Crisis! Time to Act (for some)

Don’t waste a good crisis. Bill English and Rodney Hide agree on that. Canterbury’s woe has a political upside for activists.

Hide has his own crisis: a party short on unity with an election coming. Act’s conference this coming weekend will be an early test.

English has a long-term restructuring aim, which the earthquake might now advance. John Key is nearer that thinking than a year ago.

Both are losing a valued crew member, Simon Power: level headed, reliable, super-organised, decisive, courteous, self-assured without arrogance; a liberal who played a straight cabinet loyalist’s bat once the decision was made on the hardline three-strikes law Act says he opposed; a reformer who could face down a huffy legal establishment; a believer in addressing the drivers of crime who could nevertheless compromise on short-measures in a quarter-measure cabinet; in short a man of the golden mean, an almost perfect deputy leader in due course.

Key declared himself “stunned”: a mini-quake amidst the Canterbury macro-shock.

The post-Canterbury story last week was about whether to do some things that were on English’s list in mid-2008 but taken off because focus groups frightened Key then.

Both interest-free student loans and limits to Working for Families were among them. The issue now is whether to part-compensate for the fiscal hit of the earthquake by doing some things the government would like to do anyway.

That in turn raises a deeper question of how far such compensation should go, given that the earthquake is a singular event, not a permanent cut in the economic growth rate.

That is where another possible loss for Key comes in on the periphery: Act.

Hide and deputy leader John Boscawen devoted speeches last week in part to pushing a much smaller government.

Boscawen: “This (earthquake) is an opportunity we cannot afford to lose.”

Hide: “We need to change the political dynamic” to “control government spending.”

Boscawen: “If New Zealand could just reduce government expenditure back to where it was in 2005, at 29 per cent, we could have an economy-boosting flat-tax regime of no more than 20 cents in dollar”, emulating the “booming Asian economies”.

Both were in accord with the party’s libertarian — it would say liberal — principles. Act members and voters agree on smaller government.

But there are other things on which they don’t agree. Those divisions were aired at last year’s conference, notably in speeches by Sir Roger Douglas and then deputy leader Heather Roy. Roy’s payback was to be ousted by Boscawen. Sir Roger is retiring — again — and Roy will be parked well down the list.

Calvert’s manner of arrival highlighted a major Act tension: principle versus populism. She replaced David Garrett, the originator of the three-strikes law, whose disgrace was also Hide’s for hiding Garrett’s past court experience before the election.

That populism versus principle divide is almost unbridgeable for Act in the short term. Hide certainly pushes the principle (his legacy will be more stringent rules on lawmaking, long overdue). But he also detours into populism which clouds the principle: perk-busting and three-strikes are examples. Why? It wins votes.

Roy highlighted that problem in her “black swan” speech at last year’s conference. For long-term electoral success, she logically said, Act needed to free itself from reliance on Hide winning Epsom (which in turn relies on National voters agreeing to vote for him). Ironically, Roy was instrumental in Hide successfully campaigning for Epsom in 2005 when Act was in danger of being deactivated by the voters.

Act has five MPs in this Parliament on a 3.7 per cent vote only because of the illogical MMP rule that waives the 5 per cent party vote threshold for parties that win an electorate seat. New Zealand First won 4.1 per cent but got no seats.

The Greens have cleared 5 per cent in every election since 1999 and look set to do so again this year.

To emulate the Greens Act needs, first, a principled position which is broadly understood, at least in outline, by most voters and liked by 5 per cent-plus (not so, right now) and, second, consistent presentation of that position so that it does not get blurred in voters’ minds.

A significant faction believes Hide is not that consistent presenter. That faction says many supporters have peeled off and won’t turn up this weekend. It rankles them that “perk-buster” Hide took his then girlfriend (now wife) to Britain on holiday on taxpayers’ money and imported Garrett.

It rankled with many Epsom National voters, too.

Ultimately, enough Nationalists are likely vote for Hide on November 26 to preserve at least some of his 12,882 majority. But how many MPs will he bring with him? What influence will he have next term if Act is smaller? And will National still back him in 2014?

Act’s purists would say this is a looming crisis that could be put to good reforming use. Just as English and Key are in effect saying of Christchurch.