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Keith Rankin: Plausible Election Outcomes - A Numbers Game

Elections: A Numbers Game

Analysis – By Keith Rankin.

Election outcomes are determined by numbers, whatever the voting system. And the numbers in New Zealand this Saturday may well force a governing arrangement between National and Green, not unlike the present coalition government in the United Kingdom. The present arrangement in the United Kingdom (Conservatives and Liberal Democrats) was the only stable outcome possible, given the numbers and the perception that Gordon Brown's Labour had clearly lost.

I'm picking that the right bloc (National, Act, United Future, Conservative) will gain a total of about 56 seats. In my prediction the other allocations will be: Maori 3 seats, Green 15, New Zealand First 8, Labour 36, Mana 3.

No doubt my prediction will not be exactly correct. But it is highly plausible. With such a result, there are two plausible governments:
• National, Green, Maori
• Labour, Green, Maori, New Zealand First.

Clearly the electorate as a whole would much prefer the first. Indeed, the numbers, if they fall as I've suggested, virtually dictate this first option. Indeed, under Option 1, we should be able to avert both National's asset sales and Labour's proposal to raise the age of entitlement to New Zealand Superannuation.

Option 2 would be less favoured with the wider electorate because: Labour will be perceived as having lost; it involves too many parties; and because of the perception that New Zealand First could be a very annoying tail wagging a somewhat scruffy dog.

Getting it right will be more important than usual this time, especially for the Green Party, because the future of MMP will be determined in the next three years. If the Greens get it wrong, and First Past the Post voting returns in 2017, then that will be the end of the Greens in Parliament, probably for the lifetimes of everyone alive in New Zealand today.

If Option 1 emerges, MMP (and the principle of proportionality) will be seen as the big winner. Under Option 2, proportional representation will likely be seen as having failed. Further, in the event of MMP losing on Saturday, clamours for single-party government will strengthen.

A National-Green arrangement has a lot going for it. First, I think that the Greens should seek a formal coalition that includes the Maori Party, meaning that there would be significant Green (and at least 1 Maori ) presence in Cabinet. The Green Party would have the clout to keep Act out of Cabinet.

Second, a National-Green government would seem the best option to provide counter-cyclical economic management. For example, the Green Party could play a significant role in drawing up the next Policy Targets Agreement, in December, that will govern monetary policy over the next three years.

Third, an open-to-new-perspectives Green party, aligned with a pragmatic National Party, will be able to explore innovative tax-benefit options. One option that could be popular would be to pay the future profits of the publicly-owned power companies to all tax-residents as dividends. That would have a significant impact on low-income New Zealanders - a much more equal impact than Labour's minimum wage policy - and could if necessary be offset by raising the 33% tax rate to 34%.

In the event of an election result as suggested, and the Green Party refusing to undertake at least a confidence and supply arrangement with National, then New Zealand First would be the party that holds the important cards. We should not panic about this possibility, because Winston Peters has neither lied about the "baubles of office", nor has proved destabilising in office.

Given conflicts between the policies of New Zealand First and the Maori Party, and substantial philosophical differences with the Green Party, New Zealand First as "last cab off the rank" would have to become the principal partner in a Labour-led alternative government. So the second option (given the numbers suggested above), would be a government much like the 2005-08 government. The Greens would have a support agreement with Labour, but little more.

I will finish here by noting the truth about New Zealand First in power. First, in 1996, the numbers dictated that National-NZ First was the correct option, much as they are likely to dictate the requirement for a National-Green government this time. Winston Peters had not ruled out such an outcome, although there was a certain amount of ambiguity around this issue. It was the numbers that decided who would be the government. Labour did not get enough votes in 1996. The time it took, in 1996, to sign up the deal had more to do with Peters' insistence on becoming Treasurer than on his own indecision. In his 20 months as Treasurer, he actually performed well.

The National-NZ First coalition was broken in 1998 because Winston Peters could not agree to the sale of Wellington Airport. He was forced out of office on a matter of principle to him, by National backbenchers who did not understand the importance of numbers. (Jenny Shipley soon realised; her most poignant comment, in 1999, was that the first thing she did every day was to count her numbers, to determine if she still had a government.) The instability that might have happened in 1998 was aggravated by a destabilising Labour Party that clearly preferred an early election than to forming a government that included Peters.

In 2005, Winston Peters, looking back to the schism in his own party in 1998, said that he would "not SEEK the baubles of office". That has widely been misquoted, as him saying "accept" rather than "seek". Peters was concerned that some MPs (as be believed former members of his own party had done in 1998) would want to become Ministers solely because they were seduced by the trappings of office (car, salary etc.).

Peters in 2005 found himself in much the same position as the Green Party are likely to in 2011, holding the balance. Thus Peters, who had not sought the baubles of office, was obliged to accept office in order to achieve stable government, and in accepting office (in a responsible and innovative way), he had no choice but to accept the baubles that went with office. He became a good Foreign Minister, and became Foreign Minister to avoid policy conflicts in other portfolios.

So if we get a Labour-NZ First government, we need not panic. It could prove to be as good as the 2005-08 government was.

Nevertheless, I favour a National-Green-Maori government, on policy and philosophical grounds. Most importantly, elections are numbers' games. It is looking, to me at least, like a National-Green-Maori government will be the sensible outcome, given the numbers that the voters are likely to deliver.

Keith Rankin teaches economics in Unitec's Department of Accounting and Finance.

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