Government undermining our reputation as a safe place for business

Tuesday, 27 May 2025

Jordan Williams says the Government move to extinguish a class action against two of the big banks through a law change undermines New Zealand’s reputation for stability.

Jordan Williams is the executive director of the Taxpayers’ Union.

OPINION: When National campaigned to replace the Labour government, it was quick to criticise its predecessors for increasing investment uncertainty: highlighting the oil and gas exploration ban and the expropriation of private Covid testing kits as prime examples. The promise was clear: restore New Zealand’s reputation as a secure and predictable place to invest and do business.

But now in power, the National-led Government is doing little better. Instead of delivering stability, it’s doubling down on the sins of the past. Case in point: the Credit Contracts and Consumer Finance Amendment Bill.

The bill proposes retrospective law changes that would extinguish an active High Court class action brought by tens of thousands of Kiwis against banking giants ANZ and ASB.

This case, focused on alleged unfair lending practices under the existing Credit Contracts and Consumer Finance Act (CCCFA), is precisely the sort of consumer action that should be allowed to run its course. At the very least, a government that claims to value fairness and transparency should not interfere.

Willis said she was issuing a ‘Request for Information’ which would ask potential supermarket companies what changes are needed to enable them to compete nationally.

But rather than defend the public interest, the Government is siding with two Australian-owned banks, snuffing out years of litigation and millions in legal costs with the stroke of a pen. The Government seems to confuse legal certainty with simply siding with big business. They're not the same thing.

Retrospective legislation should always be a last resort. When it interferes with live court proceedings, it cuts to the heart of the rule of law. It tells citizens and investors alike that the rules of the game can, and will, change if it’s politically expedient.

Few would dispute that the original CCCFA was flawed, but that does not justify eliminating legal rights after the fact without compensation. That’s not law reform. That’s rewriting the rules for the benefit of the powerful. It completely undermines the very image this Government claims to project: a safe and stable jurisdiction with dependable law-making.

Unfortunately, this is not a one-off. The Finance Minister’s threats to forcibly restructure the supermarket sector further reinforce the perception that New Zealand is becoming a risky, unpredictable place to do business.

Political scrutiny of the supermarket sector is another example of the Government undermining the stability it professes to offer to the business sector, argues Jordan Williams.

Nicola Willis muses about attracting international competition to break up the existing duopoly, but who in their right mind would invest in a country where the minister openly threatens to disrupt existing players’ legitimate expectations even before the regulator (in this case, the Commerce Commission) has concluded such a move is necessary? That kind of unprincipled regulatory brinkmanship would make even Muldoon blush.

The irony here is rich. Elsewhere on the parliamentary order paper, the Government is proposing the Regulatory Standards Bill, a measure to ensure transparency, predictability and good practice in law-making. The bill’s own text stresses the importance of avoiding retrospectivity. Yet, on the same legislative agenda, the Government is pushing through a bill that does exactly that.

The Regulatory Standards Bill reflects the kind of common-sense, good law-making principles that used to be standard in this country, principles once upheld by Parliament as unwritten constitutional norms. Perhaps that was because in generations past, a far higher proportion of MPs were trained lawyers rather than political apparatchiks and corporate lobbyists.

It’s commendable that the Government wants to enshrine these principles in law. But if those standards are to mean anything, they must be lived, not just legislated. Good governance isn’t about lip service. It’s about walking the talk. And right now, the Government is failing the very test it set for itself.

If the Government wants to reclaim New Zealand’s reputation for stable, rule-based governance, it should start by dropping the retrospective provisions from the Credit Contracts and Consumer Finance Amendment Bill.

Either that, or admit that when it comes to the rule of law, this government is no better than the last lot.

Read the Banking Association’s perspective on the review of the Credit Contracts and Consumer Finance Amendment Bill here.