Vetoing democracy

Written By: - Date published: 8:19 am, April 12th, 2012 - 46 comments
Categories: democracy under attack, same old national - Tags:

Parliament is supposed to be the sovereign body in our government. So, how come the Executive has an unchallengeable power to veto any legislation it chooses? As I/S explains, the roots of the financial veto go back to when Parliament was a servant of the Crown, but its legislative justification has been repealed. Time to drop the archaic, undemocratic financial veto.


The prospect of Labour passing its Parental Leave and Employment Protection (Six Months Paid Leave) Amendment Bill over the top of the government has raised the threat of a Crown Financial Veto [now confirmed], of the government disallowing a bill even though there is a Parliamentary majority supporting it. So what is this veto, and where does it come from?

The answer, of course, is Britain. Our Parliament descends from the English Parliament, which began not as an independent, elected, representative body, but as the King’s Parliament. It existed basically for one purpose: to approve taxes to pay for the monarch’s hobbies (such as drinking, buying palaces, and waging war against his fellow monarchs).

Of course, it grew into something a little different from that. But the underlying feudal mindset remained (and remains to this day in the UK). So when the British drafted our first constitution in 1852, they included a clause saying that Parliament (or the Legislative Assembly as it was then called) could not appropriate money except as recommended by the Governor. When we took control of our constitution in 1986, this clause was re-enacted:

The House of Representatives shall not pass any Bill providing for the appropriation of public money or for the imposition of any charge upon the public revenue unless the making of that appropriation or the imposition of that charge has been recommended to the House of Representatives by the Crown.

In other words, Parliament was (still) simply the financial rubber-stamp of the executive.

But our Parliament grew again, with MMP shifting power from the executive to the legislature. In recognition of this – and the fact that the government no longer had an inbuilt majority to vote down spending – the Standing Orders were changed, introducing the “financial veto”. This reflected the law at the time. But then, in 2005, the law was repealed. So now we have a financial veto with no underlying statutory authority.

How does this fit with a country where supreme power is vested in a democratically elected, sovereign Parliament? The short answer is that it doesn’t. In modern New Zealand, it is Parliament which rules, not the executive. Oh, Ministers make the day-to-day decisions, and generally shape the laws, but it is Parliament which has the final say. And if Parliament refuses their legislation, or passes something they don’t like, the government just has to lump it. We accept that principle for ordinary laws, and we should accept it for financial matters too. The financial veto should be abolished.

But wouldn’t this make it difficult for the government to govern? Firstly, arguably if the government has lost control of its spending, then they have lost the confidence of the House (confidence and supply being all about who controls the money). But this also points at the solution: the government, by definition, has a majority on confidence issues. If it really doesn’t like Parliament appropriating money for something, it can make it a matter of confidence, and stand or fall on the result. That would be the democratic solution. Sadly, I don’t expect autocratic National to take it.

46 comments on “Vetoing democracy”

  1. Bunji 1

    Bill English at his arrogant best on Morning Report this morning.

    Apparently Parliament shouldn’t “run-away with itself”, like a bunch of school children, rather than the sovereign power of the land. Parliament “gets its say” at budget time, when he’s sure he’s got the numbers.

    Apparently Parliament shouldn’t do anything that’s not sensible, and it’s Bill who gets to decide what’s sensible. Great faith in democracy that man. Not autocratic at all, no…

    [Great post by I/S by the way]

    • Bunji 1.1

      Apparently Bill used the financial veto for an amendment on National’s first legislative act… Making sure that the poor were worse off by his first set of tax changes.

      So he’s probably become somewhat accustomed to it – doesn’t make it right…

      Still, unlike amendments, he can’t veto this one until the third reading – so we should get to work out the real cost of it in Select Committee, rather than Bill’s $150 million out of his posterior…

  2. muzza 2

    Very good post, informative on multiple levels – Inciteful too, should the financial veto be used, it should expose the NACT for what they are, flat out even to the ardent fan boys!

  3. Ed 3

    If the “veto” is indeed merely part of Standing Orders, with no other legislation requiring a complex process to change, can a majority of MPs vote to suspend that section of Standing Orders for the duration of consideration of this Bill. At the very least, such a justification would be in order to ensure debate on the bill, to enable the house to consider expert advice from government departments about the wide financial and other effects possible from the proposed changes, and to enable New Zealanders to make submissions on the bill.

    I see that the Herald is running an online poll – perhaps we should just use such polls as the unerring measure of considered public views on this and other issues instead of worrying about the expense and time involved in parliament . . .


    • The veto is losing, even on the herald’s site, which is notoriously full of fan-boys and -girls for the Nats.

      If the government even gets away with using a veto that has no statutory justification, it’s going to bite them in the next election when everyone hates them and they bleed support to their allies, assuming it doesn’t cross the chamber, of course.

  4. bad12 4

    The Executive wing of the Parliament having dictatorial powers of veto over the wishes of the Parliament cannot continue,

    At a time where voting in the electoral referendum has just passed with renewed emphasis MMP as our democratic system and submissions are being called from the public as to how our electoral system, (seen as the most democratic), can deliver an even more and diverse democracy to us all we are rudely reminded by the invocation of archaic ”rules” never tested by the Parliament that we still live in a dictatorship of and for those who oppose the further democratization of our society…

    • muzza 4.1

      Does “The Crown” still have the ability to disolve our parliament, on advice from the Governor General, as has been done multiple times to Canada over recent years?

  5. I think there’s a valid reason for allowing vetos. The last Labour Government did it a couple of times (I don’t know how justified they were).

    It’s reasonable to have a way of limiting how the opposition parties can impose policies that are manifestly counter to the policies of the Government of the day.

    That doesn’t excuse National’s current position, promising a veto before the bill has even presented, been debated and sent to select committee is bad politics. Possibly encouraged by pressure of premature and bad politicking.

    • bad12 5.1

      Provide us the proof that ”the last Labour Government did a couple of times)…

    • bad12 5.2

      Democracy is simply Government by the majority,if the House of Parliament enacts legislation into law it is the Executive of that Parliaments role to ensure such legislation in spirit and intent is upheld as the law,

      The executive of the Parliament is not ‘there’ to impose dictatorial paradigms from within which the Parliament can enact legislation,the Executive arm of the Parliament is simply ‘there’ as the servant of the Parliament to manage the legislation as passed by that Parliament as the interface between the Parliament and the people…

      • Actually there is no requirement for majoritarian rule under a democracy. (You could, ala the Occupy movement, operate a democracy by local participatory consensus, and still be a democracy) All it means is that citizens, collectively, get together to determine policy, and that any representatives are effectively held to account by the citizens, either through the media or directly.

        The problem with this veto is that it’s probably illegal, and has no policy justification, not that we’re never allowed to have vetoes in place for certain eventualities.

    • Rosemary 5.3

      “It’s reasonable to have a way of limiting how the opposition parties can impose policies that are manifestly counter to the policies of the Government of the day”

      You’re thinking in FPP terms. The reason why we have MMP is precisely to put the brakes on things government might want to do that don’t get a majority in the House, such as, in this case, potentially, leaving the paid parental leave provisions where they are. Surely if there’s a majority in the House that would extend paid parental leave (once the final vote happens, of course) then this should happen?

      Would you be in favour of adding a new kind of veto, one that a left-led government could use which blocked legislation that, say, had too detrimental an effect on the poor? – or sucked up spending ear-marked for health or education and gave it to the rich because it’s “manifestly counter to the policies of the Government of the day”?

  6. Chris Trotter’s comments clarify the power of the veto.

    Chris Trotter said…

    The reason the Executive is able to exercise a veto over legislation like Sue Moroney’s PMB is quite simple – and actually quite democratic.

    Under our Westminster-based constitution the Crown (i.e. the Cabinet) asks Parliament to appropriate a specified amount of money for the purposes of governing the realm. This is the exercise we call The Budget.

    If it wants more money from the people, it must seek a further appropriation.

    The veto exists to prevent Parliament from legislating for an increase in expenditure (in this case 12 more weeks of PPL) without, at the same time, appropriating the money to offset it.

    Only the Government gets to spend money – not Parliament. Parliament’s role is to vote money (in the form of taxes, duties and dividends) to the Crown and monitor the way the Crown uses it.

    The Government, in turn, cannot function unless it has a majority of MPs willing to vote for it’s Budget.

    And we, the people, get to elect the MPs.

    That’s the way our democracy works.

    So the PPL is a valid use of the veto – but I think English should at least have allowed it to get as far as select committee to see what form the proposal might end up in.

    Ruling it out in advance regardless is not a good look.

    • bad12 6.1

      Don’t change the subject,YOU made an allegation that a Labour Government had used this Veto at least twice befor,

      Please provide the proof to back up this allegation…

      • Pete George 6.1.1

        See 5.1.1 and above.

        • bad12

          ”Proof” to You might rest within the various comments posted upon right wing blog-sites, but, for the majority of us someone saying something is such and such often enough brings such no closer to being the truth from its first utterance even if such utterances have enumerated 1000,

          Trotter whom you seem to have taken great joy in quoting at length is certainly no expert on the democratic process and from the comments you have attributed to Him gives every appearance of either being inebriated or waffling in an effort to promote the cause of His new masters,

          The democratic process is simple and it is thus, The Parliament proposes and enacts Legislation, The Executive proposes the budget for new and existing Legislation and from where within its realm the finance for this budget will be sourced,

          If in agreement with the budget The Parliament votes its consent for the Executive to raise the finance from the sources as outlined in that budget and disperse it into the various Ministry,s of Government…

          • Chris

            Tumeke is a right wing blog site now? I’m sure Bomber will love to hear that

            • bad12

              Snigger,feel free to pass the comment on, Mr Bradbury speaks with greater clarity,(our opinion),when He has been right royally pissed off with a small spot of niggle…

    • bad12 6.2

      Luckily for us all Chris Trotter does’t get to say HOW our Government works,and,as per the description We give above We don’t think Trotter is right on this issue…

    • Colonial Viper 6.3

      Forget the detail mate, just frame it as English not supporting due process in the spirit of democracy and denying Kiwi families the right to have a parent at home looking after a young infant.

      • Herodotus 6.3.1

        Income splitting is purported to also be a part solution to this, and we all know how helping families out in this manner was listened to.
        Also just who did benefit from Labours policies? Perhaps “…the real beneficiaries have been middle class families who have received more generous subsidies and who have left their children at child care centres for longer periods while they work more…”. Is this the same group that was protected by Labour in regard to the massive capital gains that were recorded (untaxed) under their time in power ? Sure give to those in need and allow them to share adequately as being an active and inclusive part of society.
        And CV this right re a prent at home is not what the Neolibs wish for as can be seen “Clark said she wanted to boost women’s participation in the workforce, as it would improve economic growth.” Its all about the world of big business and the 0.1%

    • Draco T Bastard 6.4

      No, that’s anti-democratic. Parliament tells government what to spend the money on and then government changes the budget to suit.

      Or, to put it another way, BLinglish coming out and saying that they will veto the bill is an admission by this government that they no longer have the confidence of the House and we should be going into an election within the next 6 months.

    • It’s down to the government’s support partners requiring it to follow the law and preserve the sovereignty of Parliament over the executiv- oh wait, what am I saying, since when were ACT and UF concerned with our constitution?

      The law should be allowed to pass. The government is not required to release funds for it unless required to by a court, true, but there’s also no justification to veto it.

    • Rosemary 6.6

      “If it wants more money from the people, it must seek a further appropriation.”

      Yes, but don’t forget that it’s parliament itself that would be passing or not passing the Bill, as the case may be. Surely any necessary appropriation would be done part and parcel of the parliamentary process.

  7. ianmac 7

    In any case, should the swell of Public opinion rise into a large wave, it might prove to be unwise politically for National to action the veto.

  8. irascible 8

    Because NZ is a unicameral parliament the power of the undebated veto is easier to impose. If we still retained an “upper House” the chance to relitigate a decision by the lower House would be available.

    • Draco T Bastard 8.1

      Um, the actual best option would be to get rid of the veto.

      • bad12 8.1.1

        Replacing such an Executive veto with legislation which would require that legislation such as that proposed in the Paid Parental Leave bill which was not part of a Government program have attached a ”no surprises” clause where the executive would have at least 6 months befor a budget was put befor the Parliament so as to allow the Executive to include the provision of funds for such legislation would seem simple enough,

        All political Party,s should get up to speed with the reality of MMP and the liklihood that the MMP system will in the future include a far greater number of small Party,s and individual single issue MPs than the present Parliament envisages,

        In a diverse Parliament Government by minority Government is likely to be the rule rather than the exception and such Government should be beholden by the democratic process to accept that from time to time the Parliament will pass legislation that such minority Government has neither budgeted for or intended to legislate…

  9. Treetop 9

    It is my understanding that a private members bill has never been vetoed before.

    Why bother placing a private members bill into the ballot box and then when it is drawn it is vetoed without even having a first reading?

    National have made a mockery of an opposition members private bill and I regard this as being undemocratic.

    • Herodotus 9.1

      No more undemocratic than calling in the Whips on a conscious vote, especially as the action of the MP’s being forced to comply with the party was not signalled at an election, in fact all efforts were made to hide such an action. there are so many other actions that fly in the face of the voter it is amazing that “Only” 1 million did not vote in the last election 🙂
      So now those on both the left/right have found out that governments do not follow the ideals of democracy. At least we in NZ I suppose get to participate in the game of democracy as opposed to those under dictators and the likes.

      • Treetop 9.1.1

        Specific time is allocated to hear a members bill in the house. I expect this is because of the opposition not being in government. There is no excuse for not having the Paid Parental Leave Bill debated.

  10. Jenny 10

    Rule by decree,

    What does it mean?

    Why bother having debate in house, or even voting on legislation, when the government has a power that allows rule by decree.

    Couldn’t the veto power reduce the business of parliament and parliamentary process to pointless pageantry?

    Does it threaten to make the role of opposition irrelevant?

    Why would we even need an opposition in the house, when any time parliament threatened to vote against the government, the government used the veto?

    If the opposition and the parliamentary process is irrelevant, after an election should only the government get seats?

    The fact that this veto power has been used for a family friendly issue rather than a national emergency, suggests that we will see this law used much more in the coming years.

    Rule by decree effectively devalues parliamentary democracy.

  11. Jenny 11

    What is happening here?

    Government is saying that parliament doesn’t matter.

    Winston Peters

  12. Jenny 12

    So much for checks and balances of our parliamentary system.

    • Colonial Viper 12.1

      Its the classic 3 year quasi-dictatorship with an election intervening before the start of another 3 year quasi-dictatorship.

  13. Jenny 13

    If. (as they should), United Future pulls their support for Confidence and Supply over this piece of government treachery.

    Could the government continue to rule using the veto for everything?

    If only Muldoon had, had this power in 1984, he wouldn’t have needed to call a snap election in an attempt to thwart parliament.

  14. Jenny 14

    If the single biggest party in parliament can over rule the majority of other parties, surely this would defeat the purpose of MMP?

    As Winston Peters asked: “What’s going on here?”

  15. Jenny 15

    Is there any limit to how much the biggest party can veto the rest of parliament?

    What if the switch was National 40% Lab. 34% Greens 20%, the rest 6%?

    What if there was a National Party revolt as there was in 1984?

    How much would National’s majority have to be slashed before they couldn’t use the veto?

    • Treetop 15.1

      You ask some very good questions.

      Do you think that the English is doing this (veto) as a diversion for the ACC scandal?

      Key and Collins have been out of the country this week.

      Peters this morning said that veto had only been used on amendments and that the government was being undemocratic.

      Key needs to wake up and start being a RESPONSIBLE PM not a fascist dictator.

  16. Jenny 16

    Peters this morning said that veto had only been used on amendments and that the government was being undemocratic.

    This is correct, that this extreme piece of legislation, instead of being used to address some extreme national emergency, is being employed to cancel legislation in favour of mothers and babies, is very worrying for our democracy.

    Do you think that the English is doing this (veto) as a diversion for the ACC scandal?

    No, but I do think that this represents an acceleration of the continued casual use of extreme dictatorial measures by this government.

    In my opinion the habit of using dictatorial power and over ruling democratic procedure has been normalised by this government.

    Witness the sacking of the elected members of Environment Canterbury and their replacement with unelected pro-pollution government commissioners.

    Witness the imposition of CERA on the Christchurch rebuild. Which Yani Johanson in his Christchurch Star column (April 16) highlighted the undemocratic nature of the Canterbury Earthquake Recovery legislation:

    ‘Essentially the Minister does not have to consult on recovery plans being developed and amended…He can force the city council to do whatever he wants,whenever he wants. with very little checks and balances.

    Johanson who is a city councillor said that he and the other councillors had no opportunity to take a formal view of the legislation. He reported that the legislation was given to Bob Parker and legal advisers ‘in confidence’ and the councill were not allowed to see the legislation until it had been introduced in Parliament.

    Isn’t this all part of a drearily repeating pattern?

    Secrecy, dictatorship, imposition and finally hypocrisy.

    Remember that National Party MPs derided the Clark administration for being dictatorial by trying to legislate for energy saver light bulbs and for limits and openness on the rights of big money to buy influence in parliament.

    • Treetop 16.1

      I just hope that a bill cannot be vetoed when a conscience vote is required. This would then be a totalitarian act.

      The audacity of the National Government with their paper thin majority. All the opposition parties in parliament need to strongly voice their disaproval in National’s “secrecy, dictatorship, imposition and finally hypocrisy.”

  17. Jenny 17

    What gets me, is that the opposition parties take this abrogation of democracy so calmly.

    Compare this calm reaction, to the 2007 National Party opposition to Electoral Finance Act. The National Party Opposition, as well as delivering thundering denunciations in the house on “this attack on democracy” organised protest marches and demonstrations. And was successful in watering down this legislation.

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