Minnows, pike and parliamentary sovereignty

Otago Daily Times

7 hours ago

"In a lake stocked with minnows and minnow-eating pike, freedom for the pike means death to the minnows."
So said 20th century philosopher Isaiah Berlin. He was warning us to be wary of occasions when the rich and powerful argue for greater freedom. They already have a great deal of freedom, usually a lot more than the rest of us.
Act New Zealand's proposed Regulatory Standards Bill appears to be one of these occasions.
The Bill states that any proposed legislation will have to be held up to certain principles. However, they are a very limited number of principles, mostly based on individual rights and property.
Why just the principles important to Act? Why not hold legislation accountable to how it will affect child poverty? How it will impact on rights to education and health? Whether it will lead to increases in crime or unemployment?
There are any number of principles they could align legislation to, and yet individual and property rights is where they are focused.
Why have principles that primarily benefit the rich and powerful? Why not have principles that benefit the majority, especially those in these unending crises we have had since the Global Financial Crash in 2008?
One of the main objections to the Regulations Standards Bill is that it puts limitations on Parliament's sovereignty and it is beyond ironic that one of Act's objections to the way that the Treaty of Waitangi was being applied was that it encroached on Parliament's sovereignty.
We have a system that has created a lot of wealth for certain individuals, and some of those who have accumulated that wealth want to ensure that they keep it and are also able to accumulate it at an even faster rate.
This month the NBR announced that the total valuation of New Zealand's rich list had risen from $95.55 billion last year to $102.1b this year. Their wealth has gone up by 6.8% and is not an outlier. In 2023 the valuation of the rich list was $72.79b, meaning that their combined wealth had gone up 50% in the two years that included a recession and a cost of living crisis.
The annual inflation rate is currently 2.5%. The New Zealand cash rate is 3.25%, Kiwi Bonds are around 3.5%, and one-year term deposits are less than 4%. So the very wealthy are accumulating wealth at a much faster pace than the rest of society.
Some of the money the very rich make is ploughed back into their businesses to make them more efficient and productive, and some is used to look for further business opportunities. Sometimes these are very risky opportunities, and sometimes that riskiness is a surprise such as earthquakes, cyclones and their close cousin, presidentially declared tariffs.
However, a lot of their wealth appears to go into buying assets.
United Kingdom economist Gary Stevenson claims that the super wealthy live in an economic black hole that sucks in wealth. If you have $100million and your wealth conservatively goes up 6% that is $6m a year. That is a lot of money to try to spend on holidays, food and clothes.
They can't spend that much and so what they do, according to Stephenson, is buy assets. They are always ahead of inflation so their money just grows and the value of the assets they have, and the assets they buy, goes up.
It is his explanation as to why it is so much tougher to buy a house than 20 years ago and why real estate, gold and the stock market continually trend upwards.
Structurally, if it is true that our current system is tailor-made to shift wealth from one part of society to a very small minority of society, it is no wonder they want to lock it all in place before the rest of us find out.
At the same time as our small population of very wealthy are growing wealthier, the number of homeless people is skyrocketing. Statistics New Zealand claimed at the 2023 census over 112,000 New Zealanders were "severely housing deprived", including 61% living in "uninhabitable housing".
This did not include any of the 396,000 people they had no information on.
Change needs to come, but not in legislation that locks in the gains of the top 5% and locks in the losses of the majority. We don't have to worry about the rich, they will be OK. Even if they lose their fortunes, they have the skills and networks to bounce back up again.
We need an economy that rewards risk and innovation but at the same time provides affordable housing and health, education and social services.
Parliament is perfectly able to do all this without passing the Regulatory Standards Bill.
Submissions on the Regulatory Standards Bill close on June 23.
• Dr Anaru Eketone is an associate professor in the University of Otago's social and community work programme.