Wednesday, 30 October 2019


Spare a brief thought for the National Party. If being the Leader of the Opposition is the worst job in politics, then being the party of Opposition is the worst state to be in. No matter how inept the government in office, the Opposition is always on the back foot, reacting all the while to whatever the government is doing, while at the same time being expected to promote constructive, well thought-out, affordable alternatives.  And, even if the Opposition is able to develop some bold, new and attractive policy, then there is always the chance the government will act to nullify it, or simply steal it and implement it as its own.

Moreover, the government has the resources of the entire government bureaucracy behind it, whereas the Opposition has but a small handful of taxpayer-funded researchers and policy advisers at its disposal to match them. It is always a very uneven contest, but the public nevertheless expects the Opposition to be able to fight the government on more or less equal terms. After all, in politics, even proportional representation politics, there are no prizes for coming second. While MMP may well mean Parliament has become more representative, and put an end to the elected dictatorship that sometimes characterised single party majority governments under First Past the Post, our system of government is still a case of “winner take all” for those parties coming together to form governments today.

There is no doubt that as a liberal/conservative party National prospered under First Past the Post. In the 47 years from 1949 to advent of MMP in 1996, National was in power for 35 of them. Its combination of urban liberals and the provincial and rural sectors enabled it to tack skilfully between the two as far as policy was concerned, so establishing the popular impression that, unlike Labour with its union and intellectual base, National spoke for the New Zealand as a whole.

MMP and the advent of new political parties has disrupted that balance to some extent. While National has been relatively successful in running multi-party governments under MMP (and governing for just over half the time), it has struggled to recapture the formula that made it so dominant in earlier years. Although current polling shows it remains the most popular party in New Zealand – a position it has enjoyed now for over a decade – it would find it difficult to put together a majority government, were an election to be held today.

That is where the question of policy becomes both important and difficult for National. It is important because it is both a mark of where the Party stands, and the key vehicle to attract the support of the uncommitted voters it will need if it is to lead the next government. But it is also difficult because, in the current electoral circumstances, it has to appeal more strongly to those more conservative voters that drifted to New Zealand First at the last election, while not alienating its more liberal supporters in the cities.

National’s just released social services policy discussion paper lays out these tensions very clearly. On the one hand, there are the hard-line measures about gangs and beneficiaries aimed at the bigot vote of New Zealand First, while on the other hand are more progressive and innovative measures like the social investment strategy promoted by former Prime Minister Bill English; the focus on the first 1,000 days of a child’s life; and, the introduction of a new money management system for vulnerable young people. And by stating some measures as firm policy, while others are more in the realm of ideas the Party wants feedback on, National will be hoping that not too much of it could be filched by the government if it were of a mind to do so.  By releasing it during a normally quiet Parliamentary recess week, it will be hoping that the plan attracts good media coverage, so buying a little more protection from the “where’s your policy?” charge usually levelled at Oppositions a year out from an election. Above all, it will be hoping that one or two of the ideas it has announced so capture the public imagination to build up a good head of steam in the lead-up to the election, although that very remains very much to be seen.

One thing National will be conscious of is not falling into the trap the current government did by talking big in Opposition about its plans for housing, Auckland transport and mental health, amongst other things, but then, so obviously, not having a coherent plan to deal with any of them upon coming to office. It will know that wide-eyed enthusiasm without anything to back it up is not what voters are seeking.

So, National’s ongoing policy development is likely to be cautious and safe. If it errs on the side of being a little predictable it will be because the Party understands well the tram lines within which it is operating. Labour’s grandiose talk and delivery failures means the electorate is likely to be a little more cynical about bold election promises next year. Therefore, National’s policies primarily need to keep its traditional constituencies intact, while doing whatever it takes to haul back those who have strayed in the past. It understands that if it can do that, it will be in a strong position to lead the next government.

National knows its previous formula has been a winning one. Why would it deviate from it now?

 



Wednesday, 23 October 2019


As the interminable saga surrounding the Wellington Mayoralty election result drags on, some are already blaming the uncertainty on the fact that the election was carried out under proportional representation – in this case, the Single Transferable Vote system Wellington has used for several recent elections. Had this been a First Past the Post election, they argue, the incumbent Mayor would probably have been returned with about 40% of the vote, on a turnout of just over 40%, meaning his effective mandate would have come from about 16% of the total Wellington electorate. At least, when the Wellington result is finally determined, it will able to be said that the person eventually elected will have had the support of the majority of voters, however slim that might be.

On a bigger scale, if ever there was an example of why proportional representation systems provide for a fairer expression of the public will, however perverse and contradictory that might be, this week’s Canadian Federal election is surely it. In the lead-up to the election, conducted under the First Past the Post system, there was much commentary about how split and divided Canada has become and that this would be reflected in the election result, possibly to the detriment of the Trudeau Liberal Government.

Indeed, the results reflect that. The Liberals have won 157 out of 338 seats to remain the largest party, but no longer with an overall majority. The Conservatives are a clear second on 121 seats; the Bloc Quebecois has 32 seats; the New Democratic Party 24 seats and the Greens 3 seats. A period of minority government looms, unless the Liberals and perhaps the New Democratic Party can come to some sort of agreement on confidence and supply issues. Already, there is speculation that Canadians will be returning to the polls in a couple of years.

However, had the election been conducted under a proportional representation system, like, for example our MMP system, a completely different result would have occurred. While more complex, it would have nonetheless been more reflective of the regional and cultural differences bedevilling Canada at present.

Under such a scenario the Liberals would have been joined as the largest party in Parliament by the Conservatives. With 34.4% of the vote the Conservatives would have won 116 seats, the same number as the ruling Liberals who won just 33% of the vote. The New Democrats would have jumped from 24 to 54 seats, reflecting their 15.9% vote share, and in a similar vein the Bloc Quebecois would have dropped to 26 seats, reflecting their 7.7% vote share. The Greens, meanwhile, would have been the big winners, jumping from 3 seats to 22 seats because of their 6.5% vote share.

Of course, such a result would have made government formation even more difficult, although it would have brought the New Democrats and the Greens with a combined putative 76 seats more strongly into play as potential partners for the Liberals, than the actual 27 seats they won between them. Now while such a result is of course hypothetical, it does highlight some of the imbalances within First Past the Post electoral systems.

We know from the New Zealand experience that First Past the Post consistently over-represented the major parties at the expense of the smaller ones. In this Canadian election, the two major parties received just over 67% of the vote between them, however won over 82% of the seats in Parliament. Even between them, the result was uneven. With more than 1% less of the vote than the Conservatives, the Liberals still managed to win 36 more seats than them.

And the result highlighted how much more difficult First Past the Post electoral systems are for smaller parties. Although just over 30% of voters supported the three smaller parties, they actually won only 18% of the seats. The Greens were undoubtedly the hardest done by – their 6.5% vote produced just 3 seats, just under one-seventh of what it would have been under proportional representation. Put another way, this result has over-represented the major parties in Parliament by around 20%, while under-representing the smaller parties by almost 75%.

Canada undoubtedly faces a challenging period ahead. Healing the wounds of what was a very bitter election campaign, while resuscitating the shattered dreams of the last three years, following the return of second generation Trudeaumania three years ago will be mighty tasks. However, Canada is no stranger to minority federal governments. There have been fourteen in all, including three successive minority governments under both the Liberals and the Conservatives between 2004 and 2011. Notwithstanding the vagaries of its electoral system, Canada has nevertheless made minority government work over the years, by focusing on building consensus.

There are parallels here for the current situation in Wellington. On the reasonable assumption the current Mayoral result holds, the Council will have a clear majority for the left, although the Mayor is from the right. If, as early signs worryingly suggest, the left’s approach will be to simply try to use its force of numbers to win everything its way, Wellington is effectively in for three more years of stalemate. Canadian minority governments over the years have governed by focusing on what brings the country together, rather than division on too stark a set of party lines. It is a lesson that should not be lost on the Wellington City Council as it embarks upon the new triennium.
  


Wednesday, 16 October 2019


There must be consternation within the upper ranks of the Labour Party at the performance of some of the Ministers in the coalition government. Every time the government looks like making some positive progress, one or other of these errant Ministers can be relied upon to upset the applecart. No sooner had the Prime Minister returned from her latest overseas trip where she was lauded once more by the international media, and followed that up by honouring her promise to meet Tonight Show host Stephen Colbert at Auckland Airport and show him around the city when he arrived here to film a few programmes, than serial offenders Ministers Jones and Lees-Galloway were up to their old tricks. Both forced the Prime Minister to abandon the warm smiles and adopt the grim countenance once again as she had to first explain then defend their behaviour. It all had a sad look of déjà vu about it.

In the Jones’ instance her defence was predictable: she “absolutely” would not have used, let alone allow herself to have been photographed, using an automatic weapon of the type now banned in New Zealand, and she urged the Minister to read again those provisions of the Cabinet Manual relating to acceptable standards of Ministerial behaviour. And that was it – as it has been on so many other occasions in the last two years – no censure, no discipline, just the usual wet bus ticket slap.

So too with the different case of Lees-Galloway. What seems, on the face of it, to be another judgement-lacking use of his Ministerial discretion on an immigration residency case, has been given the Prime Minister’s full support as perfectly appropriate. It may well be valid – given the person’s protected migrant status – but in the absence of any explanation, however generalised, by the Minister of the background, it just looks like another case of his judgement being found wanting, and his ineptitude overlooked again. The upshot is that any political benefit to have emerged from the Prime Minister’s recent international sorties has been quickly forgotten.
 
Of course, the Prime Minister’s colleagues will point out that in the instance of Jones, as a New Zealand First Minister, the Prime Minister cannot move to discipline, demote or even dismiss him without the backing of the Deputy Prime Minister, the Leader of New Zealand First. They are right to do so – and the reality is that Jones and his New Zealand First colleagues will exploit that to the hilt as a way of differentiating themselves within the Coalition. That is understandable too, but it is arguably an excuse that is starting to wear a little thin.

The Lees-Galloway situation is different. He is a Labour MP, so the Prime Minister can discipline, demote or even dismiss him, as she sees fit, without reference to other parties. That she has done none of those things now, or at the earlier time of the Soubrek case is a commentary on her leadership style, and the perceived lack of talent in the remaining non-Ministerial ranks of the Labour Caucus to replace him.

Where all this begins to matter a little more is that we are coming to the stage of the electoral cycle where voters start to focus less on the government’s specific individual actions, and more on what the government’s overall impact – positive or negative – has been on them and their families. Quite simply, with just on a year to go until the next General Election, they are beginning to weigh up whether the government is worth re-election. In the end, it will be the perennial question, “is this as good as it gets, or is there more to come?” that determines any government’s fate.

This government is, by virtue of its composition, unusual, and therefore somewhat more difficult to categorise in terms of its performance. Previous multi-party governments have had more coherence – either the centre-left, and the centre; or, the centre-right, the right, and the centre working together. This government brings together the left, the centre-left and the centre-right, meaning immediately that the compromises needed for its survival were greater than those within any of its predecessors under MMP.

 So, the fact that the Prime Minister is effectively hamstrung over the performance of New Zealand First Ministers should come as no surprise – it was virtually guaranteed this would be the case from the day the government was formed. Nor should it be any surprise that the Greens have been steadily pushed to one side – again, it was inevitable that there would be a contest amongst the smaller parties for the major party’s prime attention, and that New Zealand First would play much harder ball when it came to that. While these relationships and tensions were all known from the outset, what was not fully known was how they would play out when it came to deciding policy. The fear that some expressed then that it would mean that New Zealand First would have an effective veto on policy has proven largely to be correct, meaning that Labour governs at the pleasure of New Zealand First, rather than with its support. It is doubtful that voters wanted or anticipated that a Party with just 7% of the party vote would call all the shots this way.

Now, when it comes to deciding whether the coalition government merits re-election next year, all these factors will come more strongly into play than specific policies. In assessing the government’s overall performance, voters will be deciding whether the increasing perception that not a lot seems to have happened under this government (remember this was supposed to be the year of delivery) is because its very composition is a block on progress, which needs to be rectified, or whether the issues it says it is dealing with are really so complex that they cannot be resolved in one three year term.

The recent widespread protests here and abroad against a perceived lack of commitment to addressing climate change, and the results of the some of the local elections here last week, show that voters are becoming increasingly impatient with politicians who appear either to be blocking necessary action, or to be moving at too slow a rate. Nor are they afraid of making radical political change, if they think that is required.

If, as seems more and more likely, what we have now is as good as it is likely to get under this government, the next year is likely to be a very painful one for it. It may learn the hard and bitter way that more of the same is no longer a winning electoral formula, no matter how warmly, empathetically and positively it is promoted. Just ask the former Mayor of Wellington.  
  




Wednesday, 9 October 2019


In 1984 when the fourth Labour Government introduced its now infamous tax surcharge of 25 cents in the dollar on additional income above $100 a week for those in receipt of National Superannuation, it was claimed that about only a quarter of superannuitants would be affected – the actual figure turned out to be 23% - and that very, very few of them would lose the equivalent of all their National Superannuation. In the heat of the time, that claim was largely disbelieved as much greater numbers of superannuitants, thinking their retirement income would be more than it actually was,  believed they had been adversely affected and reacted angrily accordingly.

Then, there were just under 400,000 National Superannuitants, accounting for 12% of the population. National immediately promised to repeal Labour’s surcharge, only to replace it with its own version in 1991. Superannuitants’ outrage was predictable and immediate, leading not only to the establishment of Greypower but also contributed to the birth of New Zealand First to fight for the abolition of the surcharge. That eventually occurred in 1997, leaving both the Labour and National Parties of the time with massive credibility scars for their handling of the issue over the years.

Since then, universal entitlement to New Zealand Superannuation (as it is now known) has been restored and no major political party has been brave (or foolish) enough to tamper with that. National’s commitment since 2017 to gradually increase the age of entitlement to 67 by 2037 is perhaps the biggest potential move, but it is timid by the standards of Labour’s 1984 and National’s 1991 changes. Now that the current government has resumed contributions to the so-called Cullen Fund to future proof superannuation payments from 2025, an uneasy consensus appears to reign on superannuation policy.

In the meantime, the raw numbers of those in receipt of New Zealand Superannuation have risen around 95% since 1984 to just under 770,000, and their proportion of the population is up by a third to around 16%. Perhaps it was that growth and projections that it will increase in the future to around 1,430,000 New Zealand superannuitants by 2050, around 21% of the total projected population then, that has influenced the University of Auckland’s Retirement Policy and Research Centre to call for a tax surcharge on higher income earners receiving superannuation, to cover the cost of their superannuation payments.

Whatever economic and equity considerations there might be in favour of a proposal like this, political reality means it or anything like it is unlikely to fly. Too many political parties and politicians have been scared by the superannuation experience of the last couple of decades to want to go anywhere what looks like a reintroduction of the discredited approach of the 1980s and 1990s. Even though most of the generation of politicians involved at that time has moved on, the legacy of the sense of betrayal and antagonism engendered by those earlier changes remains.

Importantly, it was often not the superannuitants themselves who felt most aggrieved, but rather those approaching superannuation who saw their potential future income – and thus their intended retirement standard of living – being reduced, and their children, worried about how their parents might cope. It would be just the same today.

The only way change of this type could be progressed at this time would be through some form of multi-party agreement, but the chances of that occurring are zero. For a start, no party would want to be seen to initiating a move to tax superannuitants more, and few others would be keen to join them. There was a brief accord between National and Labour before the 1993 election which quickly fell apart because both saw richer pickings in continuing to attack the other over their earlier “treachery and betrayal”. There is no reason to think it would be any different today.

Moreover, if ever there was a cause to revitalise the flagging fortunes of New Zealand First, this would be it, and while Labour, and it appears National too, are prepared to cuddle up to them as the price of gaining political office, neither is so generous as to gift them a whole generation of voters in this way. The rising numbers of older New Zealanders presents enough of a challenge for both Labour and National anyway, and while both are steadily moving to recapture that ground, neither can afford to alienate, for whatever reason, that group of voters on an issue as basic as superannuation.

Now, while all this might appear an overly cynical assessment, it is nevertheless a political reality. It is not to say, however, that the preservation of vested interests means that future discussions of superannuation policy are off the table, but, rather, that if those discussions are to have credibility, they need to be couched in such a way to gain broad  political support.

Enhancing and promoting Kiwisaver may well a prove a starting point towards some common ground. Today, over 2,800,000 New Zealanders are enrolled in Kiwisaver and that number is increasing steadily. Making Kiwisaver contributions compulsory for all those in the work force would allow for a more considered approach to be taken to New Zealand Superannuation over time.  Backing that up with an annuities policy whereby Kiwisavers could manage their investment on a regular income stream basis once their funds mature at the age of 65, would mean that the absolute reliance on New Zealand Superannuation as the major retirement income source for so many would steadily reduce over the years, and that the climate for considering its long term future would be more congenial. There is scope for Labour and National to work together on this ground, if they are of a genuine mind to secure a stable retirement income scene for the future.

New Zealand Superannuation is but one – albeit a very large – part of the retirement income mosaic. The mistake we have made for more than a generation now has been to treat it as the whole picture. It is time to learn from that, and to move forward.