Monday 22 March 2010

The depressing state of New Zealand politics

I really shouldn't be disappointed when politicians act in accordance with theory.

Public choice says that politicians are self interested and want to be re-elected. In an MMP system, that means that the big centre-right or centre-left party has to cobble together a coalition supported by 50%+1. We usually expect the minimum connected winning coalition - the smallest grouping of parties adjacent to each other in left-right space - to emerge. In 2008, Key put together a larger coalition than that, mostly, it seems, to give himself flexibility to ignore ACT, who might sometimes recommend that policies enacted by Helen Clark be rescinded. Even absent that kind of larger coalition, ACT is largely toothless: they know they won't go into coalition with anyone but National, National knows it, ACT knows National knows it and so on. So they have no bargaining power in coalition formation: they're promised productivity task forces that are promptly ignored and so on. ACT can't even get National to support a bill reversing a Labour-Green policy that National opposed when Labour enacted it and that National might reasonably have been expected to reverse in office.

If Key wants to maximize his chances of being Prime Minister after the next election, and ACT would neither bring down a National government nor go into coalition with Labour, then it's hard to fault his strategy. The polling wouldn't be good on changes to minimum wages as most folks don't understand economics; if the policy were enacted, more youth would blame National for small wage decreases than would credit National for getting jobs. So there's little political gain in dropping the youth minimum wage regardless of the economic case for it: no votes to be gained, and ACT doesn't much need appeasing.

I don't know how long ACT can survive as this kind of rump. Not many folks can point to any particular ACT achievements in government other than getting to take the blame for Auckland's amalgamation. Yeah, they're getting a productivity commission (after a productivity task force report was sent to the shredder, unread); yeah, they might eventually get a regulatory responsibility bill (which I'm now having a much harder time imagining both having the teeth to do anything useful AND being supported by Key: looks more like pick one or the other). And maybe they've behind the scenes stopped some really stupid policies; I'd believe it, but that's not the kind of thing they can campaign on. There seems little chance of ACT pulling above the 5% threshold for Parliamentary representation; Hide's seat in Epsom serves as lifeboat.

And, I don't think that just coming up with nifty new economic policies will push ACT over 5%; the problem more is in making credible that their policies ever would be enacted by a coalition. If ACT can't even get National to agree to go back to the status quo as of January 2008 on the youth minimum wage, why should we ever expect them to extract anything substantial from National? They're the dependable rump on the right, easily ignored, who'd never vote with Labour so why worry? It's the centrist parties that profit from bidding wars between the centre-right and centre-left. ACT has been up a bit lately in the polls, pulling from National's right tail. But those right wing voters have more influence staying in National and moving National's policy position than they have by increasing ACT's vote share. The policy position chosen by National at convention will be the median of its members, mediated a bit by a pull to centre. The more voters shift from National to ACT, the further left is the median National voter; as ACT won't credibly go anywhere else, it doesn't much move coalition policy. This of course will limit the number of voters ACT can draw from National's tail.

But ACT could have more serious influence on policy. Folks forget that a truly liberal party, in the European sense of the word, and which ACT has claimed to be, isn't a right wing party: it's to the right on economics and to the left on social issues. But ACT's forgotten the other side. It's time they remembered it.

Key can afford to ignore ACT because there's no chance of ACT going elsewhere after the 2011 election, if it returns in 2011. This has to change. And perhaps the best way of making that happen is for ACT to stop talking about economics and start talking about the parts of a liberal platform where they could make common cause with the Greens and the socially liberal side of Labour.

The Law Commission released a report arguing that New Zealand's laws on marijuana needed revision; Simon Power immediately ruled out any changes in drug policy. When a liberal party could have been jumping up and down with the Greens trying for a liberalization of our drug laws, I didn't hear anything from ACT, probably because caucus isn't as liberal as ACT's banner. Where has ACT been on the internet filter? On the use of asset forfeiture legislation? On copyright reform? They may well have policies on all of these (and, on asset forfeiture, the wrong one), but they've not been priorities. Instead, I only see them on economic issues that increasingly seem doomed and on Tiebout-competition-destroying and subsidiarity-ignoring city amalgamations.

Imagine that after the 2011 elections neither Labour nor National has enough votes to go it alone. Labour plus the Greens plus Maori plus ACT could form government; National could do it with ACT or Maori. That's not implausible. ACT puts out a slate of economic policies for National; a slate of civil liberties policies for Labour/Green, choosing the ones that the Greens would find most enticing. A liberal agenda is advanced in either case. It's not like Labour is hopeless on civil liberties either: I am far more a fan of Labour's civil unions bill and prostitution law reform than I am of anything National's done or, increasingly, than I am of anything I expect National to be likely to do. For all that Labour screwed up on the economics side, a not unreasonable case could be made that a liberal agenda made more progress under nine years of Helen Clark than has been made with a liberal party in a National government.

After an election giving National the choice, would National really choose not to bring ACT into the government if its slate of economic policies were roughly in keeping with the kinds of things that National voters tend to like? Just make former National Party leader Don Brash's productivity commission report the basis for ACT's proposals. But by being willing to go into coalition with Labour on a civil liberties platform where they'd make common cause with the Greens: drug reform, internet filter, civil asset forfeiture, perhaps even copyright reform, ACT could have a decent chance of holding National to some reasonable economic reforms: size of government (giving room for changes in taxation), welfare, regulatory burden, RMA.

ACT needs to be able to make credible threats. Focusing on civil liberties would help.

I could easily be wrong: maybe the Regulatory Responsibility Bill has a really great chance of being implemented in a form that would do a lot of good. I can believe that National would be more friendly towards legislation that constrains future action than legislation that annoys voters today; it's probably ACT's best chance of achieving anything on the economics side. If they can quietly make useful structural changes in a National government, then there's less need for the kind of positioning I'm advocating. But everything I've seen thus far from Key makes me pessimistic; I'd expect National to write in enough escape hatches that it, and Labour, would not be terribly constrained. OIRA in the United States hasn't been particularly effective in constraining bad legislation and budget caps there similarly have proven ineffective when every year can be deemed an emergency year requiring the cap be increased or ignored. Quasi-constitutional constraints are great, but they have a hard time being effective in a Parliamentary system if the majority party doesn't particularly wish to be constrained and if voters aren't particularly constitutionally minded.

The biggest risk in liberal positioning would be in alienating the hard conservatives in ACT's base. But how many of those would be willing to trade a much better chance of advancing the economic issues they care about in exchange for some moves on social policy? And, for those who haven't the stomach for the deal and leave, how many younger folks would ACT bring in on a civil liberties ticket? I hope ACT's doing some polling.


  1. I think you've written an article about something that doesn't exist.

    Is there any evidence that ACT really was a liberal party at any point in their life?

    As far as I can tell they've always been am authoritarian hard-right party with just the merest sprinkling of liberal economic rhetoric.

  2. Did I take the banner "ACT: The Liberal Party" too seriously?

  3. @TB

    For example, ACT voted 5-4 in favour of civil unions.

  4. "Did I take the banner "ACT: The Liberal Party" too seriously?"

    If you really thought it meant a classical liberal party then yes. But I have always worried that there is too much of the conservative type thinking in the party.

  5. I think the founders of ACT were truly liberal - Prebble & Douglas from the 4th Labour Government. But the media in NZ has never been sophisticated enough to make the distinction between 'right' and classical liberal. More recently they have deliberately attempted to court the conservative vote via bringing in David Garrett of the sensible sentencing trust.

    Arguably the position of tougher sentencing isn't at odds with liberalism, but I don't that Garrett, or more importantly Garrett's suppporters are particularly liberal. So IMHO ACT is liberal no longer, and would never publicly side with Labour while Douglas is around anyway.

  6. The ACT youth wing seems liberal. Douglas and Hide seem liberal. Garrett and Boscawen, not so much.

  7. I suspect you may be over thinking this a little. The reason National is not paying too much attention to ACT is that they have a strong mandate to do their own thing. National won 44.9% of the vote and 47.5% of the seats at the last election. Allusions to MMP being the cause of the problem are also misplaced, I believe; National won 58.6% of the Electorate seats, and could be expected to have comfortably won a majority under either SM or FPP, and probably even under STV.

    The ACT party are just going to have to wait until future elections when National is more dependent on their support before they can reasonably expect to extract policy concessions. If the next election were to see ACT win 5 seats in a 122 member parliament, with the Maori Party winning 5 seats and National winning 53 seats (a fairly plausible result,) then abstaining on Confidence and Supply would not be enough for the National Party to govern, and National would need to instead form a coalition with ACT and the Maori Party. Under these circumstances ACT would wield a lot of power, and would justifiably be in a position to give National a strong ultimatum. Until then though, I don't think ACT can expect to be taken too seriously.

    That's just how MMP works, and with 3.7% of the vote a minor party shouldn't be holding a major party to ransom. You can see an analogous pattern emerging with the Green party. Despite common perceptions to the contrary, the Green party didn't hold too much sway over the last Labour government, which is also fair enough given they only won 5.3% of the vote at the 2005 election. They will also just have to wait until their support is needed to form a stable government before they can expect to advance their own policies and/or hold any major ministerial posts.

  8. @Matthew: Didn't Douglas work with Goff in the 80s?

  9. @kiwi: Imagine that National and Labour each take 40% and ACT takes 11%. Can ACT credibly argue that it would go into coalition with Labour or that it would allow a National government to fall? If it can't, then it achieves a lot less in coalition negotiations than if it it could.

    Of course we shouldn't expect too much where ACT only had 3.7%. Question is more whether their having a greater fraction of the vote is likely to get them anywhere on policy and, if not, whether they're then likely to get that greater fraction.

    What did the Greens achieve last time round? The anti-smacking legislation and the abolition of the youth minimum wage for starters, and possibly the emissions trading scheme (though not in the form they'd have wanted). The buy Kiwi made campaign was another symbolic win (didn't actually do much).

    It hardly would have been tail wagging the dog for National to have supported Douglas's minimum wage bill - wasn't ruled out in the platform, would have been consistent with National having voted against the harmonization of the youth and adult rates two years ago.

  10. > Can ACT credibly argue that it would go into coalition with Labour or that it would allow a National government to fall?

    No to the first question, maybe to the second. The whole point of threatening to take your toys and go home is that, like all good threats, you never have to act on it as long as it appears credible.

    If ACT had the numbers and said to National "pass the Douglas Amendment into law, or we'll pass a motion of no confidence," what do you think National would have done? Like you pointed out above the bill wasn't ruled out in platform; I can't see National calling ACT's bluff and not cooperating. Besides, they would come off as principled and might do alright at a snap election, which makes their threat even more credible.

    > What did the Greens achieve last time round? The anti-smacking legislation and the abolition of the youth minimum wage ... the emissions trading scheme ... The buy Kiwi made campaign

    That's a pretty short list, which was my point in my comment above about how ACT aren't doing significantly worse in this Parliament than the Greens did last Parliament.

  11. @kiwi: The Greens are in the same spot that Act is in: they can't credibly argue that they'd bring down a Labour government in favour of a National alternative, and they can't credibly argue that they'd go into coalition with National.

    Bit of chicken and egg: I think ACT would have an easier time getting the numbers IF it could make the threat credible. I'd also think they'd have to credibly be ready to cross the aisle rather than just force an election: voters get pissed off when elections are forced on minor issues.

  12. My involvement and the involvement of the ACT on Campus I lead is staked on the credibility of ACT as a libertarian party.

    I show up for party board meetings and mix with the MPs and supporters throughout New Zealand too, and have done for years. I'm fairly capable of smelling statism and calling people on it. So...hate to put it this way but how suckered in could I be to be so mistaken?

    Of course it's a liberal political party. Even if that may turn out to be an oxymoron.

  13. Good post. Anybody who labels ACT as a hard right party is being at best lazy, at worse, ignorant :) Sure there might be some people in the party that might not be as liberal as the rest of us - but every party does.

  14. Ok maybe I am being a bit strong to say ACT is no longer liberal. But having Garrett around seriously dents their credibility.

    @Eric - I thought there was a massive amount of personal animosity between Labour and Douglas as a result of the 80's. But maybe it was more just with the Clark faction.

    I would love to see ACT start focussing a bit on socially liberal issues. It seems to me National is currently more effective at being socially conservative than they are at being economically liberal.

  15. @Rick: My impression is that the youth wing pushes harder on the social liberal front than does the main party, partially, I suppose, because you have to recruit university students and that's going to be the most effective means. Even if the vast bulk of ACT is friendly to socially liberal positions, those policies rarely get mentioned or highlighted even on the party website.

    @Heine: When a liberal party only talks about the economic side of liberalism and says nothing while its coalition partner pushes on social conservatism, it's pretty hard for the external observer to make those distinctions.

    @Matthew: I'm pretty sure Douglas worked with Goff in the 80s on economic issues; Goff's moved away from that now, but good working relationships can always be reforged.

  16. I would say the biggest threat to Act survival right now is their unpopular leader Rodney Hide. He isnt a leader.

    Its basic, you can have all the best policies in the world but if the boss is lacking trust and credibility and cant sell the product to voters the party is screwed.

    I feel sorry for the members that believe in the party.

  17. This also speaks to your earlier post on the minimum wage where you thought perhaps Key was saving his political capital for future reform.

    He now seems to be starting to waste some of it on opening up a pathetically small area for mining. Truly bizarre IMO.

    Also to all the commentators above, you could always go for the Libertarianz, (should boost their polling above the ex-Bill and Ben party)