Monday, November 17, 2008

Ultimus inter pares* - part II

Reviews, committees, discussions, aims, aspirations, considerations, concepts, Commissions, working groups, taskforces, briefings, advisory groups...

Perhaps you shouldn't expect too much from an agreement that was patched together in a week. Attention to detail was obviously not a priority for an agreement which thought the formal name for ACT was "The ACT Party" (to be fair, this is listed as an acceptable abbreviation by the Electoral Commission, but the full name is ACT New Zealand).

Well, we didn't get too much. The document reads more like a set of aims for students sitting an NCEA Level 1 exam than the list of quid pro quos one might reasonably expect. The apple-pie statements start with the preamble, with the agreement "[r]ecognising that National and ACT have shared goals for a more prosperous and cohesive New Zealand driven by the initiative and hard work of individual New Zealanders". Now, who would have thought that?!

Turning to the details, it doesn't get much more specific than that. To ACT's credit, the National Party recognises the smaller's party's (and specifically, Roger Douglas's) ambition to see New Zealand catch up to Australia in "income standards" - with the 2025 date being a minor difference to ACT's 2020 proposal. Yet this is the sort of lofty goal that most people would agree with - and is something that cannot be measured within the government's likely term of office. Note that this is a smarter aim than Helen Clark's desire to see New Zealand in the top half of the OECD, because it uses a far-off date as its judging post.

In concrete terms, the 2025 pledge will see the "establishment of a high quality advisory group to investigate the reasons for the recent decline in New Zealand's productivity performance, identify superior institutions and policies in Australia and other more successful countries, and make credible recommendations on the steps needed to fulfil National's and ACT's aspirations". Doesn't ACT and National already have the advice it needs - in the form of ACT's policy proposals, including the "biggest pledge card"? To me, an advisory group reporting once a year sounds remarkably similar to Helen Clark's habit of sending uncomfortable matters off for a "review". We have the advisory group already - they will be sitting in those green seats in the government's side of the debating chamber.

We move on - to the establishment of a "Leadership Council", which seems to be short-hand for a policy of "no surprises", enabling "consultation" between National and ACT. The Leadership Council seems to be the distinguishing feature between the National-ACT agreement and National's agreement with the Maori Party. While this sounds like a very good idea, did anyone really expect that John Key and Rodney Hide - the participants in the Leadership Council - wouldn't talk to each other?

Then there are the "seven policy areas in which ACT requires progress to be made in the current term of Parliament":
  1. Law and order: ACT gets its "three strikes" bill introduced to Select Committee and a "fair hearing". But sorry, no guarantee of getting it passed.

  2. Climate change: a delay to the implementation of the Emissions Trading Scheme (ETS) and a review in a select commmittee. Not only does this not give in to ACT's campaign demands to drop the scheme altogether, the clause even sets out a path for ACT to approve the scheme: "[i]f a rigorous select committee inquiry establishes a credible case that New Zealanders would benefit from action by New Zealand, in conjunction with other countries that are important to us, ACT would be prepared to support legislation giving effect to such action." And if ACT doesn't support it, National will pass it anyway with the Maori Party.

    Hide pushed hard for an end to the ETS and the failure to have it removed shows ACT's reduced bargaining power with the involvement of the Maori Party. It's a question of language - it would have been a big win for ACT to say to its members that "we got the ETS dumped", even if something vaguely similar is eventually passed under a different name.

  3. Controlling Government Expenditure: finally something concrete. Hide will be a member of the Expenditure Control Committee. But the rest of the detail centres merely on a "series of Task Forces" to "undertake fundamental reviews of all base government spending in identified sectors, and to report findings progressively to the cabinet control expenditure committee and relevant ministers". I'm sure the Task Forces will do their job well, but what action will they take? Staffing costs are one of the largest costs, yet Key has already ruled out any reduction in the public service, only a capping in numbers, going against ACT policy that non-core departments should be closed down altogether.

  4. Tax: more apple pie time:
    National and ACT both recognise the importance of a broad-based, low-rate tax system for productivity and income growth. ACT favours a much flatter income tax scale, ideally a single rate of tax. National and ACT note that United Future favours reducing and aligning personal, trust and company taxes at a maximum rate of 30%. They agree that such a tax structure is a desirable medium-term goal.
    To clarify: ACT, a party which campaigned for a top rate of 15% by 2018/19, has signed up to a maximum 30% rate as a "medium-term goal" only. No policy wins here - and why is United Future used as a benchmark in this matter??!!!

  5. Regulation: Hide's vetoed Regulatory Responsibility Bill will be revived and sent to another "Taskforce" (this time we spell it as all one word), but again there is no guarantee of final National support. And a "New Zealand Productivity Commission" will be established. Will this share resources with Peter Dunne's (retained) Families Commission?

  6. Resource Management Act: obviously too serious to be left to a "Taskforce", this job is instead given to "high quality advisory group" which will advise on "short-term amendments". The RMA is probably the piece of legislation which National and ACT agree upon the most - but it's not clear what would happen with ACT's involvement that otherwise would not.

  7. Education: this time we have an "inter-party working group" to "consider and report on policy options relating to the funding and regulation of schools that will increase parental choice and school autonomy". Reports, considerations - but no concrete proposals.
Then there are the many areas of policy not covered under the agreement. For one, ACT has long pledged to repeal the Employment Relations Act 2001 as part of reducing barriers to hiring and firing- yet there is no mention of this in the agreement. Similarly, there is nothing in the agreement about ACT's hardline policies on social welfare, including its proposals on work-for-the-dole and "mentoring", items which would not be anthema to the Maori Party and thus quite possibly implementable.

Of course, ACT could not expect to have every policy area on which it has a view to be covered. But in the seven areas seen important to be listed in the confidence and supply agreement, there is next to nothing in terms of concrete support from National for an ACT policy. Effectively, ACT has signed away its support on matters of confidence and supply in return for merely agreements to talk on ACT's policies. This is represented by the many taskforces, advisory groups and committees proposed by the agreement.

Government is not a simple process and ACT may yet well end up with some of its policies put into practice. Furthermore, John Armstrong has pointed out that the process of discussions will allow ACT to be more visible in Parliamentary process, rather than "soon-forgotten policy gains". This may help to maintain ACT's relevance over the parliamentary term. But there is no guarantee for any of ACT's policies to be adopted, undiluted or otherwise, even after all the reviews. Reviews are the modern-day equivalent of fudging on an issue - putting off decisions you do not want to make to another day.
Meanwhile, ACT has signed away its support on confidence and supply for the National Party for comparatively little in return.

And meanwhile, fellow confidence and supply agreement signeee the Maori Party has already achieved a big policy win that it wanted - a defacto bipartisan agreement to retain the Maori seats .

ACT has spent the last 15 years discussing and reviewing its policy to death - now it needs to implement it. It already knows the specific points of what it wants. Driven by its ideology, ACT of all parties could have been expected to push for a few initial bottom lines to be adopted in return for its support. The details could have been sent to committee, by all means - but with ACT already having some achievements under its belt.

*"Last among equals"

Ultimus inter pares - part I

Minister of Local Government
Minister of Regulatory Reform
Associate Minister of Commerce


Minister of Consumer Affairs
Associate Minister of Defence
Associate Minister of Education


Reviews, committees, discussions, aims, aspirations, considerations, concepts, Commissions, working groups, taskforces, briefings


Roger Douglas


A great deal for the National Party.

Over the past week ACT has been successfully cornered by a cunning John Key. Overtly, Key has told New Zealand that the reason he wanted to draw in the Maori Party and United Future - even though their participation is technically unnecessary - is to build an "inclusive" government. But the announcement of National's confidence and supply arrangement with ACT demonstrated to me that ACT has been manhandled into accepting far less than it would have otherwise achieved.

I'll examine the ministerial posts first and ACT's policy wins in my next post. There are really just three main roles - the three main ministerial posts. Associate ministers are entirely subordinate to the main ministers. This leaves us with the three posts: Regulatory Reform and Local Government (Rodney Hide) and Consumer Affairs (Heather Roy). In the outgoing Labour-led government, the Local Government post was held by Nanaia Mahuta and the Consumer Affairs portfolio by Judith Tizard. Regulatory Reform is obviously a new portfolio created for Hide.

First, congratulations to ACT. For the first time in its history it will have ministers in government (but not Cabinet!). For a party which had hitherto spent virtually its entire existence in opposition and without any semblance of power, Sunday represented ACT's finest hour. The difference will be most noticeable for Rodney Hide, the remaining original ACT MP, whom television news report captions will no longer call "Perk-buster" (1997), "ACT Leader" (2004) or "Mr. Nice Guy" (2007), but "Minister of Local Government" or "Minister of Regulatory Reform".

Hide's portfolios tap into areas of ACT policy which have been favoured by him since he took over the leadership role. For the Regulatory Reform portfolio, this will involve his Regulatory Responsibility Bill which seeks to eliminate what ACT sees as unnecessary regulation. Much of the success in this portfolio will depend on exactly what sort of bill ends up being passed. The confidence and supply agreement states:

To reduce the red tape and regulatory interventions that are reducing investment and depriving New Zealanders of jobs, National and ACT agree that the government will establish a task force to carry forward work on the Regulatory Responsibility Bill considered by the Commerce Committee of Parliament in 2008. The membership of the Taskforce to be jointly agreed by National and ACT.

I expect the Local Government post will centre on another of Hide's vetoed pieces of legislation: the Local Government (Rating Cap) Amendment Bill (2006), which sought to hold local rates increases to the rate of inflation + 2%. If ACT manages to get this bill passed it would have a marked effect on local councils around the country, although this depends on how often the dispensation provision in the bill is used by Hide to permit higher rates increases.

The other main aim I can imagine of the Local Government position would be to encourage mergers of councils in order to cut costs and "bureaucrats" - I'm sure creating a single mega-Auckland council would be at the top of Hide's agenda, something which could be made easier by the fact that the ACT-friendly John Banks is already mayor of Auckland. All of this is conditional on Hide taking and being given enough time to put such proposals through. I have to say that I can recall little of what Nanaia Mahuta achieved in past three years.

I discussed Heather Roy's impending appointment to Minister of Consumer Affairs earlier in the week, which generated some debate here and elsewhere. Roy will obviously be taking a very different stance to Consumer Affairs ministers in a Labour-led government and it still seems a strange choice. Certainly, the absence of a requirement for country-of-origin labelling is beneficial to manufacturers, but how does it benefit consumers making purchasing decisions? You're better off not knowing where that tin of Chinese baked beans comes from? For most consumers, country-of-origin labelling would be an example of transparency (one of ACT's ideals), but it will be unlikely that Roy will see it in such a way.

The output of these ministerial posts will be available for all to see in due course, but the story for now is what ACT has not been given. Here are some questions which came to my mind:
  • For a party founded on economics, why is there not a sniff of the Finance portfolio? Regulatory Reform and Local Government are all very well and good, but they are peripheral to the main agenda. While it would have been unlikely for National to give up the purse strings entirely entirely, at least an associate role could have been in store - in the previous Labour-led government there were no fewer than three of these positions available. Or there could have been a 1996-style division of the Finance role, with Hide becoming Treasurer.

  • Why was Heather Roy not given the full defence ministership, given that she has military experience and her weekly e-newsletter shows a dedication to the armed forces unusual for New Zealand Members of Parliament? Is there really anyone better qualified in National to take the job? And why did she not get the role amended to reflect ACT's incorporation into a "National Security" portfolio?

  • For a party which claimed crime was the biggest election issue, why is there nothing about law and order in ACT's ministerial line up? There are plenty of possibilities! Minister of Justice, Minister of Police, Minister of Corrections, Minister for Courts. Associates? Anyone? Anyone? Ferris Bueller? Is it because ACT knows taking on one of these jobs means taking all the flak and none of the credit?

  • Just how much of its point of view will ACT manage to convey on education through Heather Roy when we already have at least one other Associate Minister - Pita Sharples, from the Maori Party? Does the dilution of power make the introduction education vouchers ("scholarships" in ACT parlance) unlikely?
Perhaps the best way of analysing the success of ACT's negotiations with National is to look at the Maori Party, which has by far overshadowed ACT's own deal, even though on election night we thought that it would merely be an add-on. While receiving the same number of ministerial positions, it has received some priceless jewels. Firstly, Pita Sharples becomes Minister of Maori Affairs - the representation of which is surely as much the raison d'ĂȘtre for it as economics are for ACT. Secondly, and even more significantly, the Maori Party has received a guarantee for the retention of the Maori seats, a concrete policy concession far weightier than anything won by ACT (I discuss its policy outcomes in the next post).

A simple but stark illustration of the division of power came in 3 News on Sunday evening, which played clips of Peter Dunne and Pita Sharples long before Hide, who was only allowed to explain (in the headmaster's presence) why there was no room for Roger Douglas in the new government. The bulletin then played its only other report - on the Maori Party arrangement, with lengthy speaking time for the new partners. Minutage on the 6pm news is of course hardly a scientific guide (and the channel erroneously headed Sunday's deals as "Coalition Agreement"), but if ACT blends into the furniture too much over the next three years, it will find it difficult to claim credit for the very proposals it introduces, as other small parties have discovered. That may be electorally painful in 2011.

Thursday, November 13, 2008

Consumer Affairs for Heather Roy

Courtesy of the Dominion-Post, we learn that ACT's deputy leader Heather Roy will be made Minister of Consumer Affairs. The paper asked Consumers' Insitute head Sue Chetwin for comment and as she used to be a journalist and editor of both major Sunday papers, her insights are certainly worth noting:
ACT itself is not strong on consumer issues in terms of country-of-origin labelling and some of the things we're interested in. But regulations around financial advisers and a lot of that stuff that's happening now, I think she'd be very good.
Chetwin's view is a balanced one. To a certain extent, ministers do get to craft their portfolios according to their interests and perhaps Roy will tackle financial advisers, as Chetwin suggests. But given ACT's laissez-faire views, it seems more likely to me that she will be keen not to engage in any regulations on country-of-origin labelling or anything else. Left mouthpiece The Standard says as much, albeit in its more colourful way.

But then, neither would a National minister likely to regulate on anything he or she didn't have to. We're not talking about the Green Party, after all. The more interesting point to note about Roy's impending appointment is that ACT has been palmed off with something fairly "cheap". The fact that Judith Tizard was given the job for the last three years emphasises this.

A cheap portfolio for Heather Roy suggests that the pay-off for Hide may be fairly substantial, or that negotiated policy gains are large. We should know exactly what has happened by the end of the weekend.

Coalition agreements

ACT will not be going into formal coalition with National. This is because ACT does not want to risk losing its independence from National and wants to be able to vote against the many aspects of National policy with which it disagrees. Instead, it will gain one or ministers outside Cabinet and negotiate some policy compromises with the National Party.

The near-absence of formal coalition agreements from New Zealand politics now seems to have become cemented. The 2005-2008 Progressive Party-Labour coalition may have been the last we will see. But why not have a formal coalition agreement? Germany, on whose model New Zealand's form of MMP is based, is still going strong with formal coalition agreements after 60 years. Indeed, the coalition agreement for the 2005 "Grand Coalition" between the main SPD and CDU/CSU parties could be purchased at booksellers in a mass-produced version for a few Euros shortly after its signing. Coalition agreements have also been in place even when the parties are more like-minded, such as between the SPD and Green parties.

Moreover, despite claims by ACT to the contrary, National and ACT are cut from the same cloth. In the last Parliament, National and ACT voted in different ways on just 15 bills of 110 in total - and most of these were on comparatively minor issues (e.g. the New Zealand Sign Language Bill). These differences could easily be set out in a coalition agreement for all to see. (N.B. the figure listed at the above link is higher, but that is because ACT did not bother to vote on a few dozen bills, which is a different matter).

Coalition agreements can take time to draw up - but they offer certainty and stability of what will be carried out. They set out the policy tradeoffs and necessary prerequisites so that there are no surprises later on. But even then, they are hardly exhaustive - look at the National-New Zealand First agreement of 1996 and the fiscal parameters accompanying it. While this agreement has been sneered at for trying to pin down every last detail, it hardly tries to do so. What it does is set down each side's bottom lines and forms guidelines for the operation of the coalition government.

The NZF-National agreement is regarded as a failure, but that doesn't mean every agreement needs to be a failure. ACT and National are more like-minded than NZF and National were, which could surely mean a shorter and succincter agreement. Specifically, it could address what would happen on ACT's bottom lines on crime, the Emissions Trading Scheme and cutting government spending. Without a formal coalition agreement, the tradeoffs would happen anyway, but in a much less open fashion and behind closed doors. And by staying outside a formal coalition, ACT - and United Future and possibly the Maori Party - get to accept the power without taking the responsibility for supporting a National-led government, because at any stage they can shove the "blame" back on to the Nats.

Aha, but drawing up coalition agreements "takes too long". Well, so it might. But why should forming a government be a rushed process and why should voters accept so little written records of the closed-door meetings? The fact that APEC is taking place in a week is of little consequence. I don't see the United States rushing ahead with the inauguration of Barack Obama, just so that he can replace George Bush, a so-called "lame-duck" president, at the summit. What should happen is that both Helen Clark, as caretaker Prime Minister, and John Key, as Prime Minister-elect, travel to the summit, as Winston Churchill did with Clement Attlee to the Potsdam Conference at the end of World War II (this happened because the British election results were not clear - eventually, of course, it resulted in a Churchill-led Conservative defeat).

Hide talks about wanting "policy gains" more than ministerial posts. Well, let's see the horse-trading on paper - in a formal coalition agreement.

Monday, November 10, 2008

Commerce portfolio for Hide?

Dene Mackenzie suggests in today's ODT that Rodney Hide may be made Minister of Commerce to conduct a review of legislation:

Mr Hide could become commerce minister, responsible for a review of regulation. He will not be given law and order or energy given Act's "three strikes and you are out" policy and his call to dump the "dopey emissions trading scam [scheme]".

This could also mean that ACT gets its Regulatory Responsibility Bill passed as one of its contributions to the new government.

The Herald reports that ACT is still keen to find a role for Douglas. But not at the price of stability - the newspaper quotes Hide as saying:
"The most important thing is to have a secure, stable government that provides security for New Zealand, and second, to have a good relationship between National and Act, as well as other parties."
Mackenzie also reports that ACT will be supportive rather than extractive of National, in the interests of providing stability. This is to be expected, but ACT will not want to blend into the furniture either.

The new world

In just four days we gained a US President-elect and an NZ Prime Minister-elect.

If Phil Goff succeeds Helen Clark as Labour leader as expected, for the first time since 1993 both of New Zealand's main parties will be headed by men.

And Sir Roger Douglas is back in Parliament.

Welcome to the new world.

First, let me offer congratulations to ACT for an impressive comeback. And congratulations to the 10 people who correctly predicted in this site's poll about a month ago that the party would gain a result in the 3-4% band. While ACT's number of MPs not a party record, this time around it will be gaining the one thing it has never experienced - power.

I want to get straight into the discussion about ACT's position in government. Having done much reading and talking to some observers, there seem to be two camps on what ACT will end up getting in a coalition or co-operation deal with National. The first camp puts forward that as ACT is delivering National the 5 seats to get it over the 61-seat line needed, ACT should be able to extract a fair amount. The second group, however, points out that ACT has boxed itself in to the right of National. There is only one option - support National in some form. ACT is not going to abstain or side with Labour. The only question is exactly what form this co-operation will take.

There are points for and against both camps. I think there is genuinely considerable goodwill from National towards ACT and there will not be a move out to shaft them. ACT is National's natural coalition partner. It is not an unknown quantity, as New Zealand First was in the 1996 coalition deal. As long as ACT can be controlled and portfolios assigned carefully, National will not worry about ACT embarassing its much larger partner.

Perhaps the second camp will have its position represented in the fact that John Key has ruled out Sir Roger Douglas becoming a minister. ACT's price for giving National unconditional support could be having to accept a different composition of portfolios than it might ideally want, rather than a reduced number. Another argument in favour of a reduced ACT influence is the strong possibility that National will give itself some breathing room by inking some sort of deal with the Maori Party. This arrangement will probably be a loose one, but it will remind ACT that it is not the only possible source of support available.

So, what could this mean in terms of portfolios? I think it is plausible that Rodney Hide will become Minister of Education. He had already revealed some weeks ago that he would be interested in the Associate role, but ACT's extra spurt on election day should give it a little extra. ACT does not share identical ideas with National on education - one difference that comes to mind is National's opposition to bulk funding. ACT is of course in favour of a voucher scheme, which I also doubt would find favour in National. However, there will always be differences like these and I'm sure they could be worked through into a common policy position.

So, one important ministerial post - and something else? I think 5 MPs does get ACT at least one other bauble, perhaps even two. I wonder whether Douglas will get the Associate Minister of Finance role. As far as I can tell, Key has been fairly shrewd in his remarks in ruling Douglas out as a "Cabinet" minister. Of course, there can be ministers outside Cabinet. However it would be a drawing a long bow to say that Douglas would get the main finance job, as Key would look somewhat duplictious. But by giving him the Associate's job, Key could reasonably make the claim that Douglas is not in charge, but will assist Bill English in sorting out the economic crisis.

Another option could be to also make Hide Deputy Prime Minister. But this would not be pleasing for Bill English, who fell into line behind Key and earlier Don Brash. Furthermore, I'm not sure whether Hide would even want the job. It carries status, but not a lot of real power and I'm sure he would far rather ACT had a financial role of some description.

And what about law and order? Perhaps Hide could become Minister of Justice, leaving Heather Roy to take the Associate education role (or given the omission of a finance position, perhaps even the full ministerial post). David Garrett is unlikely to be given any sort of formal post, given that he is a first-term novice, but perhaps he will be found a committee role. National and ACT are not dissimilar on their stances on crime by any means, so a co-operation here could be easier than in, say, education, where ACT is driven more strongly by its neoliberal philosophy.

Or the combination could be something completely different. But as a party founded on economic reform, I think ACT will above all want to immerse itself in the books and Douglas is hardly going to be content doing nothing. I will watch with interest.

Friday, November 7, 2008

That's it - for now

Unless there is an earth-shattering piece of news before midnight tonight, that concludes Douglas to Dancing's election campaign coverage. Of course I'll be back after election night to analyse and interpret ACT's fate.

My thanks to everyone who has offered constructive criticism and feedback on my posts.

LATEST - FINAL WORD ON THE POLLS: the Roy Morgan poll just out also puts ACT at 4% support of the party vote. ACT should be very disappointed if it gets anything less than 3%. Because newspaper polls today showed National at close to 50%, ACT could well prosper further, as National supporters decide that their party is in government and does not need their vote. While it should be noted that the Morgan poll put Labour up (at 34.5%) and National down (at 42%), minimal reporting of the poll will erode any galvanising effect on National support it could have. Five per cent for ACT now becomes a distinct possibility.

To finish, some ACT news links from this week for anyone who hasn't seen them:

Douglas has pet projects lined up
Sir Roger Douglas is promising to "do heaps" in Parliament even if it is from the back benches and has singled out primary school education as one of his first "projects".

Wang accuses opponent of dirty tactics

Former Act MP and Botany candidate Kenneth Wang is accusing his opponent, National MP Pansy Wong, of "dirty tactics" and having a "deliberate strategy to scare voters with the possibility of two Chinese MPs" - after the Electoral Commission decided on Monday not to uphold a complaint Mrs Wong had made against his campaign.

The difference a year makes...

Some highlights from the transcript of my interview with Rodney Hide, August 2007:
  • "I mean my view of Roger Douglas is, he's a great guy, but he's always bagged his own team, he's done that his entire life in politics, and so he's continued, he bagged ACT and me and Richard from the time we got to Parliament, so there's nothing new in that."

  • "So we've got to make ourselves relevant and new and also position ourselves better in an MMP environment, as compared with a tactical appendage to National"

  • "I think we have changed ACT totally, no longer a tactical appendage to the National Party, no longer an Opposition party, working with all the political parties"

  • "What I've found since 2005, and this was in a response to what members wanted, is I've presented myself as a warm guy, never attacks people, positive, Dancing with the Stars-type guy, I've never said a critical thing about an MP since, for over 12 months."

  • "So it was pretty cool actually, just being yourself, and not sort of trying to be Richard Prebble, or trying to be Roger Douglas, because they were our mentors, models, and I went dancing and I was just me! And hey presto, people didn't mind that, and it's so much easier just to be yourself, so I actually couldn't go back to the old style of doing things, even if I thought it was a winner."

  • "The next success I need are 5,000 new members and supporters. So I'm starting a programme, a project to actually get 5,000 new members and supporters and I do that by March. I believe if I do that I'll actually get to 2 or 3 per cent in the polls, in March. If I get 5,000 new members and supporters, I've got a great story to tell the punters that come to our conference in March."[There was no mention of the 5,000 target at the conference in March and ACT had not reached 2 or 3 per cent in opinion polls by that stage, although as we know, it has subsequently done so]

  • "Well it seems to me that we need 8 per cent of the vote, 6 to 8 per cent of the vote at the next election. I also need at that point to have everyone understanding that we're the free market party, so behind us has to be a good manifesto, and also one or two bottom lines, so that everyone is clear about what ACT's position is heading into a coalition discussion. If I get 6 to 8 per cent, the ACT party is then in a position, it may have a new name, who knows, is then in a position to say well we campaigned on this, we sit down with John Key, we tell him, “you want to be Prime Minister, here's the deal, no surprise”. [Seen in the light of today's Fairfax poll, a scenario which is actually not as far-fetched as it seemed at the time]

  • "But here's the thing that I want, I want to be able to say “it's really nice, see you later John”, he'll say “where're you going”, I'll say “I'm off to talk to Helen Clark, because she wants to be Prime Minister too”". [In light of ACT's new slogan "Strengthen the Nats. Party vote ACT", a scenario which now sounds ridiculous - but until 2008 this was Hide's strategy!]

  • "So what I'm trying to do is get ACT into a position where we have options, choice and here we are way over here with our policies if you like, compared to the other parties, but actually in the centre talking to them all about how to advance our cause and work with them, and that's why the significance of talking with the other parties is, and not bashing them up. So that's where we want to get." [ACT "in the centre"?!]

  • "So you'd be, let's imagine that you campaigned on the health issue, transparency, I don't know what the case is, you know “Health Transparency for Kiwis” or “Kiwis..”, you know whatever, something sexy and the Taxpayer Rights Bill, which is sexy, and you'd say, Rodney Hide, his job is, he's minister outside Cabinet for Taxpayer Rights." [We're still waiting for the sexy bit. Note that Hide's stated aim is now to be Associate Minister of Education, not Minister for "Taxpayer Rights"]

  • "And my goal on that is to have a good Select Committee process and to pass it and have the Labour Party vote for us [?], to pass it, because I know I put so much pressure on them, somehow, haven't quite figured out, that they went “shit, to win the next election we need to pass this bill, because business is hounding our case”. So the pressure will go on them before the election I'm hoping, from business groups fed up with red tape. That's a big win. And you're standing there in the election campaign and people are saying, “oh well, you know Rodney Hide, can't do this”, so hang on buddy, I'm the prick that won Epsom and you said I couldn't do it. I'm the prick that got the Regulatory Responsibility Bill and you said I couldn't do it." [The Regulatory Responsibility Bill has not been passed and Labour later withdrew its support]

  • "You think this election's going to be hard? Nah!"

The Guts of a Decent Slogan

TV3 has run a slogan competition via its election website. I've collated the ACT-related ones and grouped them into and anti- and pro-ACT categories (in some cases this is hard to tell!). The anti ones are first because there are more of them and they're much funnier.

  • Personal favourite: Vote for ACT: Rodney needs something to do between reality TV gigs.
  • We're going to party like its still 1979
  • action against Winston Peters backfired! but Rodney Hide still thinks he is right...YEAH RIGHT!
  • Personal favourite (this was submitted as applying to all parties; the bad grammar just adds to its "message") DON NOT VOTE IT JUST ENCOURAGES US TO LIE CHEAT AND STEAL YOUR MONEY
  • Colour choices tells a lot. Green is always GO; Yellow caution; we can handle spilled red, but could call a Code Blue.
  • Let us roger you with rodney.
  • Rodney Hide and Roger Douglas - Digging up our past to force feed us our future...
  • Hide-Hi? Ho-de-Ho!
  • Yellow is the new green
  • Act is the Key to the battle with Helengrad
  • I can dance, I can dance, if you give me a chance.
  • Vote for Rodney: ½ the violent criminals off the street ½ the tax ½ the leader he was ACT – Bringing us a healthier NZ.

The final chapter

Clearly, the new strategy has at least as many pitfalls as strengths. But as a party which recorded just 1.5 per cent of the party vote at the last election, ACT New Zealand has little to lose. Moreover, it is difficult to find fault with the party for attempting to address in a serious way the very problems I found to be causes of its past lack of success. Since the 2005 election, Hide has made comprehensive attempts to change ACT's policies, brand and to make the party matter to voters. Ultimately, only ACT's performance in the 2008 election will determine whether these attempts succeed in bringing the party out of the doldrums or will only mire it in further difficulty. Rodney Hide's ACT New Zealand is, after all, living dangerously.
The above (with emphasis added) was the concluding paragraph to my 2007 dissertation. Such is the danger of dealing with current events that much of my concluding chapter, which examined ACT's 2007 rebranding attempts, have since been superceded by a return by ACT to the hard-right. Gone is Rodney Hide, "Mr. Nice Guy". Gone is a refocusing on "positive" messages. Gone is a desire to work with all other parties, including Labour. Thinking of the dozens of hardline crime billboards currently dotting New Zealand, I can only chuckle at some of the commentary in the 2007 conclusion, despite being fully accurate at the time of writing:
...ACT appears to be more deemphasising its socially conservative stances. Buried deeper in publicity material published in 2007, one finds support from ACT for “law and order policies that protect our citizens and deal forcibly with thugs and bullies”. Hide may not be completely reversing ACT's socially conservative position, but he is certainly de-emphasising it in favour of a renewed economic focus.
I was always conscious that the hand-in date in October 2007 was never really going to be the end of the story and that one more election - at least - would be needed to see what would become of ACT. Would it remain the rump to which it had dwindled to by 2005? Or would it re-emerge in a phoenix-like rise from the ashes? We will have at least a preliminary answer to this tomorrow.

But this will still not be the end of the matter. If ACT does help to form the next government, it will begin to implement its personnel and its policy. How successful it is in this endeavour will be the next very real test. Both New Zealand First and the Alliance failed trying. United Future has not prospered electorally from being in government, neither has the Progressive Party.

"Success in opposition - failure in government" was the title of one academic paper I looked at last year. ACT has never really been successful in opposition - but it cannot afford not to be if it forms part of or cooperates with the next government.

Two, three, four or five?

No doubt many ACT supporters will have a spring in their step as they walk through Newmarket this morning, with the party reaching an impressive 4.0% in the final Fairfax poll out this morning. (For all poll details see Curiablog's summary).

But the other polls all show different results, with ACT winning two, three or four seats. Taking the average, I think this gets ACT a highly likely three seats, with a 50% chance of winning a fourth seat. The two or five seat options would remain outliers.

So Douglas becomes a backbencher.

In October, we had two Roy Morgan polls which gave ACT 3.5% of the party vote. Morgan polls have jumped around during the year for ACT and it pronounced several other "false dawns" earlier which put ACT at a relatively high level of support. I think the early October poll was another example of this, as its results were uncorroborated by other pollsters. The late October poll, however, may have reflected the beginnings of ACT's apparent upturn.

The upturn was not inevitable. There appear to have been two main catalysts for the change.

Firstly, as I reported earlier, there has been a focus on strategical or tactical voting in the last couple of weeks. On the left, voters have come to the conclusion that Labour will not be leading another government (note to Fairfax: New Zealand has governments, not "administrations") and have taken the liberty of shifting their support to the Greens. On the right, hard-right National supporters have realised that National has plenty of supporters and that shifting their vote to the right and to ACT will not hurt the final outcome.

The surge in support for smaller parties such as the Greens and ACT (and even New Zealand First, although not enough to make it count) is to be expected in a unexciting campaign in which one party is so clearly in front. Small parties should also be benefiting from the Labour-National consensus, as voters look for something different. But as Dr. Bryce Edwards has pointed out, small parties are "killing us with boredom, consensus and sameness". While ACT does offer a different policy programme to National, the focus in the last month on a hardline stance on crime has been neither inspiring nor innovative.

The second catalyst has come only in the last week and I think is responsible for most of the increase in support. It consists of the direct overtures made by John Key to ACT and his pledge that Rodney Hide will be a minister in government. It consists of a joint National-ACT coffee meeting. It consists of a photo of a smiling Key and Hide in a tabloid newspaper. As I have previously written, this gives what the party has long lacked - relevance. Voters know that if National forms the next government, ACT will have a minister as part of it. This realization - and the fact that voters are paying attention - is what has changed in the latter stages of the campaign.

Does this make sense for National? Yes and no. The endorsement seemed to have been already implicit and "priced in" by voters. National could always count on ACT's two votes. Moreover, with ACT having run such a right-wing campaign, ACT's surge in support can only have come from National supporters.

This means that ACT's support has simply come from support shifting amongst the bloc. While this is always what has happened with ACT and should not come as a surprise, the difference is that this time the support drift from National to ACT has been supported by the former. Such an explicit endorsement has never happened in a previous campaign.

So bad news for National? Any increased support for ACT would presumably give it more leverage in getting across its own agenda, as opposed to National. With five MPs, ACT would have some bargaining power and perhaps begin to drag National away from its pragmatic, "centrist" policy programme.

Presumably. Or maybe not. As a National Party insider told me, "where are they [ACT] going to go?" Just as the Greens are captive to Labour on the left, ACT is hostage to National on the right. National will have to and will give ACT a bone, but there's no need to add some Tux biscuits alongside, unless it happens to be something National would do anyway or something arcane which would not overly bother voters (the Regulatory Responsibility Bill comes to mind).

But for any of this, the votes will have to be won first.

Wednesday, November 5, 2008


This just in from the Herald:

Act leader Rodney Hide's indignation at the Electoral Finance Act is nothing but a jacket jack-up.

The complaint to the Electoral Commission about Mr Hide's canary-yellow jacket was made by an Act supporter.

It has been revealed the complainant is 21-year-old Andy Moore, a University of Canterbury commerce student and "strong Act supporter"....

Mr Hide today said he was embarrassed and pissed off at Mr Moore.

Was "pissed off" a direct quote?

From the front line

An Auckland-based contact e-mailed me the following thoughts on ACT:
On the ground, the feel for ACT is quite strange at the moment... ACT clearly gave the impression they are bigger than they are and are polling reasonably (well, around 3% was the ball park figure often given). What's amazing is how many ACT billboards there are around Auckland, particularly in Epsom. What's mental is that outside of Epsom, I think ACT has replaced every single former billboard they had a few weeks ago with new ones focusing on crime, etc....They've also been HEAVILY direct mailing and leafletting Epsom. This will be costing them a lot of money!

I get the impression that organisationally they're fucked. Apart from the obvious loss of a lot of their people to National (I guess their MPs must've been the tip of the iceberg), erstwhile radicals within the organisation like Blair Mulholland (a sometime critic of ACT and Hide and oft-switcher between ACT and the Nats) who is running Kenneth Wang's campaign in Botany. Mulholland, while a nice guy, is a total political loose cannon. I'm also told by friends of mine that the much vaunted return of Roger Douglas hasn't seen the influx of activists ACT would have liked.

Botany campaign

Dene Mackenzie has a background piece for the ODT online on the Botany electorate, in which ACT candidate Kenneth Wang is hoping to win the seat. This follows an earlier piece in the New Zealand Herald. Both articles highlight some apparently racist traits of non-Asian voters in the electorate. From the Herald:
[A voter], who wanted to be known only as Sandy, 24, said: "It's ridiculous that I receive flyers in my mailbox from the candidates in Chinese or whatever, and I am made to feel like I'm a foreigner in my homeland's election."

She said she was "really sick" of the "Chinese-style campaigns" and would give her vote "to any other candidates ... except the Chinese ones".
It's sad to see this view in 2008 and in this case it's startling, given that the opinion is from a comparatively younger voter who has likely grown up in an increasingly multi-ethnic Auckland. But it's a reminder of how progressive the United States is in comparison: where campaign materials are frequently provided in Spanish - I think Barack Obama even spoke in Spanish at one event.

I'm not sure how all this affects Wang's chances of winning the seat - given that the three highest-profile candidates (Wang, National candidate Pansy Wong and Labour candidate Koro Tawa) are all of a non-white background. But remember: National is known as New Zealand's conservative party for a reason. From Mackenzie's piece:
At Jacob's Cafe, only the staff were Asian as I settled down next to Glad and Allan Jamieson. They are both in their 80s and have lived in the village for most of their married life.

They are committed National voters and will be voting for Mrs Wong and giving National their party vote.

But even they are starting to feel a bit peeved about the wave of new immigrants and new housing.

ACT out of cash and out of time?

ACT has a reputation for being a party of the rich, a reputation which the party has often denied. There is some evidence for this, as I found out in my dissertation:
ACT's declared election spending decreased by over forty per cent over the elections from 1996 to 2005, although the decline was not uniform. In 1999, the figure dropped by sixty percent compared with 1996, to $657,889.14. Donations recovered to allow spending of $1,625,558.79 in 2002, but slumped again in 2005, when the party spent only $966,614.72 (Electoral Commission 2003). Furthermore, [then party president Catherine] Judd (2006) cited lack of financial and human resources as a reason for ACT's poor 2005 election performance.
The slump I wrote of then is relative: the million dollars spent still represent a very well funded campaign. But perhaps the 2008 situation is even more dire, with most high rolling donors continuing to throw their weight behind National with the hope of creating an outright majority. Of course, wealthy ACT loyalists have not disappeared: Alan Gibbs chipped in $100,000, likewise John Boscawen.

But are Gibbs and Boscawen the last men standing? Today, just 4 days out from the election, ACT sent out an urgent e-mail appeal to supporters begging for contributions. ACT itself admits that it is "strapped for cash". The appeal is pretty blunt:
And all these campaigning activities cost money. Money to pay for phone calls, paper, photocopy cartridges, rent, power and light….. you get the idea, and the message! So we are knocking on your door right now.
If you didn't know this came from ACT, you might think it was a message from the Green Party or RAM. If ACT is begging for money from its more modest contributors to pay for photocopy cartridges just days out from election day, things must be in a bad way.

This highlights the perennial dilemma of ACT's organisational structure, as I investigated in my research last year. At its inception in the mid-1990s, it started a network of electorate organisations and enjoyed some real grass roots fervour. But as the party tasted electoral success, it lost interest in cultivating the local organisations, finding it could finance itself very nicely out of a few wealthy corporate and private donors. As a analogy, ACT preferred to function as a private company, rather than a listed one beholden to thousands of small "shareholders". Not needed for their money, small supporters of ACT were displaced, with many drifting away.

Now, ACT seems to be in a fix, with the wealthy corporate and private donors having shifted their power behind National. ACT, never having built a durable grass-roots support base, is having to scramble to contact its small band of members and supporters for small change - not to cover anything exceptional, like the hire of an election jet, but just to cover basic office supplies.

Monday, November 3, 2008

Why crime no longer pays

I watched last week's TVNZ's small party leaders' debate and a Rodney Hide interview with John Campbell and came away with some developed thoughts on ACT's hardline stance on crime. I had planned to do a blog post on it last week but it slipped my mind until I heard an account of a Dunedin North local candidates meeting. Let me elaborate:

In his interview with Campbell, Hide admitted that ACT had had problems with the economy in election campaigns in the past, with people "jogging past" economy-related billboards. Hide said that this had changed this election, but I doubt this is really the case. ACT has never had a more accommodating election in terms of theme - this is the first election year since its founding that NZ has been in a technical recession - yet its economic message has failed to sell. If voters had decided that ACT had all the answers for the crisis, the party would be polling closer to the 9% mark, not the 1.9% Curiablog's poll of polls currently has it on.

A month or two ago, ACT itself realised that its economic message alone was once again unsaleable to most voters and switched to its perennial Ersatz issue - a hardline stance on crime. Locking up individual offenders has always married well with ACT's doctrine of "personal responsibility". It worked particularly well for ACT in 2002, during the economic "good times", when it managed to increase its share of the party vote slightly to retain a 7% share. A pure economic stance in 2002 might have seen the party wiped out, or driven down to its 2005 rump level, three years early.

But the "Zero Tolerance for Crime", "three strikes and you're out (in)" message may have reached saturation point. Since ACT turned to the familiar drum, there has been no sudden surge in support for the party, as in 2002. I found it revealing that in the crime question on the TVNZ debate, ACT was the only one to advocate the familiar tough stance on criminals. In elections past, it could have expected to have been joined by National (especially in 2005) and New Zealand First. But in 2008, the rhetoric has shifted to tackling the "root causes" of the problem - as Jeanette Fitzsimons pointed out. Rodney Hide professed to agree with Tariana Turia when she said that the best way of stopping young offenders was to give them jobs - yet why didn't he say that himself?

As I said, this slipped my mind until I heard an account of a local candidates meeting in the Dunedin North electorate, which took place last night. When asked by the moderator what the solution to young people getting into trouble was, all the candidates agreed that root causes needed to be addressed. Except one - sixth-placed ACT list candidate Hilary Calvert, who took the simplistic ACT stance of taking a hard-line early on.

Perhaps there has been a shift in public opinion on crime. For years, right-wing politicians, including ACT ones, have advocated only tougher sentences as a way to deal with criminals. A bidding war of some sorts has already taken place. The result?
  • Criminals are already treated more harshly than before. 20+ year prison sentences for murder are now commonplace and judges have discretion over non-parole periods - in the 1990s, by contrast, a life-sentence was a fixed 15 years and judges had so little say that sentencing always took place immediately after the verdict was given.

  • Several new prisons have been built and we are locking up more people than ever before and in new ways such as home detention (which, by the way, is not primarily used as a "soft option" to real gaols but to give judges a real choice over non-custodial sentence which would normally have to be imposed for lesser offences). These are just some examples of the tougher stance on crime that I have to hand - I'm sure a legal observer would have many more.

  • Despite all these measures, violent crime is still increasing
New Zealand has tried locking more people up and has ended up with one of the highest imprisonment rates per capita in the world. Sentences are tougher than ever before. But this has not led to a reduction in the violent crime rate. This being the case, politicians - and voters - have turned against simplistic solutions with clever slogans. Locking up violent offenders is merely the cliched "ambulance at the bottom of the cliff". Voters are now looking for something more than chaining up the individual offenders.

As Fitzsimons and Turia realise, the only realistic way to solve crime is by tackling the original societal causes of crime - which I think most would agree would include poverty, lack of opportunity and lack of hope. And much of the preventable violent crime (gang and street offending) takes place in one area particularly afflicted by those scourges - South Auckland.

Strategic voting and ACT

It's the final week of a fairly lacklustre election campaign by all parties concerned. But if ACT does manage to gain an extra MP or two, it may well be due to "strategic voting" taking place. I take strategic voting to mean voting for a party for a reason other than, or in healthy addition to, agreement with its policy. I've previously argued that ACT should give up trying to convince voters to become neo-liberals and gain supporters for pure tactical reasons. Earlier in the campaign, we saw ACT reintroduce the tired, but sometimes profitable tough-on-crime stance. Perhaps precisely because of its tiredness, this has failed to capture anyone's imagination (more on that in my next post).

In recent days we've seen some evidence of strategic voting entering the debate, which is to be expected in an election with one major party 10-15 points ahead of the other. As in 2002, some voters will see this as a sign that they have carte blanche to abandon the big two and choose something a little more interesting. Last week, we had an article in the Sunday Star-Times in which it was suggested that Labour voters should choose New Zealand First instead, so as to ensure NZF retains its representation in Parliament and remains a potential coalition partner. Then in yesterday's Herald on Sunday Matt McCarten, who I think writes one of the most astute political columns in the country, shrewdly makes very logical cases as to why Labour voters should vote Green and Progressive voters should vote Labour.

But more relevant have been the comments made to ACT-leaning voters by John Key in recent days. It's important to note that these are not off-the-cuff remarks, even if they may sound like them. Comments on coalition strategy is the gold dust of any election campaign under proportional representation, because without it voters are essentially blindfolded. Here is what Key said to the Herald on Sunday:

You don't live in Helensville. Your electorate vote is in Epsom - Richard Worth or Rodney Hide?

I'm voting two ticks for National.

So presumably you'll be advising all other National voters in Epsom to do the same? To give their electorate vote to Richard Worth?

We're running a party vote campaign around the country. It's no secret that we have a good relationship with Act. Obviously we'd encourage anybody to give two ticks to National, but we acknowledge that there will be people who split their vote in Epsom.

    • And previously, as pointed to at Kiwiblog, Key told TV3 last week that Hide would be a minister in a National-led government. Here are his exact words: There's been talks with us and ACT and I'm pretty confident that we can put together a government, Rodney Hide will be part of that government and be a minister in that government

    So in the final throes of the campaign, National has clearly decided that it would be beneficial to throw ACT a bone. This is without precedent. There has not been a single previous election campaign in which National has treated ACT as anything like an absolute rival in a zero-sum game. Even when ACT was at severe risk of oblivion, in 2005, no lifeline was offered to the small party. (Remember the brush-off Hide received from Don Brash at his coffee-break with United Future's Peter Dunne?). The implications of this are three-fold:

    • Firstly, ACT has finally gained unquestionable relevance, used in a technical sense. Voters now know that ACT will be a part of a National-led government - perhaps even if National gains an outright majority (now only an outside possibility). Note that Key says "will", not "would" and that he even says that talks have gone on between National and ACT. I'd love to know on what level these talks have been conducted. Was it a personal discussion between Key and Hide? Or does "talks with ACT" imply that it was a wider discussion at a party level - both with Hide and other figures in the party hierarchy (such as ACT president Garry Mallett)? Either way, it shows ACT to be a "player", not the irrelevant spoiler it was in elections past. Voters should favour a party that matters to the final result.

    • Secondly, by only talking about Hide, Key would seem to have implicitly ruled out Sir Roger Douglas being in cabinet. This seems logical: with only 2 or 3 MPs, ACT could hardly expect to have more than one ministerial post. Having reentered Parliament on the back of Hide's electorate seat, Douglas would hardly be in a position to occupy this one post (nor would it interest him, unless it was the Finance Minister's role, which we know is safely out of ACT's reach and in the hands of Bill English). This may mute any assertions by Labour in final days that voters should fear Roger Douglas becoming Minister of Finance.

    • This last comment notwithstanding, with a definite National-ACT constellation in prospect, Labour has a real chance of putting forward a genuine fear campaign of a National-ACT government, much in the way Barack Obama has sought to link John McCain with George Bush in the US presidential election campaign. I can seriously imagine newspaper ads running on Friday with a reminder of Douglas's responsibility for asset sales in the 1980s with the question "Do you want this man back in government?". Labour would, of course, actually be fool to do this, because by drawing attention to ACT it would almost ensure an improved result on Saturday. But desperate times call for desperate measures - and Clark has already begun to link ACT with National, most notably last week in the "five-headed monster"
    Key's confidence in Hide becoming a minister makes it sound almost as if a draft coalition agreement has already been agreed upon. Note that Hide has previously said he would like to be Associate Minister of Education, which as a non-finance post (and with associate ministers always being subordinate to ministers) would seem to be an easy price for Key to pay. So Hide will be a minister, which leaves voters with no doubt that ACT is in tune and has made reasonable demands of National. If Key's comfortable with it, why shouldn't voters on National's right be?

    Hat tip: to Kiwiblog for as always leading me to the articles above