Why the §59 repeal and asset sales are different

Posted: June 26, 2012 in democracy, economic justice
Tags: , , , , ,

There’s been a lot of noise from the right wing in this country that ignoring the family first referendum and going ahead with the §59 repeal is the same as the government of today ignoring the keep our assets campaign and going ahead with the mixed ownership model bill. (which I am now shortening to ‘MOM’)

As promised, here are more than three reasons why that’s rubbish:

  1. The previous referendum didn’t actually address what the bill did, it addressed a strawman of the bill that hasn’t come to life since. No innocent parents are being arrested for symbolic smacks. It was possible to say ‘no’ to the referendum question while still supporting the repeal- in fact, I convinced some people that they actually wanted to vote ‘yes’, to more clearly express their support for the repeal.
  2. It’s unlikely that people will deliberately spoil their ballots en masse to express their disdain for the current referendum question. A significant number of people did so for the previous referendum.
  3. The justification for repealing §59 was never that the public supported it. It was purely on the merits of the policy, and parliament (because the repeal enjoyed broad support of almost all of that parliament, in the end) was okay with owning that decision and going with policy over politics.
  4. One basic democratic ideal is that of continuous consent. We live in a democracy, but the government is trying to claim it doesn’t need continuous consent from the public by claiming that the election was a mandate for asset sales.
  5. Some argue that the public misunderstand the MOM. But all of the public criticism of these asset sales still applies.

To go into each of these a little deeper…

Firstly, the §59 repeal was a very specific bill geared towards removing a defense for the crime of assault, with the aim of making prosecution of serious child abuse easier in cases that went before a jury. If the question were to address the repeal bill, it should have asked “Should we repeal reasonable force as a defense for parents or guardians charged with assaulting children under their care?” It did not aim to prosecute ordinary parents for smacking, whether said smacking was “good” or not.

Secondly, if the question is so atrocious in a referendum that people are protesting it by spoiling their ballots, then something is seriously wrong with it and using it as a justification for anything is spurious at best. I won’t deny it did indicate that there was a lot of ill will about the repeal bill, but that’s okay. The left owned an unpopular decision, and I think it has actually made us a better country for having the debate, as it has reduced tolerance for both outright child abuse, and for corporal punishment.

Thirdly, there are two models for justifying a given policy. You might call them “grass roots” vs “centralised”. National has claimed that asset sales had a mandate, ie. that they were justified from the grass roots. Parliament decided it was going to mandate the §59 repeal itself onto other branches of government, ie. that they were taking centralised authority, and leading public opinion rather than following it. A referendum against the second type of decision doesn’t really influence parliament, wheras a referendum against the first type ought to.

Fourthly, to quote myself earlier,

A political mandate is retained by the support of the voting public. Note that word I used, “retained”? You don’t just get to have one for three years after winning an election, not if you endorse a democratic system which requires continuous consent of the governed to function.

John Key got a mandate to form a government, (which is what your politics 101 text book refers to, but I don’t think you’re a child, so you should already know that passing policies and forming a government are two different things that each require their own mandate to be justified) but there was never a clear display of public support for asset sales, as they weren’t the only issue at play in the election. He’s never obtained one since. This is a dramatic change of national policy that Kiwis have opposed ever since the first time it was hoisted on us, back when Labour was acting like, well, ACT.

You can pass a law without a mandate from below, if you have a good reason to – hence why we disagree that this referendum and the previous one are comparable. This is the reason that common definitions of mandate include a “higher command”- you can have a ‘strong leader’ who decides that they know better than the populace, if they’re willing to sell their idea and own it if it’s a failure. National have wisely not tried that justification for this policy.

We’ve let National choose their own justifications, and we’ve knocked each one they’re actually willing to admit down. Passing this law is undemocratic, it’s economic self-harm, it’s theft from the public, and it’s just plain stupid. I’m not sure what more you could ask for in terms of reasons to stop it.

The government never got a direct mandate for this policy, and it certainly doesn’t have one now, when it proposes to actually put it into action. Polls have always opposed asset sales, but the government said that their popularity meant that people supported them.

Fifthly, the public understand just as well as the government, if not better, what is going on. The problem, from the government’s perspective, anyway, is that people have realised that partial sale is little better than full sale. With partial sale comes the move to a corporate model for SOEs under the MOM, which is the cause of many of our previous issues with asset sales- a corporate-structured entity owned by the government is almost as bad as a corporate-structured entity accountable only to its shareholders. With partial sale comes minority shareholder rights, which means the government does not really retain full control of the company as it claims to- shareholders have legal justification to sue the government if they vote for any action that can’t be justified as increasing profits.

And for bonus points, I’m going to go for the other two defenses of passing this bill that don’t really relate to the referenda. The government attempts to defend the sales by saying they’ll be to kiwi mums and dads, and we’ll try to get them to keep those shares in New Zealand. Well, that’s a load of rubbish. In the sense that the term “mums and dads” is used in politics, it usually refers to median kiwi families. They will buy, at best, a vanishingly small minority of the shares put up for sale. As always, investment will be done, in the large majority, by the investment class with the existing wealth and disposable funds to afford it. Having kiwi millionaires own the shares is little better than having overseas billionaires and multinationals own them- it’s still benefitting people who don’t need more wealth, and who aren’t going to govern these former SOEs in a way that will benefit ordinary people.

Not only that, the government’s only announced plan that could reasonably prevent people from on-selling their shares to wealthy foreign interests, and worsening our cashflow problem, is that they want to offer bonus shares to people who hold on to the current shares. Except- <em>whoops</em>- they don’t have time in Parliament left to pass a law authorising that, and any capital loss (ie. spending that’s not an investment of some type) not authorised by an Act of Parliament is illegal, so they can’t.

The final attempt to defend this dead idea is that the sales will be good for the economy… except they’ll lose the government money in only a few years, the interest rate on our national debt is so low that cutting our way to a surplus doesn’t really do much for the state of our debt, and the higher electricity prices are likely to plunge growth back into the negatives again. So this is a relatively rare case of a bill which has completely no justification.

Remind me why it’s going to pass through parliament, again? Oh, right. Because Peter Dunne wants to be in every government he possibly can. What a great reason for stealing our state-owned power companies from us.

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