Ultimus inter pares – part I

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).

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

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

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

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Roger Douglas

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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’être 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.