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20 July 2007 (#297)
A Weekly Report from the Keyboard of Murray McCully National MP for East Coast Bays.

The Therapeutic Goods Saga – the Cock-up of the Century

How could she have done it? How could any Minister have managed to snatch such ignominious defeat from the jaws of certain victory? Just how did Annette King manage to ensure that there was no majority in the New Zealand Parliament for what was not just a trade measure, but a trans-Tasman CER trade measure at that?

The answer is simple: Annette King is really, really arrogant. And at the sharp end of politics, really serious arrogance, mixed with a solid dose of real stupidity, can yield some very unfortunate consequences.

The trans-Tasman Therapeutic Goods (TTTG) regime was designed to have a single Australasian regulator for everything from pharmaceuticals, to blood products to complementary medicines. The problem was that the heavy-duty regime proposed, would have very heavy up-front costs for the players in the market. For pharmaceutical manufacturers planning to have access to a 20 million person trans-Tasman market, that was fine. But imposing those same costs on small domestic suppliers of complementary medicines was going to be crippling, even terminal.
None of the above concerned then Health Minister Annette King. Back in 2002 she signed a trans-Tasman Treaty. That Treaty obliged New Zealand to pass legislation to impose the new regime in this country. But King never bothered to discuss that commitment with the parties who would have to pass that regime into law.

All Treaties must go before a Parliamentary select committee for examination. And when the TTTGA went before a select committee in 2003, the majority of the committee rejected it. A slew of minority reports stated the varying reasons for that rejection. Any mildly prudent Minister would have considered themselves on notice that they had some work to do. But not King.

Almost all trade treaties are supported by both major political parties. All CER arrangements are the subject of bi-partisan support. For either major political party to have the other state opposition to a proposed trade agreement, should spark the loudest of warning bells. But in this case, the space where those warning bells should have been heard appears not to be occupied by very much brain matter.

Concerned at the outcome of the select committee report, Helen Clark asked for a meeting with then Leader of the National Party Don Brash and invited her Ministers to state their case. On 7 July 2004 Dr Brash wrote to the Prime Minister in response, restating the concerns outlined in the National Party’s minority report to the select committee, but promising that “I am prepared to recommend to my caucus colleagues that we work towards supporting the proposal in principle, provided we can see changes made which will accommodate the reasonable concerns we have raised.” Further, he warned, the National Party was only prepared to accept its responsibility to advance the matter “if there is a significantly greater level of consultation by your Minister of my relevant colleagues.” And nothing happened.

Almost two years later, the humble Member for East Coast Bays, then National Party spokesperson on Trade, became alarmed that nothing was being done to pursue the course proposed by Dr Brash. Yet every other trade negotiation was the subject of quite satisfactory consultation, and therefore bi-partisan support. Just what had gone wrong here?

On 12 May 2006, after several verbal expressions of concern, he wrote to Trade Minister Goff to reiterate “the willingness of the National Party to enter into discussions on the matter”. The National Party, he said had “been able to support trade proposals being advanced by the Government. That is why I want to signal our opposition to the TTTG regime while there is still time for discussion.” The concerns expressed by the National Party were “genuinely and sincerely held” because the regime, in its proposed form, would have “the most serious consequences for many New Zealand businesses.” The National Party would not support the TTTG regime in its current form, but would “remain ready to discuss any proposals you have to address the concerns we have outlined.” But Mr Goff simply responded that this was Mrs King’s project, not his. She would need to lead any negotiations. And she didn’t.

Fourteen months later, nothing has changed. No attempt has been made by King to achieve meaningful engagement. No proposals have been put to the National Party to allay concerns about the position of complementary medicines. At the very last minute, an alleged NZ First amendment was trumpeted in the media as a solution to the issue of complementaries. From media reports it appears ineffective anyway. But neither King nor New Zealand First has even given the National Party the courtesy of a copy of the proposal, much less engaged in consultation.

Worse, all of this time King was leading the Australians up the proverbial garden path. Had she simply fronted up and told them she had an overwhelming Parliamentary majority for the proposed regime, provided complementary medicines came out, the Australians would have worked around it. The vast majority of Parliamentarians on both sides accept that complementary medicines need to be regulated – just not by the same heavy-duty, expensive regime as proposed for pharmaceuticals. But by the time King fessed up, it was too late to address the problem. Australian elections are due within months. And the Australian Government has more pressing matters to attend to than fixing up Mrs King’s cock-ups.

So now the Bill is parked. A lasting Parliamentary monument to the proposition that arrogance and dim-wittedness are, when mixed, a dangerous political cocktail. And a clear reminder for the Prime Minister that one A King of Wellington needs some simpler, less challenging tasks to be handed her way in the coming September re-shuffle.

This report is available weekly on my website at www.mccully.co.nz  as well as being e-mailed each Friday.  To subscribe, unsubscribe, or change your e-mail address on the mailing list, please e-mail murray.mccully@xtra.co.nz
For more information on National visit www.national.org.nz
To join the conversation with John Key visit www.johnkey.co.nz

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