Finding National's centre of gravity

This month there will be much reminiscing on the 20th anniversary of the election of the fourth Labour government which turned this country inside out. But there is a 30th anniversary the National party might recall as it gathers for its conference on 9 July.

It was on that day in 1974 that Sir Robert Muldoon was elected National’s leader. It was a fateful appointment. The party is only now emerging from the after-effects.

The 1984-90 Labour government elected on 14 July 1984 undid much of what Muldoon stood for. It was helped in that by the fact that Muldoon, Finance Minister for more than 14 years, stood so resolutely — pig-headedly — for security at any price.

In the end the world stumped him. After Muldoon, any government had nowhere to turn but to deregulation.

But what a deregulation! For a time this country was an international case study in market-led economics: fast unilateral reduction of protection, light-handed regulation of most internal activities, a clean and simple tax system with next-to-no subsidies, sales of state assets, “price signals” clearly visible and “moral hazard” held at bay with co-payments by users of government services.

It caused wide social disruption and dismay but also doubled productivity growth and arrested the relative economic decline. In economic terms it was stunningly successful — as far as it went.

This qualifier can be read two ways.

Don Brash argues the programme is uncompleted and the next step to higher productivity growth requires lower taxes, more deregulation, government spending cuts and more individual responsibility for at least some of what the government now provides.

Michael Cullen accepts some of the deregulation did good but says it was not sufficient. Government action is needed: hence, for example, $30 million in the Budget in May to promote “productivity” at the firm level, which is the key to real wage rises, a hard fact at last dawning on some unionists.

But Labour’s preoccupation is with redistributing wealth and opportunity, not economic growth — witness backbenchers’ emotional response to May’s highly redistributive Budget.

Muldoon did not share this preoccupation. That is why, though obsessed with security which caused some to label him “socialist”, he was in National, not Labour.

But he took National off track. Barry Gustafson, National’s historian and Muldoon’s biographer, wrote about the distaste traditional Nationalists felt toward the new sort of (downmarket) person who flocked into the party endorsing Muldoon’s “ordinary bloke” populism. Some even became MPs.

Those MPs departed when the party swung abruptly from populism to radicalism in the Ruth Richardson years. Her few years of influence after 1989 wrecked the party’s standing with middle New Zealand. National limped through the 1990s, veering between market-liberalism and centrist conservatism, never finding its feet.

Then came Helen Clark’s bid for the centre in the early 2000s. National’s radical-versus-centrist vacillations continued. The 2002 policy was a mess.

Now at last, 30 years on from Muldoon’s election to leader, National looks to be starting to find its feet. Paradoxically, that is due in large part to Brash, who is much guided politically by Richardson.

Brash brought National to middle New Zealand’s notice with just one speech on race in January. It was not so much what he said, though that struck a chord, as the way he said it, with authority and transparent believability.

New members and money have flowed in. The new candidates college is humming. The regional conferences in May were buzzing. National is back as a mainstream party confident it is at last back over 35% for the first time since 1990.

The next step is to recover the centre of gravity. That is not radical Richardsonian economics, still less Muldoonian populism. It is, as it was in its heyday, a healthy interplay between liberal and conservative.

This is not the same as the fudge and small-target politics that has passed for “strategy” since Brash’s race speech. A liberal-conservative party instinctively understands and connects with middle New Zealand, with a bias mildly in favour of market economics and individual self-reliance.

Brash is a novice at politics and not knowledgeable about much outside market economics. But he has a handful of MPs — Bill English, Katherine Rich, Simon Power and John Key — who could help him develop the nucleus of a liberal-conservative policy platform.

That tone has been absent or muted for 30 years. Twenty years after Muldoon’s overthrow, the real National party may be on the way back. If Brash heeds history.