Summarised by Centrist
Policy instability is becoming a serious threat to New Zealand’s long-term prosperity, argues New Zealand Initiative chair Roger Partridge.
Partridge warns that repeated U-turns on major regulations are eroding investor confidence and fuelling a homegrown version of sovereign risk – not through debt defaults or nationalisation, but via policy reversals, judicial activism, and weak protections for long-term projects.
“Even ministers now recognise that policy unpredictability has become a genuine investment risk,” Partridge writes. “A New Zealand minister is contemplating taxpayer-funded insurance to compensate companies against … the decisions of future New Zealand Governments.”
While the current coalition has moved to restore confidence by repealing Labour’s resource laws, creating a Ministry of Regulation, and backing property rights, Partridge says mixed signals remain.
Nicola Willis’s comments about potentially breaking up supermarket duopolies, and the sudden MBIE review of Auckland Airport’s $6.6b upgrade plan, have not helped.
“If large, long-term infrastructure investments can suddenly find their regulatory environment reopened, what certainty does any project have?” Partridge asks.
He lists the offshore oil and gas exploration ban in 2018 as a turning point: “announced without consultation, [it] upended a sector built on long investment horizons.”
That decision led companies to quietly withdraw from New Zealand, re-routing capital to more stable jurisdictions.
He warns that New Zealand’s broader regulatory credibility is now on the line: “New Zealand’s prosperity was built on a reputation for good governance, secure property rights, fiscal prudence, and regulatory stability. That reputation remains an invaluable national asset – but it is not immune to erosion.”
“What matters most is not stasis, but discipline: recognising that how policies are changed can matter as much as what policies are changed,” he argues.
Read more over at The NZ Herald (paywalled)
