Ardern’s Orwellian move to ban exploration

Papers reveal the real reason behind decision

One makes the revolution to establish the dictatorship George Orwell

Jacinda Ardern’s use of prime ministerial fiat to ban new offshore oil and gas exploration is disturbingly Orwellian. Official papers released by her hapless Energy Minister confirm what was already blindingly obvious to anyone who has observed close-up the process of Governmental decisionmaking — the ban was purely political.

A decision that was kicked upstairs and made by Ardern, NZ First Leader Winston Peters and Greens Leader James Shaw. And rushed through — without being contested through appropriate Cabinet consideration — so it could be announced on April 12 just before the Prime Minister headed to Europe.

What it also confirms — as I wrote in April — is Ardern put her debut as a global climate change warrior ahead of making credible plans to transition New Zealand away from a reliance on fossil fuels towards clean energy.

There’s no other way to interpret the documents and emails that have been released this week.

As Energy Minister Megan Woods put it: “This decision was about taking political leadership to act on climate change and its flow-on impacts . . . it was a political decision, looking out 30 years and taking steps towards 2050 being emission neutral.”

In her public statements, Woods has conveniently overlooked the fact the decision was obviously also an economic one with considerable ramifications for the oil and gas industry and downstream players.

On April 10 — two days before Ardern unveiled the decision — officials warned Woods the proposed ban would be “detrimental to a number of public policy objectives”.

It would not only decrease economic activity in Taranaki (currently home to NZ’s highest paid provincial earners) and increase costs to consumers, but it would increase the risks around security of supply and result in a reduction in Crown revenues from lower future royalties.

Importantly, as the Ministry of Business, Innovation and Employment (MBIE) pointed out, the reduction of domestic greenhouse gas emissions would be negligible. Said MBIE: it would more likely result in increased global emissions as methanol produced from gas at Methanex’s Taranaki plant would be replaced by methanol produced by using coal from China.

This should have screamed red alert to a responsible Cabinet Minister and provoked others with relevant ministerial responsibilities — like Finance Minister Grant Robertson, Economic Development Minister David Parker and Regional Development Minister Shane Jones — to weigh in with advice from their officials.

But judging by the email trail, the Energy Minister was by now pretty much reduced to being the PM’s messenger — a mere go-between.

Ardern could usefully claim the April 12 announcement did help her forge a commonality with French President Emmanuel Macron and German Chancellor Angela Merkel when it came to climate change “virtue signalling”. The spin goes that New Zealand needed the personal support of Macron and Merkel for the launch of free trade negotiations between New Zealand and the EU. There is some force to that argument.

But it is also true that preliminary work on the EU-NZ FTA was done by the previous National Government. Top EU officials confirmed their support when former National Prime Minister Bill English visited Brussels early last year. Former Trade Minister Todd McClay later said he expected the NZ-European Union Free Trade Agreement to be formally launched after the European Commission and New Zealand both finalised their respective negotiating mandates.

Ardern has since said the Government will take a more consultative approach in future. In other spheres it is already doing this.

Certainly, many of the multiple reviews the Coalition Government and individual Cabinet Ministers have announced are long overdue. The prior National Government relied on immigration and surging house prices for a feel-good factor. But it neglected the downside.

The Coalition Government came to power pledging that “capitalism must regain its responsible, its human face”.

But change is not easy to orchestrate as Housing Minister Phil Twyford is finding with KiwiBuild, which will seriously undershoot its targets in the Government’s first term despite his intentions.

Since the mid 1980s, successive New Zealand Governments have broadly adhered to the Washington Consensus with a focus on fiscal policy discipline (with the avoidance of large fiscal deficits relative to GDP), redirection of public spending from indiscriminate subsidies, broadening the tax base, interest rates that are predominantly market driven, competitive exchange rates, trade liberalisation, liberalisation of foreign direct investment, privatisation of state-owned enterprises, deregulation and adherence to property rights.

Much of that platform is still in place — particularly Robertson’s focus on fiscal objectives.

But the

Government is also intent on a necessary revolution. To retain business support it must guard against excess.

There’s a lesson here for Ardern. As George Orwell cynically put it: “One makes the revolution to establish the dictatorship”.

The Coalition Government should be careful not to provoke a counterrevolution.