Rankin on Thursday - Labour has Balance of Power

Thursday, 16 December 1999, 8:50 am
Opinion: Keith Rankin

How strong can a Labour-led Government be in the MMP environment? Is Labour a dog easily wagged? Is it not true that the Greens have the "balance of power"? Or maybe New Zealand First? I argue here that Labour is strategically placed to dominate parliament, because, as well as being the biggest party, it is really Labour that has the balance of power.

The term "balance of power" has three meanings in common usage.

The first meaning is that of a "minor" party – inside or outside of a coalition – being able to exert power far in excess of its numerical support; the "tail wagging the dog". The smaller party in a majority coalition is thus said to hold the balance of power.

The second meaning relates to the situation when some parties rule themselves out of government. The usual reason for self-exclusion is that a party doesn't want to "get into bed" with person A or party B. Such parties concede the "balance of power" to parties which are willing to overcome past differences in order to participate in government. Hence Labour, in refusing to form a coalition with National in 1996, conceded the balance of power to NZ First. Similarly, Act conceded the balance of power before the 1999 election by refusing to share power with New Zealand First. The most promiscuous small party, in gaining the balance of power by virtue of others' displays of petty virtue, gets to become king- or queen-maker.

The third and in my view the correct meaning of the term "balance of power" relates to parties' positions on the left-right ideological spectrum. Now it is true that some parties cannot be adequately characterised as right or left, or even as centre-right or centre-left. While the Greens are advocates for beneficiaries, they draw many more votes from Epsom and Albany than from Otara and Mangere. And NZ First manages to attract some voters with extremist opinions, while being the closest to the centre in terms of its record in parliament. Nevertheless, the characterisation of the Greens as being to the left of the Alliance is hardly a matter of dispute.

The median (ie middle) voter supported Labour this year. The vote for Labour plus the parties to its left was more than 50%. Likewise, the vote for Labour plus the parties to its right was more than 50%. Hence Labour now has the balance of power (or the 'strategic balance'). In 1996, the median voter voted for New Zealand First; hence NZ First had the strategic balance, and NZ First votes in Parliament were critical in constructing a majority on just about any issue.

In a left-right democracy, the median voter's party should be in government. (An exception would be a grand coalition which excluded a small centre party. A grand coalition is almost always weighted to the centre.) If it is a small party holds the strategic balance it will exercise power mainly by endorsing or rejecting the policy proposals of other parties. A large party with a mandate from the median voter is able both to make policy and to find support somewhere in parliament for each of its policies. A policy which in 1999-2002 invokes the "party distinction" clause for the Alliance is likely to be amenable to National. Labour – unlike National in 1996-99 – is strategically placed to get its way; it has the balance of power.

We can quantify the 'leftness' or 'rightness' of each person and each party in our new parliament. For example, on a personal level, Sue Bradford might be a -10 (ie as far to the left as you can be to be electable in New Zealand) while Rodney Hide might be classed as a +10. (Lindsey Perigo might be a +20, but he and his Libertarianz party are unelectable, as the election showed.)

In my estimate, the Green Party averages out at –8, the Alliance at –6, Labour at –2, NZ First at +1, United at +2, National at +3, and Act at +8. If we take a weighted average of all 7 elected parties, the parliament as a whole scores –0.15; fractionally left of centre. The government however scores –2.68 (-3.24 if we include the Greens), which means it is more to the left than a First-Past-the-Post (FPP) Labour government would have been. Indeed an interesting feature of proportional representation is that a small swing in personnel can lead to a big swing in the ideological 'centre of gravity' of the government. (By way of contrast, under FPP, a huge cleanout of MPs might generate a relatively small shift in the centre of gravity of government; eg the 1990 election.)

What MMP does that FPP didn't do is to prevent parties from redefining themselves after an election. The Alliance, as the conscience of this Labour-led government, will be able to prevent Labour implementing a complete right-wing manifesto, as it did in the 1980s. Unlike 1984, today if we vote left we get left. Labour, while powerful, is now constrained to be what it presented itself as; a party slightly left of centre.

An interesting feature of the numeration of the political spectrum is the ability to understand strategic voting. (I distinguish strategic from tactical voting: tactical voting is voting against the person or party you hate the most instead of voting for the one you like the most.) Strategic voting is about engineering a government. Some voters will vote across the left-right spectrum in order to (i) minimise the impact of the more extreme parties within that government, or (ii) to minimise the likelihood of a populist centre party gaining the balance of power.

Hence, it was argued (eg by Jenni McManus of The Independent) just before the election that some National or Act supporters (eg people in the financial markets) would "hold their noses" and vote Labour in order (i) to lessen the influence of the Alliance and the Greens in the new government, and (ii) to give Labour rather than NZ First the balance of power. The paradox here is that such strategic votes for Labour shifted the parliament further towards the left but pulled the government away from the left. If a third of those who voted Act had strategically voted Labour, then the parliament would be rated at -0.40 (instead of -0.15) but the government would be rated at -2.65 (instead of -3.24).

In this context, the polls play an important role. They are accurate, if properly conducted and properly reported. (Indeed the Herald's last "Digipoll" was almost exactly correct; see NZ Herald 11 December. Its only fault was to slightly overestimate Act's support. Perhaps that indicates some Act voters switched to Labour at the last minute?) It is the polls that enable strategic voting. We know from the election-eve polls whether the government will be centre-left or centre-right. Strategic voting reinforces those pre-election preferences. If in 2002 the election-eve polls show a clear advantage to the parties of the right, some Alliance and Labour supporters will vote National to minimise the influence of Messers Prebble and Peters.

MMP represents a political marketplace in which parties position themselves along a philosophical spectrum. The party that attracts the middle voter gains a strategically important position, the balance of power. Strategic voting in a mature MMP system will in most future MMP elections give Labour or National the balance of power; probably Labour more often than National. The result will be a representative parliament, a greater level of party accountability, and, as before MMP, a concentration of power in the hands of the major parties.

MMP has given power to the majority, because the median voter is always on the side of the majority. Before MMP, the median voter almost never voted for the party which became government. Now, governments are accountable, because it is the median voter who really holds the balance of power. In 1999, the median voter voted Labour.

ends

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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