Since the introduction of MMP there has only been one new party to enter Parliament - the Act party. Every other minor party established has been established by an existing parliamentarian. No doubt Act's success was aided by its possession of huge amounts of financial resources. But its election to Parliament probably had more to do with the simple fact that its political programme represented the ideological outlook and economic interests of a small but significant minority of voters. Act's steady electoral decline since 1996, however, actually indicates that money can't buy power. The story of Act shows that a well-funded corporate party can spend as much money as it likes, but if the tide is going out on your brand of discredited politics, money can't save you. [Read more below]
There should be no doubt that when Act was established it had huge capital resources and financial backers. According to Jane Kelsey, writing in 1995, ‘Act was estimated to have resources equivalent to all the major parties combined with which to fight the 1996 election’ (Kelsey, 1995: p.313). In one fundraising drive in late 1994 Act netted a million dollars (Brown, 1995: p.30), and in 1995 and 1996 Act secretly received millions of dollars of funds from a small number of wealthy supporters. Leaked documents showed that Act’s ‘Cargill Trust’, set up by law firm Buddle Findlay, received a total of $6.8 million, of which Act definitely received $2.9 million in capital distributions in the period between April 1995 and the end of March 1996 (Johns, 2001a: p.A1).
At the 1996 general election Act spent $1,746,908 (including $93,739 of state funding for broadcast advertising), which was the second largest amount of any party. The decline of the party’s finances, however, was reflected at the following 1999 election when the its expenditure slumped to $787,807 (including $129,918 in state funding). Then in the 2002 general election Act recovered to spend $1,792,461 (including $166,903 of state broadcasting money). As well as election expenditure, Act has spent large amounts of money on advertising in non-election years in order to raise its profile. For example, in 1995 ‘Act spent $300,000 on a burst of advertising for its policies’ (Campbell, 1996b: p.7). Then in late 1997 and early 1998 the party expended $250,000 on two high-profile publicity campaigns alone cost $250,000 (Clifton, 1997e: p.29).
According to ex-Act insider, Simon Carr, the party's early high spending professionalism was largely counterproductive. This is apparent in the stories that Simon Carr of Act has written about the chaos and mistakes made inside his party due to its over-reliance on professionals during its start-up period. Carr maintains that professionals are not the best advisers for politicians:
the advertising people thought advertising was the most important thing about Act that would impel the message into the hearts and minds of the voting public. The researchers thought they could characterise our constituency and reveal their hot buttons so they could be played like a pianola. Natually enough, the computer people thought the demographic databases would reveal everything; the membership people thought the membership was most important. The membership would take our interesting message in pyramid teams through the country in three million face-to-faces; and most of the ten managers, with every justification, thought the management was the critical element in the equation (Carr, 1997: p.93).
According to Carr, Act’s mistaken over-professionalisation was the result of the party having fallen victim to ‘delusions of grandeur’ (Carr, 1997: p.93). Although professionalisation was seen as the common sense and smart way for the party to develop, according to Carr, it was a false belief in terms of Act. Further evidence of the ineffectiveness of political advertising is supplied by Carr. After Act spent $300,000 on a round of advertising in 1995, Carr reports that the party’s support actually dropped by nearly three-quarters (Carr, 1997: pp.86-87).
Act's subsequent electoral decline - to the point it now only has two MPs and only about 1% support - raises the question of whether money is really as essential to New Zealand politics as is commonly assumed.
Brown, Russell (1995) ‘Launching Act: The Show Goes On’, Listener, 26-30, 4 March 1995.
Campbell, Gordon (1996b) ‘Hey, Big Spender’, Listener, 7, 21 September 1996.
Carr, Simon (1997) The Dark Art of Politics, Auckland: Hodder Moa Beckett.
Clifton, Jane (1997e) ‘Wheels Within Wheels’, Listener, 28-29, 27 December 1997.
Johns, Geraldine (2001a) ‘Act’s Hidden Millions’, Sunday Star-Times, A1,A5, 22 April 2001.
Kelsey, Jane (1995) The New Zealand Experiment: A World Model for Structural Adjustment?, Auckland University Press / Bridget Williams Books.