Deal-Making is not MMP's Achilles Heel - Keith Rankin

Tuesday, 15 November 2011, 10:45 am
Article: Keith Rankin

One of the interesting ironies of this election campaign is that a deal between two allied parties, National and (New) Act, seems to be harming the reputation of the MMP voting system. It is mainly National and Act supporters who oppose MMP, knowing that 2-party systems in New Zealand favour the political right. So National and Act will be quietly pleased if their apparent machinations are increasing the chances that proportional representation will not continue past 2014.

All politics is about making deals to create majorities. With a multi-party parliament, the deals that matter are made in the open, in full view of the media. This bidding process is analogous to that of a competitive market. Indeed, in politics as in business, the most privileged players advocate highly competitive processes for others, while themselves seeking to profit from restricted competition.

In duopoly politics, heavily dominated by just two-parties, deals are made by back room factions rather than in the open. New Act, like Old Act before it, would prefer to be a Machiavellian faction within National than a stand-alone party.

Why are we so discomforted by front room deal-making?

An insight comes from an experiment done in an episode of BBC's "Bang Goes the Theory". Respondents were asked to use a preferred outcome of a disaster facing a city of 60,000 people. Would they prefer that 20,000 people were saved, or have a 33% chance that all 60,000 were saved, with a 66% chance that none were saved? Everyone went for the first option. "You don't gamble with people's lives", they said.

However, later when the word "saved" was replaced by the word "died"' and the numbers changed to ensure that the two options remained the same, then everyone instinctively favoured the second option. ("You don't consign 40,000 people to certain death", they said.) The contrasting responses were determined totally by the way the issue was put to them by the interviewers.

The usual narrative about Epsom is that Banks will, somewhat sneakily, qualify to bring extra Act MPs with him if National voters vote National and Banks rather than National and Goldsmith.

What if we focus on "disqualification" rather than "qualification"? The only real weakness of MMP is that it uses arbitrary criteria to disqualify many parties. In the case of a party getting four percent of the vote, the candidates voted for are not entitled to represent their voters in Parliament.

The 1993 legislation got around this problem by creating a second disqualification rule, the electorate seat rule. Parties' votes would be wasted only if those parties failed both rules. This substantially reduces the number of disqualifications. Further, any small party with large party friends should be able to find a way to win an electorate seat. Front room deal making is an open way of signalling likely coalitions (or lesser support arrangements) in advance, given that firm arrangements can take place only after the election.

In particular, any party which has been in a "confidence and supply" arrangement within a government has friends. It would indeed be both disloyal and stupid if the parties within a government did not offer protection, come election time, to their partners in government.

If MMP's "electoral seat" qualification rule is ever done away with, then three problems emerge. First, election campaigns will become somewhat boring, without the passions that a few of these electoral contests engender. Second, many more electorally supported parties will be disqualified from parliament. We will tend to see three or four parties in such a Parliament rather than seven or eight. (Most new parties have been minority factions leaving to become separate parties. These parties will have to remain unborn, buried (but active) within their parent parties. Act was initially such a faction within Labour. Labor and the Liberals in Australia are known to be riddled with back room factionalism.)

Third, and most important, we will see new bizarre deals being done. If National, say, wants to protect a support party like Act from oblivion, and wants to ensure that all votes for the right are qualifying votes, it will need to do some kind of deal that gets Act over the five percent party-vote threshold. Such a deal would require National to invite some of its supporters to party-vote Act.

In a fully mature MMP environment, journalists and voters will understand that the electorate vote is a personal vote, and that it is meaningless to claim that Labour supporters who vote Goldsmith in Epsom, as their least disliked contestant, are somehow voting National.

Under First Past the Post, which we still have in the electorate vote, there are no tactical votes, only effective and ineffective votes. The procedure that effective voters follow is to determine who are the two contestants, and to separate them from the also-rans. An effective vote is for a contestant. Thus, in Epsom, an effective vote will be for Goldsmith or Banks. Any other vote, including a vote for Parker, will be an ineffective vote; a wasted vote.

The problem, inasmuch as it is a problem, could be partially resolved by adopting preferential voting in electorates. Thus many Labour supporters might rank Parker, Goldsmith and Banks in that order, ensuring that their preference for Goldsmith over Banks would count. Many National supporters, on the other hand, would vote Banks, Goldsmith, Parker in that order. A deal would still have been done to get National voters to rank Banks ahead of Goldsmith. But each party would be able to stand an electorate candidate without fear of "splitting the vote", (In 1993, many National candidates won because, in most electorates, the left-wing majority divided their votes. Likewise, in 2001, John Banks became mayor of Auckland because voters opposed to him split their votes between Fletcher and McCarten.)

It could be argued that National's decision to not stand candidates in the Maori electorates is more underhand than anything they are doing in Epsom. But nobody worries about that. Our perception of underhandedness in some cases but not others reflects little more than media preoccupation. (Indeed it remains a puzzle why Epsom gets so much media attention, and Rodney gets so little.)

Our present version of proportional representation is fair (it minimises party disqualifications), creates plenty of drama, and creates stable strong governments in which one smaller party usually provides a stabilising influence. Nobody could call the Clark or Key governments weak. While the Maori Party was hardly a "tail" wagging the National "dog", it has given the National-led government a representative feel, a legitimacy, which would have been missing in a pure coalition of the Right.

One final point. It is only now that people at starting to ask if Don Brash has any medium-term commitment to his version of Act, in the event that he doesn't gain a ministerial position in the next government. It's starting to look as if Brash has come to bury Act, not to save it. Will the captain be the first to leave the sinking ship?

Keith Rankin is a lecturer in Unitec's Department of Accounting and Finance

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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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