Words by Dr. Luke Oldfield
Photo by Koon Chakhatrakan on Unsplash
Some elections have a little more on the line than usual.
October 14 could be one of those elections. Polling has suggested that no single party is likely to win a majority of seats and it is a coin toss as to whether New Zealand First will again be resurrected.
Polling has also suggested that the three smaller parties represented in the 53rd parliament will be returned: the Green Party of Aotearoa New Zealand, Te Pati Māori, and ACT. Each of these parties now occupy policy platforms which place them squarely on the left or right of the political spectrum.
Following last year’s parliament protests, some pundits have argued that we’d see the growing popularity of anti-establishment parties, whose political ideology might be best described as conspirational. What the New Zealand Election Study has told us, however, is that none of these newly formed parties are likely to be electorally viable.
Without such a dramatic turn of events come election day, the make-up of cabinet will probably skew left or right but stick within the bounds of constitutional norms.
That does not mean 2023 will be any less consequential.
Photo by Cyrus Crossan on Unsplas
A close election increases the likelihood of a large party being reliant on the support of a smaller party further from the centre. This is especially true if New Zealand First were unable to revive themselves at the ballot box, increasing the likelihood of a government embracing a more widely felt reform agenda.
Meanwhile, the party holding the balance of power after the election will need to decide how to be involved in government while still maintaining a support base.
Since the introduction of MMP, smaller parties entering into governing agreements have tended to fare worse at the ballot box next time around. Raymond Miller and Jennifer Curtin from the University of Auckland described this vexed issue as Counting the Costs of Coalition, in which they detail the electoral consequences faced by smaller parties for enjoying the baubles of office.
But if a majority coalition were to form on the left or right, it could speed up the legislative process.
Such an outcome would be paradoxical in a way, especially in 2023, when there are few notable differences in policy between the two largest parties, especially when one looks past the culture war and appraises each according to their core social and economic platforms.
The introduction of MMP was advocated for on the basis that it could rein in the speed of parliamentary decision making. Former Prime Minister Geoffrey Palmer once referred to the passage of legislation in New Zealand’s First Past the Post electoral system as being “the fastest law in the west”.
Housing is one area where the election result could quickly reimpose a pre-covid status quo or permanently break from the collective inertia of the past.
As the cost of buying a home has ballooned over the past 20 years, successive governments became weary of voters servicing large mortgages. A commitment to fiscal prudence kept interest rates low, which in-turn drove up house prices further.
Whether house prices bolt away again will depend on the legislative direction shaped by smaller parties with distinct ideological differences.
COVID-19 gave this fiscal strategy a jolt. Interest rates rose when pandemic-related spending and other global economic shocks began impacting inflation. Fiscal policy will play a part in determining how quickly they fall again, and to what level.
A National-led government (with ACT) has signalled it would cut public spending as a means to implement wide-ranging tax cuts. While a Labour-led government (with the Greens and/ or Te Pati Māori) might look to broaden the safety net for those doing it tough by increasing taxes on the most wealthy New Zealanders. The less talked about alternative for either bloc would be to simply borrow more.
Whether house prices bolt away again will depend on the legislative direction shaped by smaller parties with distinct ideological differences.
ACT has called for the reinstatement of tax deductibles on rentals for investors while opposing housing densification and major public works such as the Auckland Light Rail project. The Green party wants densification to continue alongside more public housing and the development of comprehensive public transport infrastructure.
Taken together, it can be assumed that house prices would rise faster under a National-led government than a Labour-led one.
The role of minor parties in the 2023 election then poses an intriguing question for voters who might have struggled to differentiate between the two larger parties.
The left, the right, or somewhere nearer the centre?
It is the sort of question a 78-year-old former Deputy Prime Minister might want voters to ponder.
Dr. Luke Oldfield has a PhD in Political Science and International Relations. He’s a Research Associate at the Public Policy Institute, the University of Auckland.
