Lately there’s been a lot of media recognition of the Act party’s ideological disorientation and shift towards both the centre and irrelevance. But this isn’t a recent trend resulting just Rodney Hide’s takeover of leadership. The party effectively set itself upon an increasingly moderate and pragmatic trajectory from its very beginnings - Hide is merely taking Act's intrinsic politics to their logical conclusion. This blog post details the long, slow death of the Act party, concentrating on its first ten years of desperation and ideological disorientation. [Read more below]
Act New Zealand (1993-96)
Act was originally formed to promote hard-line new right principles such as zero income tax and a minimalist state. It had an ‘ideological’ leader in Roger Douglas but little support in the polls. Richard Prebble, upon becoming leader in 1995, attempted to redefine Act as a supposed mainstream party of ‘middle New Zealand’. In a major piece of re-positioning, Act’s hard edges were blurred and its detailed policy statements were converted instead into ‘values’. These ideological shifts were clearly about office-seeking. The party’s disappointing performance in pre-MMP opinion polls very quickly led to a re-evaluation of its political message. The fact that Act was run by marketing professionals, entrepreneurs and managers meant that the party and its message were always treated largely as a ‘product’.
In campaigning for the leadership of Act, Prebble explicitly stated his intention to moderate the party and in particular the policy of zero income tax: ‘Before agreeing to take the leadership of Act I wrote to the members – all 7,000. I said, "ACT has been perceived as a radical right wing party, the party of North Shore millionaires. Act must change its image to become a progressive, stable party of the centre right and drop some of its very clever but too radical policies such as zero income tax”‘ (Prebble, 1996).
The reinvention of Act not only involved stylistic change through a moderated image and new leader. The main thrust of its re-launch was a substantial re-evaluation and overhaul of the party’s programme. In April 1996 a new manifesto was launched, shorn of the party’s initial radicalism. The name of the manifesto – ‘Commonsense for change’ – was indicative of the new approach: less experimentalism and more orthodoxy. The new manifesto was most striking for the fact that it omitted two of Act’s most radical and defining policies: its education voucher scheme and the zero income tax policy. Both had proved controversial and so they had to go. As a replacement for the zero income tax policy, Act resurrected the old Fourth Labour Government’s canned flat tax policy – in this case, set at 19.5 cents in the dollar for both individuals and companies. Although the new more moderate tax policy was still promoted by the party and opponents as a ‘radical’ measure, in reality the rates were not totally dissimilar to the governing National Party’s tax policies. (National, too, was promising to cut the lower-step 24 cent personal income rate to 19.5 cents as part of its programme of tax cuts. Act’s difference with National was that it would also abolish the 33c rate).
Act also began to give up on defining and identifying itself as a party of economic reform and innovation. As with the other political parties, it no longer found the area of the economy one in which it could make much political headway. Furthermore, Act realised that the continuing economic slump was only going to bring further unpopularity for those parties associated with neo-liberal measures. Thus, the defining feature of the party’s first few years was its process of ‘rebranding’ – as it worked to recreate its public identity again and again. First Act went from being a programmatic ‘party of policy’ to being a ‘party of personalities’, and, again under Richard Prebble, it was re-branded as a ‘party of values and virtues’.
During 1996 the main message that Act attempted to impress on the public was the party’s commitment to protecting the economic gains of the last 12 years and the current economic settings and framework. This was not a radical stance, but actually a status quo stance. It did little to differentiate Act from the National Party, nor from the plethora of new conservative parties which were also committed to the reforms. The new strategy was clearly a lowering of the party’s horizons. After all, Act had originally been a party that saw the existing configuration of the economy as representing ‘unfinished business’ – an economy only half reformed. Their raison d’etre had been the extension of the ‘revolution’. By 1996 the party had lowered its goals to a defence of the status quo, and focused much less on the problems of the current system nor on projecting Act’s vision for further reforms.
Act New Zealand (1996-99)
Once elected to Parliament, there was a perceptible shift in Act’s focus. While Act probably thought that its first year in Parliament was a time to define the party’s brand more clearly, the new MPs ended up being identified with trivia, side-issues and gossip. The populist side of Act emerged early in its Parliamentary existence, when Rodney Hide launched his anti-perks campaign. If anything, the strategy simply further obscured the party’s deeper policy message (See: Reid 2001: p.267).
In 1997 Act moved to reposition itself as a more socially-conservative party. The new strategy did not fit well with their ‘progressive-liberal’ image. It seemed to be a strategy that would undo its relatively successful repositioning of 1996. This earlier intelligent repositioning had focused on winning urban-liberal support, leaving National to concentrate on the rural and provincial vote (Trotter, 1998a: p.13). So although Prebble, when taking the leadership, declared Act ‘a credible, liberal progressive centre-right party’, it soon drifted towards replicating the traditional National Party, in seeking the support of the conservative rural voter. Related to this, Act’s identity and purpose was slowly reshaped and redefined away from new ideas and radical reform, and it became ‘a party of sense and stability’ (Campbell, 1996e: p.18). Thus, although it started out as a party reflecting the image of Roger Douglas, and therefore attempted to be ‘the intellectual powerhouse of the right’, Act quickly became a moderate shadow of its former self (Laugesen, 1997c: p.C1). In 1997 Richard Prebble defined what the caucus could now agree on: ‘We all agree on privatisation, free trade, the Reserve Bank Act, the Employment Contracts Act and the rule of law’ (Prebble, 1997: p.19). Unfortunately for Act, this was hardly a well-defined party identity, nor an identity that differed in substance with that of the two main parties. Even when Prebble elaborated on the Act identity, it sounded rather woolly: ‘Act’s basic principles are that the state ought not to do for people what they can do for themselves, and that individuals should have the maximum choice in the way they run their lives. We firmly believe in the rule of law and property rights, and free enterprise, and rewarding the virtues of hard work, thrift and taking responsibility for your own family’ (Prebble, 1997: p.47).
As National moved further into the centre of the political spectrum, Act too gave up more of its far-right position. When, in 1998, it released its alternative budget policy statement, it omitted unpopular measures such as cuts in social spending, instead advocating only a few asset sales and a tax cut of three cents across the board (see: Laugesen 1998f: p.C2). The National Business Review commented that Act’s extremes had been considerably tempered:
Gone is the spiritual call to arms of massive spending cuts and a revolutionary social programme in the health and education sectors. Instead a round of asset sales… tax cuts and the modest target of paring back future unallocated spending to fund them…. A document which at first glance looks macho is actually a major revision of the party’s position and a revision towards compromise at that. Where were the vitriolic attacks on the profligate spending in the coalition agreement? Replaced with an acceptance of current (previously lunatic) spending commitments (Molesworth, 1998c: p.19).
Another of Act’s founding policies was axed in 1998 when Prebble abandoned its compulsory savings proposal for superannuation, following a public referendum that showed a very similar policy to be clearly unpopular. Then in January 1999 Act released its three-point plan for the economy, recommending a cut in the tax rate of three cents, the sale of three SOEs, and the cancellation of all unallocated spending. Laugesen commented that ‘for Act, this is mild stuff. With Act striving not to frighten the voters before the election’ (Laugesen, 1999a: p.C2). Additionally, the party dropped its demand for National to cut taxes as the price for Act’s support of its next Budget. Act’s alternative budget of that year also differed little from that of the National Government in terms of taxation and expenditure levels. While the government planned to collect $42,100 million and spend $40,900 million, Act stated that if it was the government, it would collect $39,419 million and spend $38,409 million – hardly a radical difference (Edlin, 17 Nov 1999: p.6). Furthermore, in pledging to cut taxes yet spend more money on certain areas of health, education, welfare and law and order, Prebble had trouble pointing to where cuts would be made to bring about the necessary resources, except to say that ‘the money would come from reprioritising department spending’ (Graeme Peters, 1999a: p.2).
As it moderated its radical economic positions so as not to be so far outside the ‘new centre’, Act took up an increasingly socially conservative programme as a radical replacement. Pushing populist buttons on issues such as the Treaty and crime meant that Act could moderate its economic message, suiting the new consensus that was developing in this area, but at the same time differentiate itself from National. Since National had adopted many of Labour’s liberal stances on social issues, there was a gap in the political market for these conservative voters. Furthermore, with the pendulum swinging even further away from the hard economic right, Act quickly needed to abandon its more purist messages in order to retain support. Emphasising these populist issues was a way of deemphasising its neo-liberal founding polices without having to totally abandon its founding principles.
Act New Zealand (1999-2002)
Following the 1999 election, in which Act attempted to mobilise support on the basis of a socially conservative or populist platform, the more radical and policy-seeking faction of Act attempted to pull the party back towards its founding principles. Most significantly, this involved installing Catherine Judd – a Roger Douglas nominee who had not previously been involved in the party - into the party presidency. As president Judd then instigated the ‘Liberal Project’ – an attempt to develop and reiterate Act as a party of social and economic liberalism.
In the 2002 general election campaign Act was in a defensive mode – attempting to defend its seven percent of the party vote. It therefore made a significant effort to rid itself of its extremist image (See: James 2002i). According to James, it tried ‘to present a less rednecked and less radical image than in 1999’ (James, 2002f). Policies were further watered-down. Act’s tax statement now pledged to make only minor changes to the income tax – with the top personal rate being dropped to 28 percent, and the present 19.5 percent rate being lowered to 18 percent (McLoughlin, 2002: p.2).
In a post-election analysis, party manager Graham Watson said that Act’s vote-catching ability might have been limited because Act and National had been positioned too close together. Although Watson blamed National for being ‘uncomfortably close’ to Act, his comments indicated that Act had failed to distinguish itself from others on the right of the political spectrum (Mold, 2002c). The expert survey results give slight confirmation to this idea – showing that while in 1996 Act was located at 9.1 on the 0-10 left-right scale, but by 2002 the party was at 8.8.
With the continuing decline in the popularity of neo-liberalism and firming support for the centrist Third way approach, Act was very obviously swimming against the political tide. Rather than being on ‘the side of history’, as the party might have felt when it was formed, Act was now in retreat. It had slowly jettisoned both its original policies and its raison d’etre of implementing Roger Douglas’ ‘unfinished business’. Gone were the days when it unashamedly and fundamentally stood for ‘much more extensive deregulation: very low income tax, more private funding and delivery of health care, personal choice in education, including private providers, low government spending, rapid privatisation of government assets, and extensive dismantling of economic and planning regulations’ (James, 2000a: pp.74-75). Replacing these policies and goals was a pragmatic party that focused its pitch, according to James, ‘on populist issues aimed at less well-off voters who might normally be expected to lean towards Labour: lower taxes (sold as a populist measure); cuts in welfare (aimed at stirring "downwards envy" towards able-bodied people who were not working); harsher measures against criminals; and the Treaty of Waitangi "sunset" targets’ (ibid pp.74-75). Prebble now even described Douglas’ ideas as ‘utopian’ (Laxon, 1999a).
Even Act’s own president, Catherine Judd, was critical of this shift, and outlined the decline of radicalism in the party:
Act was formed to be a party of influence, and our original vision, as outlined in Unfinished Business, was to transform the economy and society. It’s not surprising that after five years in Parliament the Party has lost some of its transformational edge and is sometimes known more for a collection of apparently conservative policy stands than as a party of vision (Judd, 2001).
Judd, a public relations company director, had previously been employed as an adviser to the Fourth Labour Government and then later for the Act party. She never joined Act until about one month before becoming president of the party in 2001. Encouraged into the presidency by Roger Douglas, Judd’s presidency represented an attempt by the more neo-liberal faction of the party to return the policy-pursuing strategy.
Although Douglas claimed in 2000, ‘there is no difference between National, Labour, Alliance or New Zealand First, except in matter of degree’, it appeared that Act also now only differed from these parties by matters of degree (Prebble, 2000).
Moderate radicals
To get an idea of just how conservative and middle-of-the-road the Act party is, a comparison with Bob Jones’ old New Zealand party is apt. This mid-1980s party showed that you can be radically economic rightwing as well as radically social liberal and still get 12% of the vote (even under FPP).
At a time when both the National and Labour parties appeared to still be ideologically bland, the 1983 launch of the New Zealand Party was an exciting development for the New Zealand political system. The party was established and led by wealthy and high profile Wellington property investor Bob Jones who, along with thousands of other National Party members and voters, decided that Muldoon’s National Party could not be broken from its postwar consensus policies, and a more dynamic liberal party was required (Gustafson, 1986: pp.148-149). The new party was therefore made up of a generation of social and market liberals who wished to reinvigorate ‘the political right around the principles of liberal capitalism’ (Aimer, 2001: p.274). The New Zealand Party therefore espoused a radical change of direction for New Zealand society. The party was most well-known for its libertarian and anti-state political platform which condemned the welfare state and preached freedom from economic regulation and taxes. As opposed to the muddled and centrist economic programmes of the main parties, the New Zealand Party’s ideology was undoubtedly radical and innovative.
Significantly, the party also had very liberal and far-reaching policies on social and moral issues – which distinguished it from new right parties in other countries that were more authoritarian or populist (Spoonley, 1987: p.233). The party was remarkably radical on issues of personal freedom, strongly advocating women’s right to abortion, the availability of contraception, and the legalisation of drug use and other behaviour that they labelled ‘victim-less crimes’. The party was also anti-censorship, but generally quite conservative on law and order issues. These mostly libertarian positions on social issues dovetailed with the party’s liberal economic policies. In foreign policy, the New Zealand Party not only endorsed a nuclear-free policy that was more radical than the Labour Party’s, but they advocated a position of unarmed neutrality for New Zealand, effectively disestablishing the defence forces and officially pulling out of ANZUS. The New Zealand Party was also seen as utopian on education issues, expounding that much more money be spent. Likewise, the party was radical in favouring substantial government involvement in the arts. They also emphasised environmental and quality-of-life issues. The party contested the 1984 general election, winning 12% of the vote, but no electorates. Although the New Zealand Party only effectively existed for two years, it proved very influential and significant by projecting a clear – if somewhat eclectic – ideological programme. After the election and the introduction of much of the New Zealand Party’s economic policy by the Fourth Labour Government, the party lost much of its support, and Jones attempted to dissolve it. [For more on the short history of the New Zealand Party, see: Aimer (1985; 1988), Grierson (1985), and Gustafson (1986, chapter four).]
Now jump back to 2007, and Act is looking incredibly moderate and bland. Rodney Hide has just initiated and negotiated a co-operation agreement with the Labour Government to try to make the party relevant again. Hide says that ‘As the free enterprise party, we can work with anybody’, when he really meant, ‘As a desperate and pragmatic party, we can work with anybody’. Hide justifies this by saying Act is now prepared to work with either of the main parties to be ‘a positive force’ in Parliament, not just a party of Opposition. Clearly Act want to be a ‘player’ rather than a party of ideas or difference.
Act also now use the same logic as the Greens in shifting towards the centre to negotiate with either of the two main parties. Hide’s apparent logic seems to be something like the Greens', albeit from the other direction: ‘We’ve always been willing to work with National, and now that National is pretty similar to Labour, why wouldn’t we work with Labour too?’.
Unsurprisingly, Roger Douglas has lashed out publicly at Hide’s drift towards Labour, suggesting that the party should have nothing to do with the Labour Party ‘control freaks’. Hide has defended himself, saying ‘What I've never done is sold any of my principles or Act's principles down the river.’
Even a rightwing blog – Whale oil – complains correctly that Hide and deputy Heather Roy have spent months attacking National as ‘Labour lite’ and suddenly they too hypocritically jump into the crowded centre as well. For another good commentary about Hide, from a former fan, read Deborah Coddington’s opinion piece, Is the party over for Rodney Hide?, in which she asks ‘Can we have our party back now?’
In a similar note, a recent Christchurch Press editorial notes rightly, that ‘Rodney Hide spends most of his time nowadays advocating personal improvement (mainly his own) and better behaviour for parliamentarians’. The NZ Herald editorial on Act’s cooperation deal with Labour, likewise suggests that, ‘As much as Mr Hide may try to rationalise his approach, it is difficult to see it as other than an act of desperation.’
The Act party looks pretty terminal – rating about 0.3% in the polls. Hide may hold onto Epsom in future elections, but at most his party will be as relevant as the Progressives now are under Jim Anderton. In fact, Act’s decline strongly mirrors the decline of the Alliance. Both parties stood off to the left and right of the major parties and were clearly defined by their programmes towards neoliberalism (Rogernomics and Ruthenasia): the Alliance wanted to roll it back, and Act wanted to roll it out further. Once a 'new centre' essentially formed in favour of the status quo, both programmes became irrelevant. The post-1999 Labour Government effectively killed off both parties by ending the neoliberal debate when they adopted the so-called Third Way of accepting and selling a “kinder” neoliberalism with some minor adjustments - hence Act and the Alliance had nothing more to say, and voters had no great reason to vote for them.
Also, not only has the ideological tide of history moved against both Act and the Alliance, but their leaders became obsessed with moderating their programme and moving towards the centre of the political spectrum - effectively destroying their own 'unique points of difference'. I asked Rodney Hide recently what Act stood for and why he thinks no one knows what they stand for, and he couldn’t answer the question. I suggested that the party was no longer radical, and all he could say was 'we’re as radical as hell!' Clearly Hide and Act are not only in decline, disoriented, and desperate, but also self-deluded.
Bibliography
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