On Entrenchment: The Politics of Anti-Privatisation

I was not wanting to wade into New Zealand’s little furor about the proposed Three Waters reform. To be honest, Labour has brought this one on themselves – the task of cleaning up this country’s waterways really ought to be funded via the resources (financial or otherwise) of the sovereign state, and not a strange little hodge-podge of regional authorities – too distant to be genuinely accountable at the local level, and too bureaucratic to be accountable at the national level. Really, the underlying problem is that Labour is absolutely committed to low tax, low debt financial orthodoxy, and absolutely terrified of the Courts, being entirely unwilling to put those unelected judges back in their box. The shadow of the Fourth Labour Government looms large with the current lot.

(So co-governance? I consider that to be a red-herring. The matter is really one of accountability).

But now the furor has turned to the constitutional matter of parliamentary entrenchment. The advocates of Three Waters have been trying to enact a provision that 60% of MPs need to vote in favour of water privatisation in order to sell those assets.

Now, do not get me wrong: I consider the privatisations of the 1980s, 1990s, and the 2010s a crime against the people of New Zealand. It was nothing more than looting.

It’s just that vandalising the unwritten New Zealand Constitution is not the right way to stop this happening in future. For a start, National (with justification) would not respect the entrenchment – they would literally repeal the entrenchment provision, and go about their merry way. Perhaps entrenching their own policy preferences while they are at it (which Labour in turn would not respect).

One does not enforce a political norm by passing a law banning the other major party from changing that norm… it not only does not work, but it brings your entire project into disrepute. It’s almost like the advocates of Three Waters do not actually value the basic principle of majority rule. Requiring 60% to actually enact a democratically-mandated agenda is the sort of idiocy associated with the US Senate, not New Zealand. 41% should not be able to dictate to 59%.

So how to address the fear of future privatisations? Easy. You actually do the hard yards, get out there, and make privatisations politically toxic among the public. It’s been over thirty years since the Free-Market Revolution, so people might be less angsty about them today than twenty years ago… but one wins the policy debate via hearts and minds, and not by parliamentary vote. National opposed Labour’s 1930s social welfare reforms at the time. By the time they won power in 1949, however, National was absolutely committed to maintaining the Welfare State, since any attempt to undo Labour’s creation would have seen them turfed from office. The prospect of losing democratic office can be a powerful motivator.

But what if the next National Government were to go ahead and privatise anyway?

Well, the obvious political strategy from Labour would be to declare that, on returning to office, they will compulsorily repurchase the looted items, at the price they were sold for. That has the effect of discouraging the vultures from purchasing the privatised assets, while at the same time rendering National’s agenda entirely moot. A few rounds of this, and you kill privatisation stone-dead politically. Sure, it would also mean that Labour would have to take on more debt to afford the repurchase, but if the Government can take on debt to fund the Covid response, it can take on debt to save New Zealand’s assets. They could declare that it was National’s fault in the first place.

But that would require Labour to have some actual guts, in terms of rejecting neoliberalism. Which of course they don’t. They’re so committed to the post-1984 framework that they would rather trash New Zealand’s Constitution first, albeit, the entrenchment push actually comes from the Greens. Never mind the blatant kowtowing to the whims of the (increasingly Americanised) Courts either – there is a latent fear of democracy among the New Zealand Political Left right now, and I do not like it.

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