Ultimus inter pares – part II

Note: this post originally appeared on ‘Douglas to Dancing’, a blog I maintained from 2007-9 on the ACT New Zealand political party. The blog was an extension of the thesis I wrote about the Act Party in 2007, From Douglas to Dancing: explaining the lack of success of ACT New Zealand and evaluating its future prospects (PDF).

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 anathema 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.

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