No left majority. So what's in store for business?

Much less left legislation, much more opportunity to influence bills and maybe a 30 per cent company tax rate: that is the outlook for business if a Labour-led government is formed.

Of course, if National overtakes Labour on the home stretch, the issue will be how much National’s right-leaning initiatives, and especially its tax policies, are modified. But as of yesterday, the odds seemed still to lie with Labour.

Helen Clark no longer has a built-in left majority because the Greens get her only to 57 votes, the Maori party has yet to develop a coherent policy positioning and in any case some Maori party MPs are nearer National than Labour on some issues.

And, very important, National is much stronger. That extra weight will be felt not just on the floor of the House but in the select committees where the detailed work is done on bills.

So it will not be business as usual for Clark. And business will have much more to play for — perhaps even a 30 per cent company tax rate.

Even if (or when) New Zealand First signs up to supply a majority on confidence-and-supply votes, that does not greatly lengthen the leash voters put on the government in the election. New Zealand First scorns many of Labour’s stances, such as on free trade, moral issues, immigration and crime.

New Zealand First does share some of Labour’s social assistance concerns, particularly for the old and the less-well-off — a $12 minimum wage rate, for example. It is largely aligned on education through once-Labour Brian Donnelly. And it has agreed with Labour on some workplace regulation. Much of that is not good for business.

But, as Clark found in 1996 when Jim Bolger gazumped her in the coalition bidding, Peters is tribal National deep down, going back to the 1970s when he first stood for the party.

That is potentially good for business in some respects: for example he backs an “immediate” 30 per cent company tax rate.

Nevertheless, Labour optimists for a stable three years believe there may be a “new” Peters, seeking to overturn, through reliability and consistency, the reputation for failure and inconstancy his 1996-98 coalition with National earned him. They point to his constructive help over the Cullen fund legislation in the first term and the Foreshore and Seabed Act in the second. They note his relentless attacks on National since Don Brash became leader.

So perhaps this “new” Peters might want still to be bringing home new bacon in the 2008 Budget to his core constituency to strengthen his re-election bid.

But a spectre for Peters is United Future’s experience up close to Labour in 2002-05 while Parliament liberalised moral laws that were anathema to many of its backers. That cost it votes. Peters cannot afford to lose votes. So, Labour’s pessimists think, he may not see out the full three years.

But United Future also points a way through for him. It voted against a large number of bills and so did, in fact, keep faith with its voters. New Zealand First could do that — and Peters is far better than Peter Dunne at publicising his party.

It was the Greens who provided the majority for much of Labour’s left-leaning workplace, social and moral legislation in 2002-05.

For such “ideological” legislation there is no majority now, unless the Maori party can be persuaded. So business can rest more easy.

Not that it matters much. Labour has legislated most of its 1999 agenda. Mostly the government will not be initiating new programmes but continuing programmes already in train and that doesn’t need new parliamentary sanction. It will largely be in “managerial” mode.

Exceptions include:

* the carbon tax underpinning the Kyoto protocol, for which there may not now be a majority;

* the Marine Reserves Bill, making it easier to set up marine reserves, which is opposed by at least National, United Future and ACT;

* the legislation for Steve Maharey’s single core benefit, due next year, for which support is uncertain;

* a list of new workplace controls promised in the election campaign but already conceded as unlikely by some leading unionists and Labour ministers.

Might opposition parties foist new policy on the government? For example, there is now a majority for at least modest tax cuts. While the government can simply rule out bills and amendments which increase spending or reduce revenue, if it uses that blunt weapon too often it may eat up political capital it needs to bargain for support on bills generally.

A major tax bill before Parliament when it was dissolved for the election should pass, even though National initially opposed it because it left personal tax rates unchanged. It is, among other things, aimed at reducing compliance costs for small business, simplifying fringe benefit tax and lifting the threshold above which assets have to be depreciated instead of expensed.

But other bills may not pass or will pass only if substantially amended. Labour may not have much ideological legislation in its locker but it does bring a regulatory instinct to managerial legislation intended to fix problems as they arise or tidy up some loose ends.

Leaky homes brought a sledgehammer response in the Building Act. A tidy-up of the law governing the way electricians, plumbers, gasfitters and drainlayers work produced the Energy Safety Review Bill earlier this year, which, though approved by the EnergySafe project of 40 people from 30 organisations, was criticised by some in the industry as too intrusive and likely to add significantly to costs.

Other contentious bills before Parliament when the election was called included:

* the Climate Change Response Amendment Bill dealing with carbon sequestration in forests, which National, ACT and New Zealand First all oppose; and

* the Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill, which groups approvals but also, controversially, brings waste into the regime.

The point about these bills — and others like them in the future — is that they are not sure things.

In part that is because National is much stronger, both in numbers and quality, and that will be especially felt in select committees, where the detailed work on bills is done. Expect National to make life much more difficult for Clark — to force changes in bills, force delays, lever tradeoffs and generally slow the parliamentary process.

MMP governments’ lack of a majority on most committees — some are chaired by opposition MPs — had already led to committees heeding evidence and changing bills accordingly. Fewer if any, committees this term will have a Labour-Progressive-Green majority and so change is even more likely.

So it will be worth business lobbying the parties — all of them — and making submissions to committees. It might well change the course of legislation.

Labour’s third term is not business as usual.