The ‘goldening rule’ that says the sale of the nation’s first gold coin is prohibited under a colonial constitution has been applied to a number of auctions in Australia and New Zealand.
In each case, the government has sought to halt the auction, saying it is contrary to the national interest and the constitutional system.
The rule is a cornerstone of Australia’s system of sovereign wealth funds, and was introduced in 1890 after a British colonial administration decided to auction off the country’s first coin.
A number of governments across the world have used the rule to stop auctions.
The New Zealand government’s decision to stop the auction of the first Australian gold coin in 2011 came after the then prime minister, John Key, proposed that it be used to pay for a new national flag.
The government later reversed the decision and the auction resumed.
Key told Parliament at the time that the rule had been “unjustly used” and “made the sale illegal”.
However, the New Zealand Supreme Court overturned Key’s decision in 2013.
The new rule is part of a broader effort to limit what the government can do with the gold that is minted in Australia’s Goldfields and the proceeds from those sales are deposited into the national account.