Acting up: the state of Seymour's nation

Who's really running this government?

ACT Party leader – and soon to be deputy prime minister – David Seymour took advantage of Auckland’s long weekend to leave prime minister Luxon choking in the dust.

Seymour got ahead of the new government’s first Budget and pushed his party’s policy of a simpler and flatter tax system. He went on TV arguing that he can talk his coalition partners into backing his Treaty Principles Bill – drawing the comparison with his successful End of Life Choice Bill. And he presumptuously delivered a State of the Nation speech.

He was aiming to position himself as the politician most willing to face present-day reality and to lead change.

So, who’s really in charge of the country?

Mr Seymour has a doggedness that annoys the hell out of his opponents, but gets him results, some of which I mention below. His state of the nation speech didn’t announce anything new, and it represented the standard liberal individualism that we’ve come to expect from ACT. Here are a few nuggets:

On the prospect of Trump running for president, Seymour said: ‘When half the people think the leading Republican nominee is corrupt and the other half think the justice system is corrupt for saying so, you have a problem of division.’

On the failings of past NZ governments: ‘When did you last hear a political leader plainly state that doing your homework, earning a living, making sure your kids go to school, with lunch, and following the law are just your responsibility? These are basic truths but even reading them out has come to sound quaint in a world where your identity matters more than what you do.’

As a rebuke to some opponents of his Treaty Principles Bill: ‘Don't say, or even hint, that there will be violence if you don’t get your way.’

Whether one agrees or disagrees with him, Seymour is a better rhetorician than Luxon. As I’ve said before, Luxon sounds robotic and predictable. Seymour is eminently quotable.

ACT didn’t do as well as expected in the last election, however. Why not?

Background

In the 2023 election campaign, the ACT Party argued for flatter taxes, lighter regulation and a slimmer public service.

Anonymous ‘bureaucrats’ were an easy target. The Ministry of Business, Innovation and Employment (MBIE) would come under Seymour’s axe, for example. His ‘joke’ about how to get rid of the Ministry for Pacific Peoples doesn’t merit repetition, but it too was a target.

In contrast, an ACT government wouldn’t stint itself on prisons. They wanted to ‘invest’ $1 billion in building 500 more prison beds, and they opposed the Labour government’s policy of reducing the prison muster.

ACT has often promoted ‘tough’ law and order policies – a hardy perennial for right-wing populists. For libertarians, tougher sentencing is (putatively) a disincentive to criminal behaviour and a means to protect property and life.

The law and order policies reveal ACT’s tricky balancing act between its founding neoliberal principles and the temptation to drum up votes through populist appeals and pragmatic compromises.

The party’s co-founder, Sir Roger Douglas, complained that ACT had ‘lost the plot circa 2001, when they dropped their savings-based approach to welfare and joined the other parties in a pay-as-you-go approach.’ For example, Seymour’s team don’t favour pushing people into private healthcare insurance, but they loudly insisted they’d ‘put an end to race-based healthcare’. Populist messaging displaced neoliberal policy in this case.

In education, on the other hand, they still support charter schools and even advocated for a Friedmanite voucher scheme to allow parents to choose which schools their children attend. And they wanted to reintroduce performance-based pay into the public sector, empowering cabinet ministers to set the objectives for chief executives, review their performance and determine bonuses.

Sir Roger formed the ACT Party in 1993 in the hope of completing the neoliberal reforms that he’d initiated in the mid-1980s as finance minister for the fourth Labour government. But, before the 2023 election, he said he was a swing voter, as ACT now ‘represents only the wealthy’.

To think that the ACT Party ever represented the non-wealthy, however, requires an unwavering belief in the ‘trickle down’ theory of free-market economics. And on that point I'll let the reader be the judge.

A success story in the 2020 election was the rise of the libertarian ACT Party. They shot up from 0.5% of the party vote in 2017 to 7.6%. After holding on for three elections with only one electorate (Epsom) they then won 10 seats, bringing in a fresh team of nine list MPs.

The centre-right National Party had been needing a friendly side-kick to support it in office. They kept ACT on life-support through several elections by letting them win Epsom while below the 5% threshold.

National must now be wondering if they’ve created a monster. As National went through four leadership spills after 2017, and lost dismally in 2020, David Seymour grew in confidence as a de facto leader of the opposition.

ACT's rise, then, was partly at the expense of National. But the two are joined at the hip, and they were considered to be in a pre-electoral coalition heading into the 2023 election.

In the months June through August 2023, ACT was getting opinion poll results in the range 11 to 15% – well above its 2020 election result of 7.6%. The dream-run for ACT would have been 15% at the election, potentially doubling their numbers in the next parliament, plus bagging two electorate seats (Epsom and Tamaki).

Well, they got those two electorates, but their polling declined as the 14 October election approached, and ACT landed on 8.64% of the party vote, giving them 11 seats out of 123. Yes, that was the party’s best election result ever, but not as good as they’d been hoping.

What went wrong?

Here’s a maxim of NZ politics: if anything’s wrong, blame Winston.

In that June–August period, when ACT was riding high in the polls, NZ First was languishing below the 5% threshold. As NZ First rose above 5%, ACT’s polling went below 10%.

David Seymour started to get angsty about NZ First spoiling his dream of a tidy National–ACT coalition. In early August, he was adamant that, if NZ First made it back into parliament, they’d be relegated to the cross-benches without getting their hands on any real power. Once the votes started to be tallied, however, David’s nightmare turned into reality: Peters was back, and Luxon would need him.

Peters had rightly identified a disgruntled minority that would get him back into parliament, and he baited them with messages that touched on their conspiracy theories. ACT weren’t prepared to dig that deeply for the sake of that minority. After all, doing so could have alienated the more principled libertarians. They’d already lost Sir Roger.

All the same, given his performance in the last few days, it almost looks as if David Seymour has made a transition from de facto leader of the opposition to de facto prime minister.