Rutherford on Government by fiat

Hamish Rutherford writes:

Justice Minister Kris Faafoi’s surprise announcement that the Government will make a temporary change to the Property Law Act shows how different governing is compared to just a year ago. …

There was no time for anyone to debate the merits or otherwise of rent relief this time around. Faafoi’s office released news that temporary changes to the law would be made as the Justice Minister was already speaking to reporters on the way into Parliament. He actually alerted them to the release.

He has not responded to interview requests since, but in his only brief comments on the matter appeared to admit that he did not know how much of a problem difficult landlords are.

Most leases include provisions around what to do if a tenant cannot access their building and many others had struck deals voluntarily. Beyond that, Faafoi mused that he understood there were “essentially, a couple of holdouts” that had not reached agreements.

Unless he was making a joke it seems weak grounds on which to insert the Government’s sense of fairness into contract law.

So a law change being rushed through under urgency for a problem that may be no more than a couple of landlords!

Not only did Faafoi fail to consult industry, he actively ignored it. Leonie Freeman, chief executive of Property Council New Zealand wrote to Faafoi early in the latest lockdown offering its members as sounding boards for policy development.

Freeman is still waiting for a response. 

Zero consultation with those affected.

Last year’s untidy attempt to offer compensation appeared to teach the Government that not all landlords were as wealthy as they might have assumed. In many cases the landlords were in a less powerful position than their tenants.

Losing a tenant can be a disaster for a landlord. They still have to pay interest on the debt on the building and have no income. It can takes months or even years to get a new tenant in some areas.

The Government is not proposing to force banks to offer concessions on loans, councils to reduce rates or insurance companies to reduce premiums. Forcing rent relief is choosing one of a number of problems and forcing that problem on to someone else.

Exactly. Why not force Councils to reduce rates instead?

Time and again political observers have warned that Labour is prone to close ranks when it faces complex problems, make decisions based only on input from those within the Beehive then be forced to try to push through bad policy because it has already announced the decision.

It does further damage to New Zealand’s reputation as a stable operating environment because investors perceive that the rules may change with little notice or research.

Government by fiat under urgencu

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