Upton-on-line - Diaspora Edition
2nd August 2002
NZ General Election Special Issue
In this issue
…upton-on-line reflects on the consequences of the 2002 NZ General Election for the centre-right of politics. (Results
table on last page)
Disclosure of interest: that Simon Upton is a member of the NZ National Party is a matter of record. If it wasn’t, it
would certainly be one of his worst kept secrets. That said, upton-on-line is not a cheer sheet for any partisan
gathering. What follows are some preliminary thoughts by a centre-right voter living in what is the electoral equivalent
of Mars.
A political landscape filled with interest (unless you happen to be living in the bottom of the gullies in which case
it is a landscape filled with horrors)
The recent election has transformed the political landscape in a way that promises abundant opportunities for analysis,
conjecture and myth making. There has already been extensive domestic commentary (most acutely from the indefatigable Colin James). Upton-on-line, having missed all the interviews, audience approval ‘worms’ and political ploys, would not dare to
offer any verdicts from his satellite orbit (which is what observing the election from Paris has felt like).
The accepted wisdom seems to be that Helen Clark’s performance and positioning of Labour has given her peerless mastery of the MMP landscape. (As a former co-conspirator
with Clark in the then-doomed pro-FPP campaign of the mid-nineties, upton-on-line had harboured a sneaking hope that she
might pull off her quest for an out-right majority, thereby winning a mandate to re-open the debate on electoral reform.
That now seems as dead as the Dodo).
Those who claim Clark failed by winning ‘only’ 41% of the vote miss the point. It’s more than enough in MMP and her
timing was deadly for National. The Labour Party both in government post-1987 and again during Clark’s years in
Opposition experienced opinion poll plunges that caused dismay. (Upton-on-line recalls one poll that had Labour at 16%).
Clark knows just how devastating that can be for morale. Going to the polls early when National’s support was soft
maximised the chances of a downward spiral for National – and it worked.
Beyond Labour, the picture beamed back by remote sensing is one in which all parties seem to be more or less bathed in
sunlight – particularly Peter Dunne’s United Future Party and Winston Peters’ NZ First. The exception of course is National, which can only be dimly picked out in the gloomiest gullies.
Upton-on-line can offer neither a comprehensive nor an inside analysis. But as a gully-dweller he can offer some ideas
on what might be at stake in the centre-right of New Zealand politics.
[Diaspora readers can find a table of the final percentages at the end of this edition: the official results can be
found at www.electionresults.govt.nz]
The end of the broad church hegemony
One of the best-written pieces upton-on-line has come across is that by Michael Bassett in the Dominion earlier this week. For those not fated to awake to its pages each morning here are some key extracts.
Having outlined the thinning out of Labour’s support base, Bassett devotes the bulk of his analysis to National:
National's church, on the other hand, always accommodated a more diverse congregation. Throughout its history, farmers
rubbed shoulders uneasily with businessmen and upwardly mobile urban professionals. Issues like tariffs and protection
usually divided them. With the arrival of MMP a few took the opportunity to join ACT or the Christian parties, but
enough supporters remained faithful to make National strategists hesitate to redefine the party's position on MMP's
political spectrum. As a result, National's church contains as many pews as ever, but there are fewer bottoms on them,
as was clearly evident at Bill English's opening.
National is still searching for a coherent identity. The threat posed by the First Labour Government drew various
defenders of private enterprise to National's 1936 conference. It took time for the new party to settle down. But
eventually it adjusted easily to the welfare state in the 1950s and 1960s. Hosts of fair-weather friends turned
subsidies and regulations to their own ends under Sid Holland and Keith Holyoake. They padded out National's huge party
membership; it bestowed both status and opportunities upon them. Between 1949 and 1972 National was the dominant
political religion in New Zealand, ruling for all but three years.
However, when Britain joined the Common Market and European agricultural policies squeezed out New Zealand's produce,
our economy slowed then went into reverse. Robert Muldoon's regulatory sermons started grating on worshippers. As he
subsidised, regulated and fine-tuned like never before, growing numbers sidled out the church door. More exited over the
Springbok Tour, handing three Wellington seats to Labour in 1981. The following year, free enterprisers like Bob Jones
bolted over the Wage-Price Freeze, labelling Muldoon the country's leading socialist. Some heretics returned to National
in 1987 and 1990, but the party's ranks thinned to 35% of the vote in 1993. Three elections later they are thinner
still. Jim Bolger, Jenny Shipley, and now Bill English have exhorted them to come home. They show no inclination to do
so…
The cold hard reality of MMP is that it is designed for niche sects, not broad churches…
All this seems reasonably compelling. The interesting question is whether Bassett defines the right niche. Here is his
prescription:
This is crisis time for the Nats. Before they can attract back their lost congregation they will have to define their
niche within MMP, and sharpen the message. Make no mistake, there is a place in the market for policies based on
National's core free-enterprise principles. Moreover, there are enough bewildered voters milling around to respond to
solid leadership and credible policies. This is a conservative country not given to socialist experimentation, and
voters will always be on the lookout for a steady, reliable political vehicle. Why else Peter Dunne? Either National
engages in very tough soul searching and puts everything up for discussion, including the leadership, or it will end up
like the old Liberal Party which finally gave up the ghost in the 1930s, its last few parishioners straggling across to
National in 1936. Saturday night was either a new beginning, or the beginning of National's terminal phase.
The problem with this is the reference to National’s “core free-enterprise principles”. In truth, this is not where the
National Party’s core lies (although it has embraced such principles much more forthrightly since the mid-1980s – in
common with virtually every political party in the democratic world, more or less). The National Party’s core lay in
it’s being an anti-socialist party, not a free enterprise party. The market liberalism that Roger Douglas unleashed after 1984 (supported by Michael Bassett among others) was as alien to National as it was to Labour. Its
standard bearer today is the ACT party (bringing together as it does an amalgam of personalities from Labour and
National like Ken Shirley and Roger Douglas, Derek Quigley and Ruth Richardson).
A detour into political theory [which may be avoided by the faint of heart]
It is the cross-party reach of the market-liberal agenda that has fooled so many commentators into believing that the
same agenda must therefore represent a broad church. The evidence is, that in its undiluted form its following is no
wider than root-and-branch social democratic egalitarianism. Why is that? Upton-on-line is not a newsletter devoted to applied, amateur political theory. But some observations may not go amiss. Market
liberalism as it struck New Zealand in the 1980s came in a fairly undiluted form with one over-riding (though often
unspoken) justification: government failure. There was abundant evidence to support it amidst the wreckage of the Muldoon era. For most people, the empirical
evidence was good enough. But those moved to identify a theoretical premise with which to explain government failure
would rapidly have stumbled across the epistemological scepticism of the celebrated Austrian economist, Hayek.
Hayek’s hugely powerful insight – dating back to the middle years of the twentieth century – was that even if you wanted
a government to take command of the economy (and it was an era in which the twin stimuli of Soviet totalitarianism and
war-time emergencies in the West provided plenty of advocates), it simply could not assemble the information necessary
to replicate the trial and error experimentalism of dynamic markets. Planned economies would always under-perform over
time. In terms of economic planning, Hayek’s verdict has been not just vindicated but amplified in the face of
all-pervasive communications technologies that can easily outstrip even the most ruthless centralised bureaucracy or
pared-back democratic decision-making apparatus.
But scepticism alone is not a basis for public policy and a variety of other pieces of machinery have been bolted on to
Hayek’s core insights to provide them with a more ideological skeleton. In America, rights theories have buttressed Hayekian scepticism: not only do governments get lots of things wrong, but citizens possess rights –
both personal and in respect of property - that make it not just unwise but unjust for governments to commandeer
resources.
In a nation such as the USA, forever trapped within the prism of a founding constitution that gives primordial status to
such rights, the alliance of ideas is doubly potent – witness the vigour of libertarian think tanks there. But New
Zealand, while inheriting many attitudes to property that come out of the same Anglo-American common law stable, has
placed few constitutional constraints on the power of governments to commandeer resources – either by way of tax or
abridgement of property rights. Indeed, the opposite has applied with a long history of governmental activism. In such
an environment, Hayekian scepticism has lacked the support needed to make it free-standing.
More influential – but still of North American origin – is public choice theory , an out-growth of political economy that applies with considerable inventiveness, theories of economic motivation and
rationality to political and bureaucratic actors. Politicians gather votes and extract electoral rents subject to
exactly the same maximising calculus used by economic agents. Again, it is an idea with considerable intuitive appeal,
(most especially when applied to the machinations of the US Congress’ annual round of sharing round the budgetary pork).
Whether all political motivation can be described in these terms and the extent to which this can be a basis for public
policy is another matter. But it certainly featured prominently in the minds of policy trailblazers during the white
heat of the market-liberal revolution in New Zealand.
Ideological liberalism
In short, where Hayekian thinking injected scepticism about the tractability of government action, public choice theory
injected scepticism of political agency. What is unusual about the New Zealand experience is the extent to which these
parallel scepticisms took root. In upton-on-line’s view they took on, in some quarters, an ideological colour that
transformed them from useful analytical lenses into a priori fixed points. The result was, on the one hand, a tendency
always to assume government failure regardless of the evidence and on the other a reflex cynicism about political
motivation that became highly corrosive of trust in even the most abstinent politicians.
Upton-on-line’s hunch is that the strength of scepticism and cynicism he witnessed was anchored in a much more
ideologically potent attachment to limitations on state power as the corollary of individually held rights. This would
all be the subject of an interesting seminar. Here, upton-on-line confines himself to two observations:
That the thorough-going nature of the scepticism described above contributed to a general corrosion in public
confidence that politicians could ever hold to something which previous generations would have described as the ‘public
interest’; and
That the belief in government failure became so pervasive that over the 1984–1996 period, notwithstanding many areas
of regulatory intervention, many citizens associated incumbent governments with wilful inaction in the face of policy
failures.
The perception arose that there was an ideological rather than an empirical reluctance by governments to intervene. To
this might be added a further observation: with the enthusiasm for more-market liberalism in palpable decline from the
early ‘nineties onwards, the home for its most committed enthusiasts became ACT – a party that, not coincidentally,
places far more emphasis on the rights-based critique of political association described above in respect of America. In
short, it has become the repository for ideological liberalism.
What does this mean for the centre-right?
In upton-on-line’s view, the 5-10% of the electorate that ACT can muster is about as far as this constituency extends in
New Zealand. It comes as much from old Labour as it does from old National. Now it might be argued that that’s quite a
tidy way of setting about dividing up the votes in the MMP world. Provide a home for those who yearn for a more or less
liberal/libertarian settlement and then leave a party like National free to apply a more conservative, instinctive
embrace of the market order that limits redistribution and market interference according to political acceptability and
a case by case examination of the facts.
The trouble with this, is that such an approach now covers the entire spectrum leftwards of ACT with the possible
exception of the nearly extinct Anderton Party and the very extinct looking Alliance. In other words, National is now
fighting to distinguish itself on broad economic issues from a very motley crowd all of whom, at the end of the day, are
going to be constrained both electorally and by financial markets from putting up taxes and none of whom have much
confidence in new state-led commercial ventures. (Upton-on-line accepts that the Kiwi Bank and the compulsory super fund
amount to significant exceptions, the latter it must be said hungrily embraced by the funds managers who stand to
benefit from it).
But that does not indicate a return to past straightjackets. Indeed, Labour could spike any tax guns left in National’s
arsenal with a single devastating move: Michael Cullen may not have earned many friends by imposing a 39 cent personal income tax rate. Without jettisoning it, he would only
have to increase the threshold at which it cuts in to, say, $120,000 (much less than a ministerial salary) to make a
significant number of middle class voters very happy.
On the social front National can find more room for differentiation but its only obvious coalition partner, ACT, is seen
to be ideologically opposed to state intervention with all the ammunition that provides to an incumbent government
committed to guarantees of social security. It’s the old left/right debate only, unlike FPP days, the ideological thorn
is alive, well and visibly poised to frighten the horses where in the past it was safely hidden inside the National
caucus in the shape of people like Jack Luxton.
Upton-on-line’s provisional conclusion is that market differentiation as urged by Michael Bassett is not viable on
traditional economic grounds. Being an anti-socialist party has lost a lot of its street cred and being positively
libertarian has limited appeal.
Is there anything left in the brand?
The question remains whether National can salvage a constituency by thinking hard about what its brand means. In another
age, the implicit claim to represent the national interest as against sectional or class interests was just about
unbeatable. But in 2002 there are those who would argue, quite cogently, that in a world of simultaneous globalisation,
regionalisation and localisation (with virtual communities being created without reference to any acknowledged
geo-political boundaries), appeal to national interests is passé.
Upton-on-line is distinctly sceptical about this view. Even if it is true in Belgium or Denmark, Puerto Rico or
Indonesia, there is an insular unity about New Zealand. We’re all in the same canoe and there aren’t any others nearby
(indeed we’re more like an outrigger that’s been progressively breaking loose). New Zealanders will either get on with
one another or fight one another: there is no larger comfort blanket under which to diffuse the tensions.
It is here that upton-on-line can see two possibilities that require any government to articulate a ‘national’ as
distinct from an ideological or sectional interest: one concerns the basis of our constitutional arrangements (for which
read the Treaty and the basis on which New Zealanders live in their own country and welcome newcomers). The other is our
relationship with the rest of the world (which in the first place means Australia). Both issues remain muddy, poorly
understood by most parliamentarians (let alone voters) and both have the potential, wrongly handled, to wreck New
Zealand on reefs of unrest and growing isolation (respectively).
On the first issue, National has a chance to reject roundly Winston Peters’ xenophobia (which is balanced by the view of
many that New Zealand needs more people, not fewer) while at the same time being responsibly receptive to the many
worried people who see fashionable bi-culturalism as an inexorable road to divided sovereignty and internal conflict. On
the second, a two-decade long deterioration in trans-Tasman relations is crying out for attention. But National – along
with the entire political establishment – has done little foreign affairs homework in living memory (this year’s select
committee report was a welcome exception). An opportunity exists but it can’t be taken without a lot of very hard
homework over a period of years – homework that National has shown little stomach for.
Is there a conservative subtext?
Appeals to the national interest are, however mounted, contestable. If National needs an antidote to ideological
liberalism – or merely a leavening agent – is there some species of conservatism lying around in some long forgotten
philosophical cupboard somewhere? The British Conservative Party has not always hewn to a conservative line. In
Disraeli’s time it was progressive, in Austin Chamberlain’s time imperialistic and in Thatcher’s time iconoclastically
liberal. But there has throughout been a respect for the unplanned, organic institutions that breath civility and order
into society (be they church, family or traditional modes of conduct). At times, this sense of both the resilience and
the fragility of the human condition has achieved serious philosophical expression – witness the writings of someone
like Oakeshott.
But there has been no presence in New Zealand academic or literary circles that has given resonance to these themes. If
the National Party were to define itself as conservative it would face two problems. One would be a competitive one. ACT
aside, all the other political players could argue that they were more or less ‘conservative’ – certainly there is
plenty in Peters’ and Dunne’s voting records to support that; but so too can Helen Clark claim to be a conservative
having pressed the pause button after the policy upheavals of one and a half decades. More acutely, National would be
hard pressed to articulate what it was claiming to conserve. Some of its supporters still pine for the policy radicalism
of the Douglas/Richardson era. Many are openly hostile to the most emotionally rooted force for conservatism in New
Zealand society – protection of the physical environment.
One suspects that this path would, without a great deal of soul searching, yield little more than a thin gruel of
priggish, social moralism. And there’s plenty of competition for that ground in the centre-right of the political
spectrum.
It’s not the philosophy, stupid
The danger of the foregoing analysis is that it is a prescription for policy wonks. And that what counts in an intensely
mediatised age is the attitude, personality and charisma of political leadership. After all, if we are living after the
end of history and ideology has evaporated as a polarising force in political debate, there are only personalities left
aren’t there? As readers of this newsletter will know, upton-on-line is deeply sceptical of this sort of analysis. But
there is no doubting the importance of leadership qualities other things being (broadly) equal.
Colin James has provided the most penetrating analyses of political leaders in recent weeks and his assessment of Bill English has been especially intriguing. James has (unlike many of upton-on-line’s correspondents) recognised all along
English’s intellectual calibre. (As readers will be aware, upton-on-line considers English to be the most able political
mind he worked with in the last decade). But it carries a downside. Here are some excerpts from James’ recent NZ Herald
portrait:
“But subtle intellects often don’t make sharp opposition … and his intrigue with the broad sweep and the long view has
given Mr English a serious political disability: he sees all sides of an argument ...
“It doesn’t help Mr English that he sometimes laces his asides with irony, which a listener can miss and thereby mistake
his meaning …
“Mr English does not flash cold steel. People do not see the affable fellow through a screen of power. He is ‘one of
us’, oozes likeability, a laid-back lizard on a sunny rock.”
That laid-back quality is deceptive as James identifies:
“Journalists trailing him on the campaign have marvelled he has kept calm and chipper as the polls have dived. That is
because he is deeply and securely centred …[h]is inner security makes him tough. He can ride out storms that would
flatten a less well brought-up lad. Yes, he can lose his rag. But he does not lose his balance.
“Yet he is judged weak. He is not.”
English must find this sort of surgical dissection of his persona excruciating. But he is lucky that someone has
attempted it for him. He has now only to prove it.
In upton-on-line’s view he is the only person at the present time who has the qualities and experience to stage a
comeback for National. He has only been in the job 9 months, he has generated no strong negatives and has the serenity
needed to cope with the trauma – and jump back into the fray. And in the past, a stellar personal performance would have
been all that was required to claw back the lost ground. But it is no longer solely within English’s control, something
National supporters are finding so hard to come to grips with in the MMP environment.
A traffic jam in the right hand lane
Which takes us back to Michael Bassett’s analysis of the chilling effect of MMP on broad church parties. Having lost its
hegemony over the one third of the electorate that National used to consider its irreducible minimum, it is hard to see
how it can effectively regain a controlling interest from such a minority position. How bleak its prospects are depends
in large part on Peter Dunne’s performance. If the United Future party fails to gain traction, a sure-footed performance
by English could yet claw back to that 30-ish% ledge. If it doesn’t, things are much more problematic – not just for
National but for the entire centre-right. Four parties is just too many and even if Dunne decided to be a stable partner
with Labour, plausible molecular bonds between the remaining three parties are just not evident. The policy and personal
chemistry on offer is just too reactive. The electorate will be very wary about giving a mandate to such a volatile
political compound.
Commentators have been scrabbling back into the history books to investigate the demise of the conservatives in 1906 and
the liberals in the 1930s. It is hard to draw parallels but by no means absurd. If there is an overly polarised traffic
jam on the centre-right and every prospect of long-term hegemony by the social democratic centre-left, people are
inevitably going to think about trying to simplify the field.
Clearly, as the overwhelming loser, National is not at this point in a position to invite either United Future or ACT to
fold up their tents at the very moment they’ve re-gained electoral oxygen. NZ First will survive as long as Peters is
around and that could be a very long time. Yet if National were to evaporate and allow its votes to find their way to
United Future, ACT or whoever, there is no reason to believe that the centre-right would be any more potent. Indeed, the
collapse of the largest and best-established party could well see many middle NZ voters flock to Labour as a familiar,
steady vessel in a sea of lifeboats.
To some extent it comes back to the relative strength of the brands in a market that just doesn’t seem to be able to
grow itself. As indicated above, upton-on-line still considers the National ‘brand’ has resonance on some of the big
issues that will make or break New Zealand. And he doubts whether, if it were liquidated, the ACT brand would have
significantly wider pulling power than it is presently able to demonstrate. Labour’s great success has been its ability
to eliminate the hard left by a mixture of embrace and then rejection. There is no destructive, ideological conscience
seen to be operating to the detriment of politically savvy government.
Applying that logic to the centre-right would indicate the merger of National and ACT, if necessary under a new banner,
but more importantly in a way that removes the spectre of a submerged, radical agenda that is waiting to pounce. As Lailla Harre and the remnants of the old Alliance proved, ideologists are more concerned with ideology than with winning. One
suspects that applies as much on the libertarian right as it does on the collectivist left. But if the centre right
wants to be anything other than a makeshift government should Labour stumble, it has to be electable within the
mainstream political culture of the country.
Controlling the commanding heights
Upton-on-line has watched with fascination the collapse of two multi-party coalitions here in Europe – the Netherlands’ Violet Coalition and France’s Gauche Plurielle. In both cases they were constructed on the ruins of fragmented and fractious parties of the right that had long
dominated their national politics. There are no safe parallels to be drawn, but it does seem that an electorate will
tolerate multi-party government as long as times are good and the shenanigans are kept under control. Those are two
variables which are just about impossible to engineer for very long. You can’t hold the castle if everybody has left the
watch to debate the roster.
And that is Clark’s overwhelming luxury. She has a big enough occupying force to control the terrain provided her
management is even half-good (and it has frequently been better than that). Even if the world economy goes seriously
sour, she can plausibly present her team as the guarantors of security in a troubled world. As it was, Labour’s ability
to win the party vote even in safe National seats suggests National voters were in some cases voting Labour in the
interests of perceived stability. (The corollary is that Labour’s core vote is significantly smaller than the 41% it
received – one of the few silver linings in the clouds Bill English faces).
To pose a credible, serious challenge, the centre-right has not only to pray (as all Opposition’s secretly do) for
difficult times for the Government: it has to re-group as a more plausible and resonant home for at least 45% of voters.
That’s a very tall order – and it won’t be achieved with four rancorous parties each trying to prove that it should be
claiming leadership of the pack.
Time for sober reflection
It is no time for anyone on the centre-right to be sentimental about what might have been. In the interests of a stable
democracy with high quality opposition, some hard-thinking is needed and a good dose of humility all round – even from
the putative ‘winners’. MMP has irrevocably changed the game. But the life and death issues for this small, isolated,
developed but not so rich country with unique constitutional, demographic and foreign policy challenges, remain the
same. And if they’re not mastered it won’t just be the gullies that are flooded.
The Result
Party 1999 2002 +/- %
Labour
38.7
41.4
+2.7
National
30.5
21.1
-9.4
NZ First
4.3
10.6
+6.3
ACT
7.0
7.1
+0.1
United Future
1.7
6.8
+5.1
Green
5.2
6.5
+1.3
Alliance/PCoalitio
7.7
3.0
-4.7
Some additional interesting facts:
In the Maori seats, Labour took 55% of the vote, NZ First still claimed 15% and the Greens 10%.
National only carried the party vote in 4 of the constituency seats it won.
NZ First hit 23% of the vote in the Bay of Plenty.
The combined centre-left parties (L, G, PC) collected 51% to the centre-right’s 47% (N, ACT, NZF, UF). (The other 2% of
party votes being unclassifiable for ideological purposes!)