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New leadership team for ACT

Nothing matters more in New Zealand politics in 2014 than keeping Labour’s far-left and their Green and Mana supporters out of power.

Aspects of John Key’s National-led administration are deeply disappointing – most particularly, its penchant for intervention in support of ministers’ favourite companies, its lack of passion for radical education, health and welfare reform, and its unwillingness to move to a flat income-tax regime.

Still, Bill English’s goldilocks fiscal policy – neither too contractionary following the horrifying deficits after the GFC and Christchurch earthquakes, nor so expansionary as to drive inflation – has, along with some liberalisation of the labour market and welfare systems by Simon Bridges and Paula Bennett, positioned New Zealand beautifully to be the rock-star economy of the OECD.

Growth will be among the highest in the world, unemployment is low and will keep falling, wages are already rising, and inflation and interest rates are likely to remain relatively low and manageable.

A Labour government led by Mike Moore, Helen Clark, Phil Goff or David Shearer could be expected to swing left but remain in the mainstream of the developed world.

In contrast, while officials attending Cabinet committees in the 2000s say David Cunliffe would reliably take the most right-wing position of any of Ms Clark’s ministers, he has been propelled into Labour’s leadership by the unions and the left of his party’s membership.

Far-left Cunliffe
Labour-aligned commentators claim that Mr Cunliffe’s rhetorical swing to the left was done merely to win the top job.  They claim his strategy is the same as a US candidate pandering to the extremes in a primary before running from the centre in the general election – but this is to make a comparison error between the two systems.

In the US, once a president, senator or representative is elected, they remain constitutionally secure in the job.  Mr Cunliffe’s hold on Labour’s leadership and the prime ministership would remain dependent on the support of those who put him there.

He would be forced to run a government more left wing than any since Norman Kirk’s, not even taking into account that his parliamentary majority would depend on further on-going concessions to the Greens and Mana.

His promise to his backers to end the so-called neoliberal policies of the last thirty years means he is not rejecting just the approach of the Lange, Bolger and Key governments, but implicitly smearing Ms Clark as a puppet of the top 1%.

Mr Key’s government is certainly the most interventionist since Muldoon’s but there is no comparison with what Mr Cunliffe is offering.  Reading the musings of his most dedicated party supporters suggests there is no economic model outside Venezuela that would satisfy them.

Coalition options
Immediately following Mr Cunliffe’s accession to the leadership, it appeared Labour’s gamble had paid off.  However, his failure to live up to his initial promise has put Mr Key back in serious contention for what will be the closest and nastiest election in my lifetime, and the first since 1984 offering radically different futures.

The threat to Mr Key, well canvassed over the last two years, is his lack of coalition partners, to the extent that some in National have pondered Winston Peters.

The Maori Party faces challenges as its founders retire and as a result of the compromises it has had to make with its much larger partner.  In any case, were it to genuinely hold the balance of power, it is difficult to see how it could survive opting for National over Labour.

For its part, UnitedFuture has benefited from recent boundary changes so Peter Dunne will probably be back, but there is no chance he will bring in a second MP.  The Conservative Party, while viable, is unlikely to beat the 4.33% won by the Christian Coalition in 1996 and its social attitudes mean it is not necessarily a good fit with Mr Key’s National anyway.

Which brings us to ACT, or an ACT-like party.

Room on the right
Since its hopeless showing in 2011, my view has been that ACT will struggle to again win Epsom and that, in any case, a 1% party vote means it would make no difference to the overall parliamentary balance.  (ACT on 0% or 2% would both be better for the centre-right than 1%).

That has led to all sorts of discussions about a new political vehicle.  A column I wrote before Christmas fuelled speculation about what role I might want to play in such a new vehicle to the right of National.

The somewhat hyperbolic concept I had was Hong Kong for tax policy, Singapore for law and order, China for welfare and the Netherlands for personal freedoms, along with staunch opposition to corporate welfare and cronyism from either National or Labour.  The new party would be led by and reflect a new generation of classical liberals, who could put the neo back into neoliberal.  A few friends and colleagues urged me to go for it.  The majority said otherwise. I said I would think about it over summer and have discussions with those with similar ideas.

Tests for new party
The test I set for myself was that if I thought it was necessary to keep the Labour left, the Greens and Hone Harawira out of power I would do it, despite the objections of my family, which is adamantly opposed, and the risks to my business, which has a good year ahead given the election and booming economy.

I was clear in my own mind that a new political vehicle on the right would need to be supported by the remnants of Act and ideally those who devote time and energy to the Libertarianz.

The other option would be for me to join Act and run in Epsom, where I was born in 1972 and have lived ever since with the exception of overseas travel and working for the Bolger/Richardson government of the 1990s.

What I have learned over the summer is that those involved in Act will not let go of the party they have been committed to, in some cases, for nearly 20 years.  Seeking to establish a new political vehicle in the few months before the election campaign would cause enormous disruption and division on the right and would not serve the goal of keeping Labour’s far left out of power.

I concluded that those on the ideological ends of the political spectrum suffer from enough schisms already without them being added to by a new brand.  The decision became whether to join Act and seek the Epsom nomination. 

I am of the right generation to do this and I am certain I would win my home electorate, maintaining a classical liberal presence in parliament, which I believe is absolutely essential.  Nevertheless, my decision is no.

If ACT is to succeed in the longer run, it must more strongly differentiate itself from National, especially given the interventionist tendencies of the current regime, and it must be a genuine party, without any suggestion of being a subsidiary of the bigger brand.

The people to take it forward are those with history in the party, not ring-ins from National, like Don Brash, John Banks, Michelle Boag or me.  The fact that Steven Joyce – the symbol of the Muldoonist tendencies of the current government – has been reported to have tried to interfere in Act’s candidate selection processes sends all the wrong messages, regardless of whether it is true.

Act needs to stand on its own two feet, take pride in its history and move forward with its own next generation who see their primary role as ideologically combatting Muldoonism, not propping it up as a wholly-owned subsidiary of National’s.

Based on these criteria, Jamie Whyte is the right person to lead ACT and David Seymour – an Auckland Grammar old boy – the right person to stand for Epsom.  Both are undoubtedly ACT deep in their souls, not mere darker shades of National blue.  In their 40s and 30s, they are from an entirely different generation from Sir Roger Douglas, Alan and Jenny Gibbs, Craig Heatley, Richard Prebble, Don Brash, Ruth Richardson, John Banks, Michelle Boag, Catherine Isaac and even Rodney Hide.  They can put the neo back into neoliberal.  And I think they can win.

It falls on them to take the ACT message forward.  That means of course supporting a Key third term on confidence votes and keeping the far left out of power.  But most importantly, their mission is to make clear, when they enter parliament later this year, that National’s swing to Muldoonery must come to an end.

More by Matthew Hooton

Comments and questions

Would you accept a high place on the ACT list?


Does a coalition partner to the right of National really help, other than the electorate seats they might be able to win? Any party votes that Act wins are likely going to come out of National so the combined coalition has not changed. The only 'gain' is to play the MMP system by minimising wasted votes and getting electorate seats that are disproportionate to the party votes. The left has far greater capacity to do this given the Maori seats often have split voting between electorate seat and party votes and there are more Maori seats than Epsom and Ohariu.

It does help in some respects. I won't vote National due to their interventionist policies (although I understand why they feel that they need them; and would probably hold my nose and vote for them if that were the only way of keep Labour/Greens in opposition); in the absence of ACT my vote would be wasted on Libertarianz. Not sure how many people are of similar right-wing, libertarian persuasion but having ACT gives us somewhere more mainstream to put our tick.

What NZ Inc needs is someone like you with the balls to take on this role and be a real challenge to John Key and his parties interventionist policies.

Unfortunately you have taken the easy route - probably after more intervention from the National Party and some of its bullies.

That is sad but we all respect your decision and understand the risks you would have taken on had you stood alongside the Government and made them accountable - such a shame as you would have left a huge legacy for the future generations of your family .

Matthew, you wrote that the threat to Mr Key, is the lack of coalition partners for National.
THE REAL threat to Mr Key, and the prospect of NZ having a competent responsible government post 2014 election is... drum roll (Golden Globes day)....... the NZ Media!.
Key would have loved to remove some of the irresponsible legislation of the Clark and Lange era; but under MMP and the need for coalition partners it would be political suicide. Most of this bad legislation was the result of Clark's determination to remain in control through coalition partners and their blackmail demands.
The country now suffers, and will continue to do so, for the next twenty years. The last thing it needs is a Cunliffe government.
BUT I doubt that our mainstream media journalists and TV reporters, responsible enough to acknowledge this, and their part in promoting such an eventuality.

Mr Whyte is an articulate libertarian and a great writer. I am really looking forward to his arrival on the political scene.

This is going to be interesting.

Yes, it will be interesting to see the combination of party president and Epson candidate. Mr Whyte is, as you say, a great writer and articulate libertarian. But who'll be the face of ACT and where does Mr Seymour fit in?

Ideologically opposed though I am ACT (as I am to the Greens) I still acknowledge that they both need a place at the table of Government. I think you, Matthew, would have been a better choice for Epsom as you have enough of the brand recognition to be a credible candidate. The others, probably credible libertarians all, are just too unknown to have a chance.