Is it a coalition of chaos?

The post-Limboland Luxon government

For the first time under MMP, New Zealand will have a three-party majority coalition government. ACT and NZ First will each have three ministers in Christopher Luxon’s cabinet.

During Friday’s announcement and signing, there were no ‘sparks flying’ between Peters and Seymour. And the coalition agreements reveal that all three parties will get to advance a good deal of their respective manifestos. There’s plenty of time to mess up, but so far no sign of chaos. There were a few combative comments from Mr Peters aimed at the journalists in the room, but nothing unusual.

Words like ‘trust’ and ‘respect’ were used a lot. And we’ll see how long that lasts. The two smaller parties will have a hard job keeping up their public profiles, differentiating themselves from one another politically, getting credit for their achievements, and, when necessary, foisting blame onto the other two.

The coalition agreements include guidelines for managing disagreements, with reference to the Cabinet Manual’s ‘agree to disagree’ principle that allows exceptions to the convention of unanimity. Once again, the Cabinet Manual will prove to be an important innovation (or perhaps it’s become a convention in itself), assisting the new prime minister and his team. It sets out guidelines for executive government, while allowing for the flexibility of an uncodified constitution. (For more on the NZ Cabinet Manual, see the article at the bottom this post.)

The coalition will only be as chaotic as the people in it are prepared to make it. The tools are there to make it work smoothly, on the other hand.

The main policy compromises made by National are:

National’s policy of allowing foreign buyers to purchase high-end properties, subject to a 15% tax, is dropped at the behest of NZ First. This gives National an honourable way out of a policy that would have been unpopular and could have come unstuck on international legal grounds. It does mean that the new government has to readjust National’s pre-election tax policy. Many recipients of family tax credits will miss out on a boost from shifting the abatement thresholds; so the new government will give tax relief with one hand and take some of it back from mums and dads with the other.

The age of eligibility for NZ Superannuation will remain at 65, however, also at the behest of NZ First.

The ACT Party will introduce a Treaty Principles Bill and National will support sending it to select committee, but not necessarily after that. If such a bill (in whatever final form) ever gets passed, then ACT’s policy is to put it to a referendum.

Parliament could just pass the law and be damned, dispensing with the ‘divisive’ referendum – but ACT and NZ First would insist on having one. If there is to be a referendum, we don’t know yet what exact wording it would ask people to approve. The legislative process would knock it around, possibly giving it wider acceptance.

So, if you have strong views on that matter, you can make a submission to the select committee once you’ve the read the bill – and/or stage a protest. In the meantime, read ACT’s policy, as it’s been misreported in some media. (I’m not endorsing it – just pleading for accuracy.)

It was no surprise to see in both agreements numerous mentions of policy ‘based on need, not race’.

Many provisions are about repealing or removing things done by Labour – or restoring a status quo ante, for example the three-strikes law. And quite a few items commence with ‘explore’, or similar wording, so they aren’t substantive commitments.

Here are a few matters that stood out for me:

• The Clean Car Discount will be repealed, but not the Zero Carbon Act. ACT has made a concession on that.

• The Productivity Commission will be scrapped to pay for ACT’s regulatory review agency.

• Fair Pay Agreements will be repealed and 90-day trials expanded to all businesses – very unpopular with trade unions.

• Publicly-funded tertiary education institutions will have to commit themselves to a free speech policy. That should be easy to do, but one can anticipate an academic or two using their freedom of speech to argue against it.

• Shifting the no-fees year for tertiary education from the first to the final year helps to balance up the loss of the foreign-buyers tax. School-leavers may feel cheated. And, in as much as a fees-free policy influences anyone’s choices, the incentives shift from commencement to completion of the qualification. So that may reduce new enrolments into institutions, many of which are already in deficit, but may help weed out those who aren’t really into completing what they started.

• An amendment to the Constitution Act 1986 will be introduced to enable a four-year term. NZ First pledges to support such a bill to select committee, provided the matter is to be put to a binding referendum, rather than being passed by a 75% majority in the House.

• A reopening of the Marsden Point Refinery will be investigated. The Northland boys (Winston and Shane) were obviously behind that.

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So the country’s sojourn in Limboland is over. Kiwis love to hate their governments, but they were reportedly impatient to have another one foisted on them by a former airline manager. Someone even did a survey: two thirds of us, it estimated, thought negotiations were taking too long. Monday’s swearing-in couldn’t come too soon for a people whose national pastime is complaining about government.

Six weeks after the election – half of which was spent just waiting for the final results – isn’t too long, in my opinion, taking account of the number of issues that had to be agreed and the new relationships to be built.

I see many compromises, but is there any chaos? Te Pāti Māori co-leader Debbie Ngarewa-Packer has said, ‘Aotearoa will see absolute chaos’. She’s concerned about ‘regressive’ policies on te reo and on Treaty principles. Chris Hipkins added that this is ‘going to be a government that drives people apart’ – quite unlike the previous one.

If a Treaty Principles Bill does pass and then goes to a referendum, there could well be a lot of nastiness and perhaps even some violent civil disobedience. Some people (on both sides) just can’t talk reasonably about it. Well, there’s a massive row going on anyway, so why not have it out in parliament? Isn’t that what parliaments are for?

Luxon’s government will be mainly conservative, going by his small policy targets that restore the past or bring a little ‘relief’. Other than ‘getting the country back on track’ and ‘growing the economy’, there’s (thankfully) no bold vision. Having promised little, delivery should be easy. If the economy misfires, Luxon can always point at external causes.

Time, however, delivers unpleasant surprises. Just ask Key and Ardern. How the three amigos manage unexpected calamities may determine the success or failure of this tripartite coalition.

Straw poll

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And you thought New Zealand had problems?

Spare a thought for the Dutch. After the 2021 election in The Netherlands, it took incumbent prime minister Mark Rutte 271 days [not a typo!] to form a four-party coalition. But this coalition fell out and the government resigned in July over a controversial immigration policy: the reunification of family members of asylum-seekers.

An early election was held on 22 November. The largest number of seats (37 out of 150) was won by the far-right Party for Freedom (PVV) led by Geert Wilders. This populist party has been shunned in the past as a pariah by the others because of their anti-immigration and anti-EU policies.

It’s not clear which parties will form the next government of the Netherlands. Just on the numbers, PVV could muster a majority, if the two main centre-right parties will talk with them. But there are alternative coalitions. A long period of negotiations is foreseeable.

A part of the problem is a proportional representation system that has no party-vote threshold. In the 150-seat parliament, a party effectively needs only two thirds of one percent of the vote to gain one seat. Consequently, there are 15 parties in the new parliament, seven of which have three or fewer seats.

With a bunch of tiny, one-issue parties and a large, virulently populist party, it’s extremely difficult to get a politically workable majority. We should wish them luck – and learn from them always to have a party-vote threshold!

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On the NZ Cabinet Manual:

Grant Duncan, ‘New Zealand's Cabinet Manual: How Does It Shape Constitutional Conventions?’, Parliamentary Affairs, Volume 68, Issue 4, October 2015, Pages 737–756, https://doi.org/10.1093/pa/gsu023

For a free version, link here.

You can check out – or even pre-order – my next book here. Government and Political Trust: The Quest for Positive Public Administration. It’s about government globally, and how we could do it better. Due out in Feb. 2024.

The previous book How to Rule? The Arts of Government from Antiquity to the Present is available here.