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Dr Muriel Newman

Citizens Initiated Referendum

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Switzerland_direct_democracyNew Zealanders will soon get a chance to participate in the Citizens Initiated Referendum on asset sales. The referendum is required under law after the promoters (Grey Power, the Green Party, the Council of Trade Unions, the Labour Party, New Zealand Union of Students’ Associations, and Greenpeace) secured sufficient signatures in a petition to Parliament this year.

The referendum will ask: “Do you support the Government selling up to 49% of Meridian Energy, Mighty River Power, Genesis Power, Solid Energy and Air New Zealand?” It will take place by postal ballot, between November 22 and December 13.

Those in favour of asset sales will vote “Yes” on the basis that selling 49 percent of state-owned enterprises will free up capital for other priorities – without the need for further borrowing – while still leaving the government with a controlling interest. The sale will provide sound investment opportunities for New Zealanders and impose private sector disciplines on government businesses (through the minority public shareholding) that will improve performance and deliver better services at lower prices.

In addition, because the Labour Party made asset sales a 2011 election issue, Prime Minister John Key is adamant that the majority vote the National Party received at the ballot box amounted to de-facto support for the asset sales programme, giving him the public mandate to proceed.

Those who are opposed to asset sales will vote “No” on the basis that taxpayer assets should not be sold – and that those operating in strategic areas, like power generation, should stay in government hands.

Timing has worked against the petitioners, with 49 percent of Mighty River Power and Meridian Energy already sold. This may have a negative impact on the referendum turnout and result as people quite rightly conclude that the referendum is a political stunt, given the assets sales programme is already well under way. But the biggest disincentive to voting is more likely to be the fact that a citizens-initiated referendum result is not binding on the government.

A recent public opinion poll of 750 people commissioned by the Herald echoed this view with only 18 percent of respondents saying that such referenda were worthwhile. Twenty-eight percent said they were a waste of money (the present referendum is expected to cost in the region of $9 million). However, there was strong support for making citizens-initiated referendum results binding on the Government, with 44.3 percent in favour of binding referenda.[1]

Citizens Initiated Referenda have been in place in New Zealand since 1993, when Parliament passed the legislation to allow for this Kiwi version of direct democracy. After the Muldoon era and the reform years of the 4th Labour Government, there was a growing sense of public unease that politicians were ignoring the people. As a result, in the run up to the 1990 general election, the National Party promised to introduce a system of non-binding referenda. The Minister responsible for the Citizens Initiated Referenda Act, Sir Douglas Graham, is on record as saying, “the intention is to review the use of citizens-initiated referenda after a period of 5 years, and it may well be then appropriate to consider a change to the law to make referenda binding at that time”.[2]

That review never took place.

Under the Citizens Initiated Referenda Act, all proposals must be submitted to Parliament’s Clerk for approval. Once the green light is given, petitioners have 12 months to gain the support of 10 percent of registered voters (currently, that means around 310,000 signatures). While there is a strict limit on advertising spending – the cap is $50,000 – the law is silent on payments to collectors. That led the Green Party to spend a significant amount of taxpayers’ money – through its parliamentary funding – on paying people to collect signatures for the petition.

Since the Act was passed in 1993, 46 referendum proposals have been approved by Parliament, but only 5 have been successful in gaining the support of 10 percent of the population – the rest either lapsed or were withdrawn. This shows that the barrier for success in New Zealand is set at a very high level – much higher than in other countries.

The five successful petitions that led to nation-wide referenda, were the 1995 proposal by the fire fighters’ union for the number of professional fire fighters not to be reduced, the 1999 proposals by Margaret Robertson for the number of MPs to be reduced to 99 and by Norm Withers for serious violent offenders to be given hard labour, and the 2009 proposal by Sheryl Savill to overturn Green Party MP Sue Bradford’s ban on smacking. In spite of the last four referenda receiving overwhelming public support, the governments of the day chose to ignore them.

While critics of citizens initiated referenda say that they are a waste of time, because they are not binding, the reality is that since the Legislative Council – New Zealand’s Upper House of Parliament – was abolished in 1950, New Zealanders have had no democratic checks on their government other than the three-yearly general election. May be it’s time for direct democracy to play a more important role in giving citizens a say in how our country is being run.

Direct democracy is not a new idea. It had its origins in Ancient Greece around 500 BC, where the citizens of Athens gathered together to vote on important matters of state. Switzerland used its own version of direct democracy as far back as the 14th century, when farmers formed assemblies – not unlike those in ancient Athens – in which they made laws. By 1848, their system had become formalised into a regular part of national and local governance.

Direct democracy enables Swiss voters to influence government policies at every level and is said to be a key reason for Switzerland having one of the highest standards of living in the world with high incomes and low taxes. Furthermore, the Swiss style of government is very effective in limiting the influence of politically powerful minority pressure groups, by weighing up their demands against the costs to society as a whole – something many would argue is urgently needed in New Zealand!

This week’s Guest Commentator is the Ambassador of Switzerland, Dr Marion Weichelt. In her article Switzerland – where the people co-govern via referenda and popular initiatives, Dr Weichelt explains how the Swiss system ensures that citizens get much more of a say in how their country is being governed.

“In Switzerland, the people have extensive decision-making power. As in New Zealand, Swiss nationals elect the members of parliament and just as in New Zealand, everyone is entitled to address written requests, suggestions and complaints to the authorities. But in Switzerland, citizens get more of a say.

“In binding referenda people can voice their disagreement. Federal legislation, decisions of parliament and certain international treaties are subject to an optional referendum. In this case, a popular ballot is held if 50,000 citizens so request. The signatures must be collected within 100 days of publication of the new legislation. Mandatory referenda are required for all amendments to the constitution and proposals for membership of specific international organisations. This means that a popular vote must always be held, the people must be consulted on these matters and their decision must be respected.

“The referendum acts like a veto. It delays and safeguards the political process by blocking amendments adopted by parliament or the government. The referendum is therefore often described as a brake applied by the people.

“But Swiss citizens can not only block decisions. Swiss citizens also have the right to make laws. In popular initiatives citizens present a precisely formulated text, or, if they prefer, a general proposal which parliament or government write out. For such an initiative to come about, the signatures of 100,000 voters who support the proposal must be collected within 18 months. Popular initiatives do not originate from parliament or government, but from the people. They act as the driving force behind direct democracy.”

Probably the most well-known recent Swiss referendum was the 2008 vote against the construction of minarets in the country, which was passed by 57.5 percent to 42.5 percent. But each year a variety of referenda on a wide range of subjects are held. Eleven referenda will have been held by the end of this year, including a move to abolish compulsory military service, which was rejected by a wide margin with 26.8 percent in favour of abolition and 73 precent opposed. Last year, 12 referenda were held, including a proposal to increase the holiday entitlements of workers from 4 weeks a year to 6 weeks, which was defeated by a two to one margin.

Direct democracy also has a long history in the United States, emerging in the 1600s through town hall meetings in the north eastern New England Colonies. In the 1700s, while States began adopting measures to enable citizens to directly approve constitutional changes, it wasn’t until the late 1800s and early 1900s that the concept was expanded to general legislation. Nowadays, 27 states have given their citizens the power to propose and oppose legislation through the use of direct initiatives and popular referenda.

In the US a direct initiative is a law change proposed by citizens and placed on the State Ballot to be voted on at the next scheduled election. The process requires citizens to collect sufficient signatures in support of the initiative within a given timeframe. The number of signatures depends on the State, and can range from around 3 percent to 15 percent of the number of votes cast in the last election for Governor. Once on the ballot, the initiative will pass into law – if it gains the support of a majority of voters at the election.

The popular referendum or people’s veto enables citizens to repeal new laws within 90 days of their being passed by the legislature – and before they come into force. The process is similar to that for a direct initiative, with the law going onto the Ballot to be approved or opposed by the citizens at large in a referendum. Again, the result is binding.

According to the Californian- based Initiative and Referendum Institute, in the US elections in November 2012, there were 174 propositions in 38 states that voters were asked to consider, including 42 initiatives, 12 referenda, 117 legislative measures, and 3 votes on constitutional conventions.[3]

An extremely wide range of issues are also dealt with through the public referendum process in the US, with many placed on the ballot by State legislatures. Oklahoma voters for example approved a legislatively-referred constitutional amendment to prohibit discrimination or preferential treatment based on race, sex, ethnicity, and national origin – by a 59 percent to 41 percent margin. The measure was intended to undercut many of the affirmative action programs that operated in the state and was designed to implement a colour blind approach to race, similar to measures passed in Arizona, California, Michigan, Nebraska, and Washington.

Other referendum issues dealt with in 2012 include the death penalty, same sex marriage, assisted suicide, the legalisation of marijuana, performance pay for teachers, hunting and fishing rights, a prohibition on trade unions and government contractors from contributing to political campaigns, and the public authorisation of state bonds.

In essence, direct democracy is based on the fundamental notion that in a healthy democracy, citizens can be trusted to responsibly participate in the country’s decision-making and governance processes – strengthening democracy and leading to improved outcomes for the country as a whole. Through our Citizens Initiated Referenda Act, New Zealand has already taken a step towards direct democracy. Making referenda binding on the government would complete the journey.



Should Citizens Initiated Referenda in New Zealand be binding on the government?


Click HERE to see all NZCPR poll results



1. Herald, Ballot won’t stop asset sales – PM
2. Larry Baldock, The Challenge of Citizens Initiated Referenda
3. Initiative & Referendum Institute, Ballotwatch