Tuesday, October 24, 2017

Early pointers to the challenges Ardern will face

A few random thoughts on the election outcome:
● In yesterday’s Dominion Post, Tracy Watkins wrote that Jacinda Ardern had won the election. In fact she didn’t; her party was well beaten. What Ardern won was the round of secret horse-trading that followed the election. All elaborate, self-serving rationalisations aside, this inconvenient but incontrovertible truth will continue to cast doubt on the legitimacy of Ardern’s government. When it came to the crunch, Labour was more desperate than National to secure power and thus more willing to defer to New Zealand First. That’s how we ended up with a government in which a party that won only 7.2% of the popular vote, and couldn’t even retain its only electorate seat, is perversely rewarded with four seats at the cabinet table and the second-most powerful job in politics.
● In the rapture over the left’s putative victory, there’s a lot of denial and wishful thinking going on. No one wants to confront the possibility that it could all go pear-shaped. Perhaps the most notable example is James Shaw’s less than convincing insistence that having the climate change ministerial portfolio outside cabinet doesn’t mean the issue has been downgraded in terms of importance.  He has to say that, of course. But a lot of voters on the left will be wondering how climate change – a priority issue for both the Greens and Labour – ended up being pushed off to one side. They will see this as a weakening of core commitments. It’s an early sign of the uncomfortable compromises that are required to make coalitions work, and which can gradually turn septic.
● Similarly, reported differences over the proposed Kermadec Sanctuary are being played down, but these point to the fundamental incompatibilities built into this three-way coalition – most notably between NZ First, which is big on economic development, and the Greens with their priority on sustainability, low growth and a pristine environment. Scuppering the Kermadecs deal at the behest of NZ First would inevitably be seen as a betrayal of the Greens, who initiated the sanctuary proposal. If it was agreed behind the Greens’ backs, as reported, so much the worse. And if NZ First was acting to protect the interests of friends and donors in the fishing industry, as implied by news reports, even worse again.
● And this is just the start. The potential for tension between the three coalition partners, but especially between NZ First and the Greens, is enormous. As Lisa Owen noted on The Nation, Winston Peters pointedly didn’t mention the Greens in his speech announcing the formation of the new government (an announcement that should properly have been made by the Governor-General, but that’s another matter).  A politician of Peters’ cleverness and experience doesn’t make such an omission by accident. It unmistakably implies an intention to treat the Greens as if they don’t exist. But of course he can’t ignore them – and at some point, Peters’ Muldoonist enthusiasm for government stimulation of industry and employment, especially in the regions, is bound to clash head-on with the Greens’ concern for the environment.  I wonder, for example, how the two parties might reconcile differences on issues such as offshore drilling and mining – a potential creator of jobs in some struggling regions (South Taranaki, for example), but an absolute no-no for the Greens.
● On social issues, the gaps are potentially even wider. A socially conservative party will have to co-exist with Labour and Green MPs who pride themselves on their “progressive” politics. How’s that going to play out when it comes to liberalisation of the drug laws, to give just one example? New Zealand First voters will expect their party to hold the line against a tide of liberalism on issues such as race-based preference and gender politics. Even with the Greens shut out of the cabinet room, it’s hard to envisage a meeting of minds.
● Not much was said during the election campaign about industrial relations, but with every Labour-led government there’s an expectation of a dividend for the unions. An increase in the minimum wage will be just the first and most obvious step. Expect a partial reversion, at the very least, to the old national awards system under the more friendly label of “fair pay” agreements. The unions have been chafing under nine years of National government and will want some of their old power back.
● Expect lots of talk about investment in innovation, education and upskilling. This is the stock-in-trade of modern Labour governments. It typically involves empowering the education sector (Labour governments are a godsend for teachers and academics) and spending enormous sums of taxpayers’ money for results that will be conveniently hard to measure.
● According to James Shaw, this will be a government of consensus. But in truth, there are only two obvious broad areas of consensus across the three parties. One is belief in the need for a more interventionist, hands-on government and in the power of regulation to create a better and fairer society. But the more pressing consensus binding them – at least for now – is their common desire to be in power. Having achieved that, all three are trying hard to ignore the obvious disparities that point to the possibility that this coalition will be fractious and short-lived. Perhaps the sheer relief and delight at being in government is blinding the left to the huge difficulty of maintaining unity.
● Jacinda Ardern hasn’t put a foot wrong so far. Her relaxed and assured performance, for such a relatively inexperienced leader, has been remarkable. Shaw, too, is a personable and seemingly capable politician who did well to haul the Greens out of the deep hole that Metiria Turei dug for them. But the real test is yet to come. A prime minister with no experience in government will have to manage a large number of similarly inexperienced ministers, while also managing potentially very awkward relationships between two smaller coalition partners with very different agendas. It’s going to be interesting.
● One final thought. It’s been a cruel outcome for Bill English, but he hasn’t shown a trace of bitterness. For her part, Ardern made a point of generously paying tribute to English in her opening remarks on the night she became prime minister-elect. Whatever else may be wrong with our politics, we should be proud that the two leaders behaved with such civility after the white-hot tension, drama and uncertainty of the election. Perhaps it’s because we’re a small, intimate country and we need to get along with each other. Your political opponent might have kids at the same school as yours, or end up sitting next to you on the plane, or bump into you at the meat counter in the supermarket. Whatever the explanation, perhaps other countries should send their politicians here to see how it can be done.

Saturday, October 21, 2017

The demeaning of democracy

(First published in The Dominion Post on October 20.)

I’m writing this column on Thursday morning. Winston Peters, who is described as the kingmaker but behaves as if he’s actually sitting on the throne, has said he’ll make an announcement about the formation of a new government this afternoon.

We shall see. With Peters, who knows?

Everyone’s talking about the time lag, but that should be the least of our concerns. Other western democracies have taken months to form coalition governments and haven’t suffered any obvious harm.

No, what should cause us to rise up in disgust is that the post-election circus has made a travesty of democracy.

For that we can principally blame Peters – but not just Peters alone. Both Bill English and Jacinda Ardern, by kowtowing to Peters, have been complicit in the demeaning of the process by which we elect governments.

The media are not without blame either. By dancing around the New Zealand First leader and hanging on his every snarled utterance, they have encouraged the delusion that he’s entitled to decide our next government.

It’s only in the past few days that commentators have started to openly question the morality of a situation in which a party that won a mere 7.2 per cent of the vote, and lost its only electorate seat, should determine who will govern us.

There is a place in the political ecosystem for the Peters party. You can see why people voted for it. But a flawed system has given New Zealand First a degree of power and influence far beyond that to which it’s entitled.

In any half-rational and honourable democratic system, National and Labour – which between them won 81 percent of the vote and all but one of the 71 electorate seats – would have dictated the terms of coalition negotiations and perhaps humoured Peters with a few policy concessions.

Failing that, English could have made a principled decision not to play Peters’ game. If things came to the worst, he could have chosen to sit out the next three years and watch a Labour-New Zealand First-Greens coalition tear itself apart, as it almost certainly would.

Instead we’ve ended up with the worst possible option: a washed-up politician, unwanted by his own electorate, behaving as if the country had handed him a mandate to dictate the government agenda for the next three years, or however long any ramshackle coalition with Peters at its centre might last.

It’s been reported that he expects to be deputy prime minister, whichever party he goes with. What colossal gall from a politician who couldn’t even persuade his own electorate to return him to Parliament.

But that’s Peters. We know him well and shouldn’t be surprised.

What was less foreseeable was that both National and Labour were reportedly prepared to humour Peters’ preposterous ambition. Like everything else that has happened since election day, this makes a mockery of democracy.

First, there was Peters’ haughty refusal to talk to English and Ardern in the immediate aftermath of the election, on the spurious pretext that he had to wait for special votes to be counted.

Then came the bizarre aura of obsessive secrecy that surrounded the negotiations at Parliament, where officials even went to the point of ensuring that reporters couldn’t get a clear view of the National and Labour teams as they went to and from meetings.

The message to voters couldn’t have been clearer: Once they’ve cast their votes, the doors are slammed shut and the politicians are left to get on with it, unencumbered by any obligation to disclose whatever they might be up to.

Open government? Forget it.

Peters was the only party leader fronting the media, and he lived up to expectations by (a) barking at reporters for their impertinence in wanting to know what was going on, and (b) delivering pronouncements that were minor masterpieces of obfuscation and evasiveness.

Deadlines and time-frames shifted and changed like wisps of smoke. But that’s Peters; nothing he says should ever be taken at face value.

The crowning indignity came when it became apparent that the decision on who would govern us was to be made by an anonymous bunch of non-entities few people even realised existed – the board of New Zealand First.

We should all feel humiliated by this pantomime. A country that could once claim to be a model liberal democracy has been discredited by a flawed electoral system, compounded by Peters’ overweening self-regard and the readiness of the two major party leaders to defer to him.

There is a solution that would avoid these farcical proceedings in future. In our haste to drop the first-past-the-post system in 1993, no one thought to ensure there were rules in place to govern what happened under MMP after the votes were counted.

Peter Dunne has the right idea. He suggests it should be the job of the Governor-General to invite the party that has won the most votes to form a government. If it can’t get the numbers, then an approach should be made to the next-largest party.

The crucial thing is that the Governor-General should control the process. Instead, we’ve handed that power to a huffing and puffing egotist having his last shot at glory via a hole in our constitutional arrangements. Well done us.

Friday, October 20, 2017

A political bastard child

I love the way political commentators are delicately skirting around the inconvenient fact that our new government is one whose formation was driven by a party with only 7 percent popular support. This willingness to ignore the obvious is hardly surprising, The commentariat generally leans to the left and is delirious with pleasure at the anointment – I won’t say election – of a left-leaning government. They don’t want anyone raining on their parade and would prefer to overlook the fact that this is a government with little moral legitimacy. It is a political bastard child and it’s unlikely to grow up happy.

Jim Bolger pointed out on Morning Report this morning that this is the first time that the party that won the most votes isn’t in government. The standard counter-argument from the left, and it’s superficially persuasive, is that the vote for change on September 23 outweighed the vote for the status quo. The problem with this line is that New Zealand First voters wanted change for very different reasons than those who voted for Labour or the Greens. It now suits those parties to claim they are all singing from the same hymn sheet, but the coalition is one born out of pure pragmatism and convenience rather than ideological compatibility. The fundamental differences – especially in areas such as social liberalism, where NZF is the polar opposite of Labour and the Greens – is likely to make this an inherently unstable government.

I like Jacinda Ardern. She has shown in her short time as Labour leader that she has formidable intelligence and political smarts to go with her attractive personality. It’s a winning combination and I believe she could make a very capable prime minister. It’s just a shame that she should attain power in such dodgy circumstances.

Saturday, October 14, 2017

Licensing trusts: a great social experiment that mostly failed

(This is a slightly longer version of a story first published in The Dominion Post, October 13.)

It probably comes as a surprise to many people to learn there are still places in New Zealand where it’s not possible to buy wine or beer in a supermarket. Invercargill is one such place. West Auckland is another.

These are not “dry” areas, where local voters have chosen to remain liquor-free. New Zealand lost the last of those (two in Auckland, one in Wellington) in 1999.  

They are, however, a lingering hangover – although that may not be the most appropriate word – from an era when anti-liquor fervour caused legislators to seek a balance between total prohibition and an open-slather alcohol regime where the much-vilified booze barons, the rich men who controlled the liquor trade, would hold sway.

The solution, as prohibitionist sentiment gradually abated and areas that had previously been dry chose to go “wet”, was for voters to be given a choice: they could either allow ownership of liquor outlets by private enterprise, or they could opt for community control.

Under the community control model, voters would elect licensing trusts to run hotels, taverns and bottle stores. Each trust would enjoy a monopoly on liquor sales within its area and profits would be ploughed back into the community.

In a country that remained deeply suspicious of the privately owned liquor trade, the trust option seemed an ideal “third way”. People would have access to alcohol, but its sale would be controlled by elected local representatives who would ensure it was managed responsibly for the community’s benefit.

The first licensing trust was established in Invercargill in 1944, after 38 years as a “dry” city. The Invercargill trust still enjoys a monopoly on liquor sales in that city (other than in clubs and licensed restaurants) because apparently that’s what the community wants. 

Three other trusts – Mataura (also in Southland) and Portage and Waitakere (both in West Auckland) – have retained similar monopoly rights, which explains why mystified visitors to those areas can’t find wine or beer in local supermarkets.

But in all other areas where licensing trusts have survived, voters – often frustrated by lack of choice or disheartened by the trusts’ poor performance – have taken advantage of “competition polls” to strip them of their monopolies. Hence in places like Masterton, trusts are still active in the local liquor trade but must now compete with privately owned bars and liquor outlets, including supermarkets.

A government working party headed by Sir George Laking in the late 1980s recommended that trust monopoly powers, which were out of step with the general trend toward deregulation, should be abolished altogether. But parliament, which was often cautious to the point of timidity on liquor issues, decided that the public should have a choice – hence the competition polls, which gave voters a chance to register their dissatisfaction with trusts that failed to measure up.

The patchy history of the trusts is told in the recently published book A Great Social Experiment, by Bernard Teahan. It’s a story of social and political idealism that often collided disastrously with commercial realities.

Teahan sets the story against a backdrop of wowserism, the deeply ingrained suspicion of alcohol and its purveyors which brought New Zealand to the brink of country-wide prohibition in 1919.

Licensing trusts grew out of dissatisfaction with widespread drunkenness, primitive drinking conditions and distrust of powerful brewing interests. Rex Mason, the reformist Minister of Justice in the Labour government of the 1930s and 40s, threw his weight behind the idea and so did prime minister Peter Fraser, who saw trusts as a way of eliminating profit as the sole motivator of liquor sales. Profit was explicitly not intended to be the trusts’ primary goal.

Masterton followed Invercargill’s lead in 1947 and other trusts were established in quick succession. Between 1947 and 1975, voters in 57 areas backed the creation of trusts, although only 30 became operational. Nineteen are still functioning today.

Teahan records that brewery companies, which effectively controlled the hotel industry, opposed the trust concept every step of the way. The National Party showed little enthusiasm either, although up-and-coming National politician Jack Marshall, a devout Presbyterian who would eventually lead the party, supported trusts and thought they might force brewers to lift their game.

Local councils were often instrumental in getting trusts established. A key figure behind Auckland’s ill-fated Mt Albert trust – which never became operational and was eventually swallowed by the neighbouring Portage trust – was Frank Ryan, long-serving mayor of Mt Albert (and the father of actress and environmental activist Lucy Lawless).

Ironically, as trusts struggled to get established because of inadequate capital and the crippling cost of loan finance, many ended up depending on supportive arrangements with the big two brewery companies – in effect, sleeping with the enemy.

The last functioning trust, Flaxmere (Hastings), was established in 1975. By then the flaws in the trust model were becoming obvious. Even with a monopoly, many were unable to stay afloat.

The enthusiasm and good intentions of the elected boards that controlled trusts were all too rarely matched by the necessary business skills or funding.  Many trusts tested the patience of their communities by taking years to open their first outlets.

One, the Stokes Valley Licensing Trust in Lower Hutt, failed spectacularly after only a year because the Licensing Control Commission required it to provide hotel accommodation where there was no demand for it.

Others over-reached themselves of their own volition, incurring massive debt to build grandiose premises on the basis of wildly over-optimistic business projections. One example was the Orewa trust, north of Auckland, which destroyed a healthy balance sheet by investing heavily in a substantial restaurant where there was no market to support it.

In their desperation to prove themselves, a few trusts resorted to dodgy practices (such as borrowing money without approval) which attracted the attention of the Auditor-General.  Management was often sloppy: Wellington’s Johnsonville trust somehow lost $200,000 worth of stock for which no one was held accountable.

Poor service and sub-standard facilities are other factors cited by Teahan as harmful to the image of the trust movement. Civilised drinking conditions were central to the trust philosophy, yet Teahan describes the Otara trust’s pub in South Auckland as a “dark and dingy barn”, designed to maximise consumption.

Otara also had problems with violence and lawlessness, as did some other trusts. The Porirua trust’s first tavern was known locally as the Flying Jug because of the frequency with which brawls erupted. This was not what the architects of the trust movement had envisaged.

Even Teahan, a true believer in the trust model (he spent most of his career in trust management), acknowledges that trustees and their managers were often not up to the job. Communities grew tired of hearing promises of good things to come, only to be let down when trust-owned outlets closed or another dismal set of financial results was announced - always with a fresh batch of excuses.

By the 1980s, the great social experiment was in peril. A few of the longer-established trusts, having had decades in which to build up a solid base, were strongly embedded in their communities and trading profitably. But changing social expectations and a more liberal and sophisticated drinking environment placed demands on the newer trusts that they were hopelessly ill-equipped to meet.

Teahan says the trust model fell out of favour because “the market philosophy became the all-powerful belief”. But in fact most of the “demised” trusts, to use his own euphemistic terminology for those that failed, were undone by their inability to live up to their idealistic vision.  

Addressing a licensing trusts conference in 1990, former prime minister David Lange described trusts as a bizarre experiment and said they were an endangered species.

He was almost right. Four trusts in the Wellington area subsequently collapsed after years of governance so shambolic and muddle-headed that it became almost painful to watch. Even Teahan is scathing in his criticism of trusts that imploded because of egos, personal whims and political agendas.

The 1990s was also the decade in which competition polls – usually initiated by supermarket chains chafing at their inability to sell wine and beer – began turning the tide against trust monopolies.

Where areas voted to renounce their “dry” status but chose to reject the trust option, as in Auckland’s Grey Lynn and Wellington’s Tawa, Teahan acknowledges that the poor performance of trusts in neighbouring areas was a factor.

Yet the better-managed trusts survive, and a few weaker ones have been saved by being brought under the control of successful operators.

At least one has moved far beyond its original remit. What was originally the Masterton trust (which Teahan managed) is now Trust House, which operates licensed premises on behalf of several trusts and also has substantial investments in social housing, aged care and even supermarkets.

The Invercargill trust, the mother ship, is still flying and seems to enjoy solid support from its community. According to Teahan, the southern city is one place where supermarkets haven’t bothered to push for a competition poll because they don’t think they could win.

Teahan points out that successful trusts return millions of dollars to their communities: nearly $27 million nationwide in 2014.

This is the argument that trusts always fall back on, even when their performance has been dire. It’s what they emphasise whenever their monopolies have been under attack from supermarkets and other private interests.

But much of the money invested in community assets comes from gaming profits which, under law, private hotel and bar owners with gaming facilities must also return to the community.

Teahan retains an almost evangelistic faith in the trust concept despite its many failures. The irony is that his book, which is obviously intended to promote the virtues of trusts, also serves as a crushing indictment of the concept because it can’t avoid acknowledging the many ways in which it was flawed.

A Great Social Experiment: The Story of Licensing Trusts in New Zealand, by Bernard Teahan (Fraser Books, $39.50). 

Wednesday, October 11, 2017

Pardon me, but this is all arse-about-face

After 21 years and eight general elections, New Zealanders are finally starting to ask some hard questions about MMP.

The current political lacuna demonstrates all that’s worst about the electoral system we adopted in 1993 and put into effect in 1996. The problem is not that everything has come to a standstill while National, Labour and New Zealand First complete the negotiations which will determine who governs us. Other countries routinely experience long periods in political limbo without appearing to suffer great harm.

Neither should we be either surprised or even troubled by the fact that Winston Peters, having declared that everything would be sorted by tomorrow, has now reneged on that assurance. This is par for the course from Peters, who promotes himself as the only honest man in New Zealand politics but has never hesitated to shift his ground or even execute a U-turn when it was expedient to do so.

Peters is, however, central to the reasons why we should be having second thoughts about a political system that enables a man whose party got barely 7 per cent of the votes to determine who the next government will be. Under any circumstances this would be a travesty, but it’s made worse by Peters’ grotesque posturing.

Bizarrely, he behaves as if New Zealanders gave him a mandate on election day. We did no such thing, of course.  The power Peters is exercising at this moment (and so obviously relishing) has nothing to do with the popular will. It was placed in his hands through a quirk of a system that makes a mockery of democracy. A more humble party leader might acknowledge this by pulling his head in, but this is Peters we’re talking about.

In any half-rational political system, it would be the parties which between them won more than 81 percent of the vote, not Peters with his measly share, that determined the course of negotiations. A minor player such as New Zealand First, if it had genuine respect for democracy, would accept that its negotiating strength should be proportionate with its level of popular support. But again, this is Peters we’re talking about. And sadly he’s encouraged in his delusions by both the media, which can’t resist stroking his ego (for example, by calling him the kingmaker), and by the major parties, whose attempts to appease Peters come perilously close to grovelling.

Pardon the expression, but this is all arse-about-face. It’s demeaning to democracy. We’ve heard a lot over the years about the tail-wagging-the-dog scenario under MMP. Well, here it is writ large, and unfolding before our very eyes.

It’s a situation rich in irony. We voted for the introduction of MMP primarily to punish our politicians and bring them to heal. We were fed up with their broken promises. We wanted to make them more accountable.

Only now are New Zealanders realising that we achieved the exact reverse. Voters have no control whatsoever over whatever’s going on right now behind closed doors at Parliament. In effect, we have placed still more power in the hands of the political elites. This is the antithesis of what the promoters of MMP promised (and perhaps naively believed themselves).

It has also dawned on us that there’s a bit a constitutional vacuum around MMP, which means that the politicians are free to play by whatever rules suit them. For example, there’s no obligation on minor parties to negotiate first with whichever party won the biggest share of the vote.

And note the almost paranoiac emphasis on secrecy and confidentiality that surrounds the negotiations, even to the point of parliamentary security officials initially trying to prevent reporters seeing who was on the negotiating teams. So much for transparency. The last thing the politicians want is for the people who elected them to know what decisions are being made on their behalf. They couldn’t be more brazen about the fact that the public is locked out of the game. We’re not even impotent spectators. It’s particularly ironic that Peters, who has presented himself throughout his political career as a man of the people, a party leader who refuses to play by the rules of the self-serving political establishment, should be at the very centre of all this.

Nothing I say here should be interpreted as a call for a return to the first-past-the-post system. But it’s time to face up to the fact that we replaced one imperfect system with another that was equally flawed, and at the very least we should be having a national conversation about whether there may be a better way.

Saturday, October 7, 2017

Mr 7.5 Percent makes the most of his intoxicating moment in the spotlight

(First published in The Dominion Post, October 6.)

As is well known, the MMP electoral system was created to ensure, as far as possible, that no party ended up wielding absolute power.

So far you’d have to say it has worked exactly as intended. In the eight elections since New Zealand adopted MMP, no one party has won an absolute majority. They have all had to compromise and negotiate with smaller coalition partners.

Now we find ourselves in the same position again. It should be familiar by now, yet something seems not quite right. What could it be?

Oh, that’s right – Winston Peters, the 7.5 Percent Man, is back in the mix, and making the most of his intoxicating moment in the spotlight.

He said he was out of phone range when Bill English called last Sunday. But what sort of party leader goes bush, leaving his phone unattended, when he’s in the hot seat and the country is waiting for a government to be formed?

Then there was his excuse that he was waiting for the 384,000 special votes to come in, as if these had the potential to skew the election night result by such an order of magnitude that any preliminary negotiations with other parties would be futile.

Peters wanted us to think he was delaying showing his hand out of respect for democracy, but I don’t think anyone was fooled. We’ve seen it all before.

If he truly respected democracy, he would acknowledge that his party pulled a measly 7.5 per cent of the vote and stop behaving like some sort of vainglorious potentate from Berzerkistan. Heck, he couldn’t even retain his own seat.

But this is Peters we’re talking about. The “h” word that comes between “humidify” and “hummingbird” in most dictionaries apparently doesn’t exist in the edition on Peters’ bookshelf.

Perhaps MMP works best when you have politicians who are prepared to be conciliatory, to compromise and to make concessions. The Germans seem to manage it.

Unfortunately, Peters is not one of those politicians. Bluster and demagoguery, rather than consensus, is his default setting.

Politically, he’s a living fossil: a relic of Muldoonism, with all its bullying, divisiveness and ad hoc state interventionism. From the time he first entered Parliament in 1978, his career has been marked by fractiousness and petulance. He is a settler of scores and a bearer of grudges.

Some of his policy ideas – reinstating the old Forest Service, introducing a police “flying squad”, legislating to ensure free-to-air coverage of major sporting events – appear designed to exploit the nostalgic yearning of his ageing supporters for New Zealand the way they remember it.

Peters is a political Doctor Who, inviting us to join him in the Tardis for a trip back to a simpler time when an all-powerful state pretended it could solve complex problems with the pull of a lever. Look where that got us.

I said at the start of this column that MMP is working exactly as intended. Does this mean it’s a good system? Not at all. It’s a dog that replaced a turkey.

We weren’t sure at the time that we wanted a dog. All we knew is that we desperately wanted to get rid of the turkey, and a highly motivated lobbying campaign convinced us – by a less than overwhelming majority, incidentally – that the dog would do the job better.

And so we ended up with a system in which a vain and egotistical politician whose party got 7.5 per cent of the vote determines who the next government will be; and where every solemn pledge made during the election campaign is now up for negotiation in a secret process that voters have no control over or input into.

We could, however, do a few things to make the best of a bad situation. For one thing, the media could stop stoking Peters’ already rampant ego by not giving him daily opportunities to grandstand. And let’s stop treating the post-election guessing game as some sort of diverting spectator sport or reality TV show. We’re talking about the future of the country, for heaven’s sake.

Oh, and here’s another suggestion that might negate the Peters problem altogether.

You’d think that if any party “got” MMP, it would be the Greens. But at the very suggestion of a deal with National, they clutch at their skirts like startled virgins.

Well, Labour has never invited them into bed. If promiscuity is the price for getting some runs on the board, perhaps they should forget about virtue and get their knickers off.

Thursday, October 5, 2017

We were sold a crock in 1993

(First published in the Manawatu Standard and Nelson Mail, October 4).

Anyone having second thoughts about MMP?

I’ve argued for years that we swapped one set of flaws for another when we voted in 1993 to change the electoral system. The events of the past 10 days have done nothing to reverse that perception.

An obvious problem with the old first-past-the-post system was that a party could win power even without a majority of votes, since it was the number of parliamentary seats won, rather than total votes, that determined who governed.

Thus National got fewer votes than Labour in 1978 and 1981 yet remained in government – a situation analogous with last year’s presidential election in the United States, in which Hillary Clinton won nearly 3 million more votes than Donald Trump but was unsuccessful because Trump prevailed in a majority of states.

The other main reason for dissatisfaction with our version of FPP was that third parties never got a look in. Even with 21 per cent of the vote, the now-defunct Social Credit party won only two seats in the 92-seat Parliament in 1981. 

But it wasn’t so much dissatisfaction with the undemocratic nature of the FFP system that caused voters to rebel against it in the 1990s. After all, we’d been happy with it for 90 years. Besides, it’s still practised in Britain, Canada and the US.

No, what really enabled agitators for electoral reform to gain traction was the widespread perception that once in power, parties reneged on promises and generally couldn’t be trusted to do what voters had asked for.

The theory was that by denying absolute power to any one party – in effect, requiring parties to negotiate and compromise on key policies – the MMP system would force governments to become more accountable and consensus-driven.

A bonus was that by giving greater power to minor parties, MMP would deliver more diverse representation in Parliament.

At least that was the theory, and to some extent it has been proved right.

Under MMP, we have certainly had far more diverse parliaments.  The two-party duopoly has been broken, opening the way for a much wider range of ideological positions and agendas to be represented in Parliament, from the old-style populist Muldoonism of New Zealand First through to the environmentally driven Greens and the race-based sectional interests of the Maori Party.

But has MMP delivered greater accountability, as its idealistic (and mostly left-wing) promoters promised? Hmmm. That’s another matter entirely.

Here we encounter two problems. The first is that under MMP, 49 of the 121 MPs in Parliament are not directly accountable to voters. They are elected on the all-important party lists and have no constituents to answer to.

Rather, they owe their loyalty to the party organisation, on which they depend for their ranking on the lists and therefore for their career prospects. In other words, it’s system that prioritises loyalty to the party over any obligations to voters. Accountability? Pffft.

But arguably an even bigger flaw is the one that we again see in play following the recent election.

Not for the first time, New Zealand finds itself at the mercy of New Zealand First and its vain and fractious leader, Winston Peters. A man whose party won only 7.5 per cent of the vote on election day will determine who governs us for the next three years.

Whatever this is, it’s not democracy. It’s a travesty, and it’s made worse by Peters’ egotistical posturing.

The New Zealand First leader failed to respond to a phone call on Sunday night from National leader Bill English, whose party won six times more support than his own, Although Peters did return the call the following day, I believe he was letting English know who’s boss.

But even without a rogue politician like Peters in the mix, the system is deeply – perhaps fatally – flawed. Because regardless of the result on election day, all bets are off once the votes are in.

At that stage the public cedes total control to the politicians, who disappear behind closed doors to decide which of the policies they campaigned on can be jettisoned and which bottom lines no longer matter. We, the voters, have no power to influence what concessions will be made in coalition negotiations.

Whatever this is, it’s not democracy. Accountability? Pffft again.

The almost comical paradox is that the MMP system, which supposedly returned power to the people, is virtually guaranteed to produce a result where one or more minor parties end up wielding influence grossly disproportionate to their public support, and where politicians have carte blanche to wheel and deal without reference to the public.

Apologists for MMP (former prime minister Sir Geoffrey Palmer is one) continue to make excuses for its failings and to pretend that it’s fit for purpose.

The politicians have become thoroughly acclimatised to it too and either fail to see, or don’t want to see, its fatal flaws. But I reckon we were sold a crock in 1993, and I want my money back.

Wednesday, October 4, 2017

Post-election hiatus illustrates the perversity of MMP

(First published in The Spectator Australia, September 30).

The only thing that can be said with any certainty about the next New Zealand government is that it will look very different from the last one.

National party prime minister Bill English won an emphatic 13-seat majority over the opposition Labour party at the weekend in an election result that defied the pattern of history. But the vagaries of New Zealand’s mixed-member proportional electoral system mean it could be weeks before the shape of the new government is finalised, and no one can be sure what form it will take. Paradoxically, it may not include the National party.

Not for the first time, New Zealand finds itself at the mercy of the relatively small New Zealand First party (yes, it’s as nationalistic as the name implies) and its fractious leader, Winston Peters. That’s because despite winning 46 percent of the vote on election day, National doesn’t have the numbers to govern on its own. Three of the minnow parties that supported the government in its previous term crashed and burned, forcing English to look elsewhere for a deal that will give him a parliamentary majority.

That unavoidably leads him to Peters’ door, since the support of New Zealand First’s nine MPs would enable English to form a government. But the two parties of the centre-left, Labour and the Greens, are also courting Peters because his support would give them a one-seat majority – perhaps more, once 384,000 special votes are counted.

That puts Peters in the box seat, which is exactly where he likes to be. He will, in effect, determine the shape of the next government. No one knows what price he will demand in return for this, or what concessions the bigger parties will be prepared to make in order to humour him. Strangely, neither does anyone question the morality of a political system that allows a party leader to wield influence grossly disproportionate to his party’s share of the vote (7.5 percent).  But Peters can be expected to make the most of the situation. At 72, it may be his last shot at power.

It’s a situation that illustrates the perversity of the MMP system. Adopted in 1996 and modelled on the electoral system created in post-war Germany to ensure that no extremist party could again win total power as the Nazis did, MMP was promoted to Kiwi voters as a means of reasserting control over rogue politicians. In fact it turned out to be every bit as flawed as the first-past-the-post system it replaced.

Under MMP, voters are shut out of the game the moment the votes are in. Unless one party has an absolute majority, which hasn’t happened in any of the eight elections since MMP was introduced, the politicians then disappear behind closed doors to do whatever furtive horse-trading is necessary to cut a deal.

At that point, all bets are off. Every policy dangled in front of voters during the election campaign is effectively up for negotiation. What were solemnly declared on the campaign trail to be bottom lines become wondrously elastic or evaporate altogether. Voters have no influence over this process and can only await the outcome.

It doesn’t help that there are no clear constitutional conventions governing coalition arrangements. There’s a compelling moral argument that minor parties should first offer their support to whichever party has won the greatest number of votes. In this instance, that would clearly be National.

But politicians are free to interpret the rules in whichever way suits them. Labour and the Greens rationalise that because more people voted against National than voted for it, there’s a mandate for change – although it’s hard to imagine a potentially more fractured and dysfunctional coalition than one between Labour, the Greens and the socially conservative Peters party.

New Zealand has found itself in this predicament before, and it’s not a comfortable place to be. By instinct Peters is an attack politician, which helps explain why previous coalitions he has been part of – one with National, one with Labour – have ended acrimoniously.

He’s a true maverick: combative, polarising and capricious. He relies for support on a dwindling constituency of ageing voters who yearn for the reassuring certainties of the New Zealand they remember from the 1970s under authoritarian National prime minister Robert Muldoon, Peters’ role model. It was an era when New Zealand was comfortably monocultural and subject to suffocating state regulation.

So while English was nominally a clear winner on election night, he now has to curry favour with a politician whose support is smaller than National’s by a factor of six. He may even end up in opposition. It takes some of the shine off what was, in most respects, a signal victory.

English’s success was notable for two reasons. Conventional political wisdom decreed that the tide had gone out for National, since no New Zealand government had won a fourth term since 1969. A late resurgence by Labour, re-energised under its popular new leader Jacinda Ardern, reinforced a sense that New Zealand might be about to revert to the historical norm.

But English, the Catholic son of a South Island farming family, not only swam against the current of history. He also emerged from the shadow of former prime minister John Key, under whom he served as deputy and finance minister until Key’s surprise resignation last December.

In the Key government, English did the heavy lifting behind the scenes while the supposedly more charismatic Key took care of the public charm offensive. Although credited with guiding New Zealand safely through the global financial crisis, English wasn’t seen as either charismatic or populist. He partly reversed that perception during an election campaign in which he came across as genial and relaxed. But more important than that, he has erased the notion that National’s success in three elections was entirely due to Key’s personal popularity.

It would seem a cruelly ironic blow if, after accomplishing that, he ended up on the opposition benches putting questions to a 37-year-old Labour prime minister who has never held a cabinet post or even served in government. But under New Zealand’s topsy-turvy electoral system, and with a politician as contrary and unpredictable as Peters in the mix, it can’t be ruled out.