The new world

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).

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 embarrassing 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.