Peter Dunne Address to Tawa Rotary Club

Hon Peter Dunne
Leader, United Future
MP for Ohariu Belmont
Minister of Revenue
Associate Minister of Health

Address to Tawa Rotary Club,
Tawa Bowling Club, Davies Street, Linden
Tuesday 29 May 2007 at 7:00 pm

We are just past the middle of the current Parliamentary term, so it is timely to offer some mid term thoughts on the current state of politics in New Zealand.

When the present government arrangement was reached after the last election, commentators indulged in an orgy of criticism about the inherent instability of the arrangements, and how they could not possibly survive, let alone deliver on the various commitments made.

How silly they look and should feel today.

Had they stopped and thought for more than a mere moment, they would have realised that the government grouping that emerged was inevitable.

It had nothing to do with parties issuing ultimatums, but everything to do with simple mathematics – how to put together 61 votes in Parliament.

When Labour ruled out the Maori Party before the election, they left the only obvious alternative as a Labour, New Zealand First, UnitedFuture grouping so long as it could muster the required 61 votes.

It continues to amaze me that so many were fixated with the prospect of a Labour/Greens coalition that they ignored the obvious.

They also ignored the careful multi-tiered arrangements that emerged.

In addition to the specific confidence and supply agreements with UnitedFuture and New Zealand First which secured the government the required 61 votes, the government also concluded arrangements with the Greens and the Maori Party to abstain on confidence and supply matters.

So the government's actual majority on confidence and supply was the not the mere 61-60 first glance would suggest, but, because of the abstentions of the 10 votes provided by the Greens and the Maori Party, the government's actual majority has been 61 votes to 50.

And the two subsequent defections – one from Labour and one from UnitedFuture – do not alter the situation one iota, as both MPs concerned have committed to continue to support the government for the duration of its term on confidence and supply.

So, despite those who predict the fall of the government any day now, the government is stable, and able to deliver on major policy changes.

The recent Budget was evidence of that.

At the last election, UnitedFuture promised a radical shake up of business taxation and tax relief for charitable donations.

As Minister of Revenue I have worked with the Minister of Finance to produce the biggest tax reform Budget in 20 years.

The business tax rate has been cut to 30%, as we promised; there is improved assistance, equivalent to nearly a 150% write-off, for research and development spending, and the cap on tax rebates for charitable donations is to be abolished altogether, so that from April next year all individual and corporate donations to charities will be tax deductible.

The $20 a week tax relief on Kiwisaver contributions will also be a huge step forward, both in lowering the individual tax burden, and in boosting our poor national savings rate.

And on top of that, we have signalled there is more to come, with a radical shake-up of our international tax rules being introduced to make it more attractive for New Zealand businesses operating overseas, more business tax simplification, and further changes to personal tax arrangements, including the UnitedFuture inspired government discussion paper on income splitting for households, all being key issues over the balance of this year.

The last time there was such a flurry of tax reform was in 1996 – when I was also Minister of Revenue, then in a National-led government – and it simply goes to prove the truth of my claim before the last election that one certainty in politics is "Put UnitedFuture anywhere near government and taxes come down."

The question that now remains is what impact these major changes will have on the political scene over the next few months.

While it is too early at this stage of the electoral cycle to be making firm predictions about the outcome of the next election, if current polling is anything to go by, one would have to observe that it seems the next election is National's for the losing, although that can easily change.

But the polls are not Labour's biggest enemy, anyway.

Labour's biggest problem is voter fatigue or the political clock, which is ticking more loudly as each day goes by.

Voters, it would seem, tire of the same government after three continuous terms.

Only twice in the last 70 years have we had a four term government – the first Labour Government in the aftermath of the Depression and the upheaval of World War Two; and the Holyoake National Government in the comparative stability of the 1960s.

To further complicate the picture, though, both those governments were elected under First Past the Post, whereas today under MMP, election results are less clear cut.

So political history may not be the guide it once was.

But one thing is certain – whichever party wins the largest representation in Parliament at next election will require partners to form a government.

Because Labour and National are dreaming if they believe they can get there by themselves.

Even in the monopoly days of First Past the Post, there were only two occasions – Labour in 1938, and National in the Waterfront Strike election of 1951 – where the winning party scored more than 50% of the popular vote.

Landslide results – like Labour's 1972 win, or National's 1990 victory – would not have given those parties majorities under MMP.

Yet when it comes to working out compatible political partners, Labour and National still have a long way to go.

In the last two Parliaments, UnitedFuture has provided the most reliable support for the Labour-led government in keeping with the provisions of our various confidence and supply agreements.

While we have been able to advance many of our key policy objectives through these agreements and overall play a far more constructive and positive role than many other parties in Parliament, we still see Labour's eyes drifting towards the Greens, the party it has jilted three times at the altar already.

To use the analogy of a marriage, there comes a time in even the most stable and productive of relationships when the wandering eye of one partner ceases to be just an annoyance and becomes a major problem.

What is the point of being the loyal and dutiful one, when the other party is out there playing fast and loose with the field?

My criticism is not of the Greens – relationships between us are growing much stronger and are becoming far more constructive – and, in fact, I suspect they would probably agree with the point I am making, albeit from the different perspective of the party that has been led up the garden path on more than one occasion.

Labour has been far better than National in developing political alliances with a range of parties, but it needs to learn that loyalty is a two way street.

It is not good enough to treat support parties as toys on the shelf, to be picked up and dusted off as needed, and then dumped unceremoniously once a new game comes along.

If Labour likes working with and wants to continue working with UnitedFuture in government after the next election, then it needs to be saying so clearly, and working from now to make it happen.

In many senses, the same applies to National as well.

It is somewhat of an unknown quantity at the moment – a combination of a new and untried leader, and all too tried and found out deputy leader.

National run the risk of conveying to the electorate it is not clear whether it is Mr Key or Mr English who calls the shots.

Mr English is apparently telling business audiences at private meetings that National's best interests of forming a governing arrangement after the next election lie with the Maori Party, because he sees no prospects for New Zealand First or UnitedFuture.

This insight will come as a considerable surprise to Maori Party voters who have astutely worked out that they can get two for the price of one by voting, as they did, for their local Maori Party electorate candidate and giving their party vote, as they did, to Labour.

Their intent was plain.

Their support was conditional on Maori Party MPs supporting Labour.

Will they continue to vote for the Maori Party knowing that Mr English wants to line them up in National's camp?

Also, what incentive is there for New Zealand First and UnitedFuture to show any interest in National, given this arrogant dismissal?

Or are we simply expected to meekly sit and wait, just in case we might be needed to make up the numbers?

And, astoundingly, ACT, which has so slavishly hitched its star to National's wagon, apparently is not even mentioned in the English scenario.

The one answer this inept analysis does provide is why National achieved its worst ever election result under Mr English in 2002.

By contrast, Mr Key is far more astute and politically adept.

He appears to understand inherently that MMP government is about establishing durable partnerships, between like-minded parties, and then working to make those partnerships succeed.

In conversations I had with him, immediately after his election as leader of the National Party, he made it fairly plain that if National could not work with UnitedFuture, it could not work with anybody, which contrasts with his deputy's fanciful view.

After all, UnitedFuture is a modern centre party, focused on New Zealand's best interests.

The recent resignations of some of our more rigidly conservative members have freed us to become more forward looking, which is a positive development, despite the deceitful way in which the plot was carried out.

We are now much better placed to appeal to moderate voters, whose main interest in life is doing the best they can for their families without the moralising interference of the state, or any other group trying to shape their lives.

We promote strong families and vibrant communities.

We seek a fair, and open society, free from poverty, ignorance and prejudice, and based on innovation, self-reliance, justice, and integrity in business and personal dealings.

We support a sustainable environment, and a competitive economy which encourages growth, prosperity, ownership and opportunity, through market policies where possible, and government where necessary.

We want all New Zealanders, whatever their background, race or creed, to have the chance to enjoy all that is good in our country.

Since becoming the leader of his party, Mr Key has echoed many of these themes in his public utterances, to confirm the accuracy of his original comment to me.

I have no doubt at all that we could work together effectively in a governing arrangement, were the opportunity to arise, in just the same way we have with Labour.

That should not come as any great surprise.

It is, after all, what being the centre party is all about.

We have provided confidence and supply to both National and Labour-led governments for 8 of the 11 years MMP has been in place, unlike any other party.

And we remain committed to working in government with the major party best able at the time to ensure we can implement our major policies.

We deliberately keep the door open to both sides, so that whatever the overall political climate, the interests of our supporters will always be on the government's agenda.

But there has to be more to it than that.

To take Mr Key at his word, if the level of compatibility between National and UnitedFuture is high, then he needs to be working now to develop that to the point where people can see a viable government arrangement emerging.

If he does not do that, then the conclusion that will be properly drawn is that the English line has prevailed, and the consequence will likely be a result that sees National, even if it emerges as the largest party in Parliament, once again isolated and out of power, for lack of stable and reliable partners.

I do not think Mr Key sought the National Party leadership for that to happen.

From UnitedFuture's perspective, my political raison d'etre has always been to seek the common ground, and to work constructively and honourably with people on the points we have in common.

I see no conflict in working with National on such a basis, while continuing to honour fully the spirit and provisions of our confidence and supply agreement with the Labour-led government.

It is, as I say, what the centre party does.

At our party conference last year, I signalled a clear shift in direction for UnitedFuture to become much more focused on its role as a genuine, modern centre party, in the mould of similar parties around the world, committed to promoting social justice and looking out for the interests of parents, families and the wider community.

I said we would be stopping our previously insular approach of railing aloofly from the mountain tops about all that was wrong in the world and would instead be reaching out to other parties to work together on matters where we have common ground.

Specifically, I signalled an end to our ongoing bagging of the Greens.
While it might have been good sport, it was hardly forward looking or in keeping with spirit of MMP, and it failed to recognise that while we were rivals we were never going to be competing for the same voter segment.

All our parties have a legitimate contribution to make and I am keen to bring them together to provide a bloc that can exert real influence on the government on those issues where we have common cause.

So it is therefore no coincidence that in recent months UnitedFuture and the Greens have worked together publicly (and privately) on issues such as criminal justice policy; and the appalling harassment of a New Zealand Chinese journalist by New Zealand authorities on the basis of complaints from the Chinese Embassy.

It is also why UnitedFuture, the Greens, the Maori Party and ACT have taken the lead with Madam Speaker in trying to curb the often appalling behaviour of the two old parties at Question Time.

It is why the same group of MMP parties lobbied jointly and successfully in support of the Law Commission's proposals to abolish the outdated law of sedition; and why we have been working together of late to ensure that changes to Births, Deaths and Marriages registration legislation to prevent identity fraud do not also stop legitimate historical and genealogical research as well.

Taken together, these parties account for 14 votes in Parliament – far more than the balance of power – and by working together, where we have common interests, we can thwart the Labour/National club's still strong instincts to treat Parliament as being the domain of just the two of them.

UnitedFuture sees its role to be very much the honest broker that Parliament needs to make government work effectively.

The recent compromise amendment I introduced on the so-called Smacking Bill was a good example.

That arose after a series of individual discussions over a couple of weeks involving the Prime Minister, the Leader of the Opposition, the sponsor of the Bill, and me.

It was about seeking the common good and the points of agreement between parties, rather than all standing on our dignity in splendid isolation and meekly surrendering the debate to some very loud, and extreme groups in our society who were working to hijack public opinion to suit their own narrow ends.

And there is a measure of public support for this broader approach to politics that I am advocating.

The recent Massey University research on government performance showed that, while the overall level of public dissatisfaction remains high, one of the more positive aspects attributed to our MMP system is that is has provided for more political diversity.

The MMP parties, notwithstanding the often vast policy differences between us, are determined to build on that, and send the message clearly to both Labour and National that the days of taking us for granted, or playing us all off against each other are over.

Interestingly, and by contrast, there are now dark mutterings from the two old parties about being held to ransom or threatened with blackmail, something that has never bothered them in the past when they played their divide and rule games with us.

What they need to understand is that this inter-party co-operation is part and parcel of the MMP system, or indeed any system of proportional representation, and that voters like the idea of parties working together on their points of agreement, rather than forever arguing about what they disagree over.

So, looking ahead to the next election, I am reminded of the old saying about the dinosaurs – adapt or die.

The big old party that sits around simply waiting to see where the election cards fall, and desperately hoping it will not need to enter into any post-election arrangements, will probably fail.

The big old party that works now to build actively the relationships required to form a stable government will in all probability be the one to succeed.

The fascinating question to be answered over the next year is which dinosaur will adapt first.

ENDS

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