsroom): Higher taxes and higher borrowing plans will sink Labour in 2026 (paywalled)

Murray Jones (BusinessDesk): The $17,000 club: bargain lobbying fee or good corporate citizenship? (paywalled)

Susie Nordqvist (Herald): Labour looks at wealth, capital gains taxes - are either right for New Zealand?

Kathy Spencer (The Post): The tax debate that won’t die – why we finally need a capital gains tax (paywalled)

Chris Trotter (Interest): Looking for Labour’s vital signs

Bryce Wilkinson (Herald): Spending cuts versus wealth taxes (paywalled)

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A scandal is raging in the UK over the new Labour Government’s appointment of friends, allies, and donors into high positions in the British state. Prime Minister Keir Starmer is being accused of heading a “Cash for jobs” arrangement in which party donors have been given government appointments. The terms “cronyism” and “chumocracy” are being thrown around liberally.

The scandal has tarnished the two-month-old administration. According to The Spectator magazine, Starmer’s approval rating has quickly dropped: “Sir Keir’s approval rating has plummeted by 27 points, falling from a post-election peak of +11 to a rather dismal -16. More than that, almost two-thirds of Brits believe the new Labour government is more ‘interested in helping themselves and their allies’ than the general public – while a majority of those surveyed consider Labour to be ‘somewhat’ or ‘very corrupt’.”

Meanwhile, here in New Zealand, the debate continues over the political appointments being made to public sector roles by the new Coalition Government. Regular announcements continue to be made about former National politicians and associates being given plum jobs.

Unfortunately, this isn’t being strongly politicised, because all the Opposition parties have also been in recent governments that have handed out similar positions to cronies. This lack of attention, together with a shrug of the shoulders from other observers, means that New Zealand risks being somewhat more complacent than the British public, who seem more outraged by integrity deficits in their politicians.

The “bro-reaucracy” is back – Cataloging the appointments

Cronyism simply refers to displaying loyalty to friends and colleagues by appointing them to positions of authority without necessary merit. Deputy Prime Minister Winston Peters labelled it the “bro-reaucracy” back in 2014 – riffing on the other terms for cronyism, such as “jobs for mates”, “the old boys club”, or “chumocracy”.

Back then, Peters was hitting out at the John Key National-led government, which had made many questionable appointments. For example, in that year, Shane Jones had been poached from the Labour Party frontbench, to be the Government’s Ambassador for Pacific Economic Development – a newly-created position, that was viewed by critics as a smart way of getting one of eliminating National’s strongest opponent from the political arena.

Since, then there has been a decade of questionable political appointments involving all the political parties now in Parliament. Jobs, ranging from high diplomatic posts through to chairs of Crown entities have been given to partisan allies. And there’s reason to believe that each subsequent government is a worse offender than the one before them.

Indeed, there a large number of egregious political appointments have been made in the first year of the Coalition Government. And yesterday, Herald political journalist Derek Cheng published a list of some of the more interesting choices in his article titled “Which former National MPs have been chosen for important government positions?”

Here’s his list:

• Paula Bennett: Chairwoman of Pharmac

• Simon Bridges: Chairman of NZTA Waka Kotahi

• Bill English: Lead reviewer of Kāinga Ora

• Steven Joyce: Leading a panel advising the Treasury on the design of a new infrastructure

• Murray McCully: Leading the ministerial inquiry into the Ministry of Education’s cost blowouts on school property

• Roger Sowry: On the ministerial review team looking into KiwiRail’s interisland ferry service

• David Bennett: On the board of TAB NZ, and appointed deputy chairman of the Callaghan Innovation Board

In terms of remuneration, Cheng reports: “Joyce is making $4000 a day with a total cap of $40,000, while McCully ($2200 a day), English ($2500 a day) and Sowry ($2000 a day)”.

Cheng suggests that these appointments might appear to be “nepotism”. But he also puts forward some arguments in favour of these political employments: “Former ministers and parliamentary workers have unique knowledge and experience of how the Beehive and wider government works, as well as how it engages with the private sector and overseas entities. And if they’ve been intricately involved with a party that’s now in government, they probably have a good idea of the intended direction of travel – and wholeheartedly agree with it.”

Fast Track Bill conflicts of interest

One of the most contentious reforms of the new government is the Fast Track Approvals Bill, which looks likely to be passed through Parliament soon. This has been strongly criticised for its potential to enable corruption via lobbying and political donations.

Key to the Bill’s operations is the Government’s six-member “independent advisory panel” that has been selecting the various business cases to be added to the legislation for fast-tracking. But has this been stacked with cronies with conflicts of interest?

The Herald’s business investigative journalist Kate MacNamara has been carrying out excellent research into the panel members. Her latest article on this, focuses on Rosie Mercer, who appears to have been appointed to the panel by Regional Affairs Minister Shane Jones. He appointed her, originally to a panel to advise on the $3bn being distributed by the Provincial Growth Fund in 2018. She was then appointed in 2020 onto the Covid-era Infrastructure Reference Group. And, since 2022 she’s been a director of Crown Regional Holdings Ltd – which will now advice Jones and his colleagues on the new $1.2b Regional Infrastructure Fund.

When Mercer isn’t busy with the state appointments, she runs the Northland company Marsden Maritime Holdings, which owns half of the Marsden Point Northport in Whangārei. And Northport was an early applicant for the Fast-Track process. This creates something of a conflict of interest, which Kate MacNamara explored in her article last week, reporting that Mercer had to step down from the panel while they considered the bid made by the company she was associated with.

MacNamara quotes me, arguing that Mercer has a much greater conflict of interest than the Government appears to have allowed for – because as both a panel member she had “inside information and connections” which could have assisted the Northland company’s bid. I’m quoted saying “that’s simply not acceptable in any democracy that wants an even playing field for business”, and that she should have been involved in any of the Fast Track processes.

I’m quoted saying: “really just being both a bidder and a judge of the [other] bids is incompatible. If the public is to have any confidence in the process then Mercer should have chosen which role she was going to keep. To stay on the panel, she really should have stepped down from her chief executive role at Marsden Maritime for the period that the fast-track bid was being developed and decided upon”.

Robert MacCulloch, professor of economics at the University of Auckland, also makes some similar points in the article, suggesting that it should have been Treasury – which doesn’t have commercial conflicts of interest – making the recommendations to Cabinet: “This whole process of panels is thoroughly politicised, and it’s not necessary. There are 644 Treasury staffers. Have the Treasury or the Infrastructure Commission evaluate and rank projects, ideally they’d use cost-benefit analysis and the Cabinet could choose projects from that ranking… If the ranking is released then the public can see where politicians deviate from it, and then, of course, they have to explain themselves.”

There’s been other journalists looking at the other political appointees on the Government’s “independent advisory panel”. Andrea Vance detailed some of them:

“Vaughan Wilkinson has a long association with Jones. A former Simunovich Fisheries executive, he is now a general manager at Sanford. The seafood company was invited by Bishop to apply for fast-track. Murray Parrish has worked in the forestry industry since the early 1990s. David Hunt is an economist, and Mark Davey a Hamilton planner once elected to an Auckland local board on a fiscally conservative ticket backed by the National Party.”

In terms of remuneration, Vance says: “these are cronies paid between $1200 and $1600 per day to write the law”.

Official processes needed

There is nothing intrinsically wrong with political appointments. And they have their place in New Zealand’s Westminster-derived constitution. As other commentators have noted, sometimes a Government does need to put their own trusted personnel into certainly selected positions.

Yet, there’s been a growing concern that the ability of governments to appoint their favourites is being done too often and too egregiously. Quite simply, the integrity of the New Zealand public service is challenged by these appointments if they are too frequent and questionable in quality.

There also needs to be a proper process. And it’s not clear this happens at the moment. The Government’s political appointments are generally made via their Cabinet’s Honours and Appointments Cabinet Committee. But this doesn’t mean that the public should be assuaged that there is integrity in all these decisions. Unfortunately, this committee still operates under very loose and opaque conditions. A lack of transparency exists. And it’s often clear that the appointments don’t occur in an open and contested process.

When the Minister of Education Erica Stanford appointed Murray McCully as an independent reviewer into the state of school buildings, eyebrows were raised. After all, 1News reported their backgrounds: “Before entering politics, Stanford worked for McCully in his East Coast Bays electorate office for four years and has previously described him as her political mentor.” And on TVNZ’s Q+A earlier in the year, Stanford explained her logic in hiring McCully: “He is my old boss. I couldn’t think of a better person… He’s excellent. He knows the machinery of government. He’s been working in Northland on major infrastructure projects that have been delivered on time and on budget.”

Reform is required

Six months before becoming PM, Christopher Luxon clarified that he valued having a non-politicised public service. He explained: “In New Zealand we want to have an impartial public service. It’s really important. We don’t believe in an American, politicised public service where we make appointments each time under each successive government.”

Yet, under Luxon’s watch, the politicisation of the public service appears to be continuing, especially via political appointments. Prof Robert MacCulloch, of Auckland University’s Economics department says: “We’re descending into third world status whereby the politically well-connected get all the top jobs… Between National and Labour, we ain’t no meritocracy anymore”.

In other countries, the “revolving door” of former ministers going into problematic public and private roles is carefully regulated. For instance, in the UK, the Advisory Committee on Business Appointments was established precisely for this purpose. Former ministers are required to seek the advice and consent of this group before taking up any new role that might relate to politics and business.

Then in terms of the appointments to positions of significant power and influence, there needs to be some mechanisms to ensure probity has occurred in appointments. The Public Service Commission needs to adopt appointment processes to ensure that the public can have confidence that all appointments are done on merit, regardless of political affiliations. A transparent process of publicly-advertising positions, and then an independent process to short-list qualified candidates needs to occur.

Maybe it’s time, therefore, to establish an Integrity Commission that can carry out these processes. At the moment, there simply doesn’t appear to be enough scrutiny to give the public adequate confidence in the appointments process.

A New “Crony Watch” is needed

One newspaper used to run a weekly “Crony Watch” column, detailing the latest political appointments and developing conflicts of interest. This stared at the National Business Review in 2005, during the Helen Clark administration.

It’s published mission statement at the time was: keeping an eye on political appointments, “given the government’s brazen practice of appointing its close friends to sensitive and ideally impartial boards and organisations.”

According to former NBR journalist Nick Grant, Crony Watch fizzled out at the start of the John Key Government, when prematurely it was deemed that the cronyistic impulses were being suppressed. But the NBR revived temporarily in 2014, and then for a while under the new Jacinda Ardern and Winston Peters government of 2017 – with an intention to lift the rocks “in search of evidence of jobs for the boys, girls and gender nonconforming.”

It seems time for another version of “Crony Watch” to be run somewhere. And I’m sure the public will be aware of many other appointments (and this can be crowdsourced into a list). Here’s three more I’ve noticed recently:

1. Last month, former National MP Lawrence Yule started a new job as Crown Manager to Hawke’s Bay Regional and Wairoa District Councils. He was appointed by Local Government Minister Simeon Brown.

2. Sport & Recreation Minister Chris Bishop has recently appointed former two-term National MP Harete Hipango to the Sports Tribunal of New Zealand.

3. Justice Minister Paul Goldsmith has appointed National Party member Sunny Kaushal, as head of a new Ministerial Advisory Group to tackle retail crime.

Learning from Britain’s crony crisis

What’s currently happening in Britain should be a warning for the New Zealand political class. It appears that the public has suddenly proven less willing to put up with cronyism than the new Government seemed to expect. The outcry has been very loud.

In one of the central parts of the scandal, in which a Labour Party fundraising businessman was given a top job in the Treasury, the Labour Government has had to reverse the appointment. And security access to 10 Downing St, which was given to a millionaire donor has had to be revoked.

An editorial in The Times has complained that voters deserve more than a “chumocracy by stealth”. And a consensus of commentary is starting to be established that “this lot is as unethical as the last lot”. So, despite Starmer coming to power on a promise to “clean up our politics” and to restore “standards in public life with a total crackdown on cronyism”, he’s now widely called a hypocrite.

Prime Minister Starmer can claim that his new government is just doing the same as their predecessors, but that doesn’t seem to cut with a very disgruntled public. Prime Minister Luxon should take note.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

Key Sources

1News: Erica Stanford says no issues appointing her old boss to inquiry job

Benedict Collins (1News): Government denies it’s delivering ‘jobs for the boys’

Derek Cheng (Herald): Which former National MPs have been chosen for important government positions? (paywalled)

Kate MacNamara (Herald): Fast-track bid from Northport sparks debate over Marsden Maritime CEO Rosie Mercer’s involvement (paywalled)

Rowena Mason, Jessica Elgot and Eleni Courea (The Guardian): Furore over Labour cronies’ no worse than Tories’ in government, allies say

Rowena Mason, Jessica Elgot and Eleni Courea (The Guardian): Furore over Labour cronies’ no worse than Tories’ in government, allies say

The Spectator: Starmer’s ratings hit record low as cronyism row continues

Andrea Vance (The Post): Is rebooted fast-track a law written by the Government’s (paywalled)

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