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PoliticsJune 9, 2018

Life after Colin: Can the rebranded Conservatives rescue the NZ right?

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They might have rebranded, they want us to know they’ve changed. And yet the party now known as New Conservative say they have the same values as when they were just the Conservatives. Is there any chance they’ll be taken seriously?

The most important thing to get across about the New Conservative Party is that they really do believe what they plan to campaign on. They really do believe, for example, that marriage should be between one man and one woman. They really do believe that there are biologically only two genders. They really do believe that all internet pornography should be blocked, except for adults who register with their Internet Service Provider. These aren’t populist positions cynically adopted to appeal to voters – they’re the entire reason for the party to exist. And arguably, they aren’t even very popular.

In parts of New Zealand social liberalism has seemed to be on an inevitable march. There was the cross-party consensus upholding the anti-smacking bill, despite a one sided referendum against it. Marriage equality passed, again with reasonably wide cross-party support. Upcoming referendums and conscience votes on decriminalising abortion and euthanasia look promising for progressives. The new government’s attitudes towards drugs and crime are starkly different to the last lot. And with all of those issues that have gone through, the sky clearly hasn’t fallen, despite the dire warnings.

Leighton Baker, leader of the Conservative Party turned leader of the New Conservative Party, as relaunched this week, doesn’t want a bar of it. And he rejects the suggestion that their alternative, with its edict on how adults should live their lives, what choices they make, who they love, amounts to social authoritarianism. Rather than being authoritarian, says Baker, he wants “the people” to have choices instead of “the politicians”. The party wants binding referendums on everything that currently becomes a conscience vote in parliament – it’s clear many in the party are still driven by the grievance of having their anti-smacking referendum ignored.

But what if there was a binding referendum on, say, decriminalising abortion, and they lost? And doesn’t that bind public policy to majority rule? “There’s some things we like, and some things we don’t, and it comes down to whether we want to live in a real democracy,” says Baker. “If we have a democracy that only support what I want, that’s not a democracy, that’s an elected dictatorship.” The logic is simple and seductive, but as the experience of Britain after the Brexit referendum shows, such votes can have wildly damaging and unexpected outcomes. And the 48% tend to absolutely hate having decisions forced on them by the 52%. 

At the heart of New Conservative’s world view is nuclear, heteronormative families. “We’re not a party that’s making a whole lot of stuff up,” says Baker. “What we’re looking at at the moment is a lot of marriage breakdown, and when we see marriage breakdown the statistics directly rate to imprisonment, abuse, poverty. Surely, wisdom would say, why don’t we strengthen marriages?” One of the aspects of their families policy is state funding pre-marriage training – which would be “highly encouraged,” as well as state sponsored counselling for couples experiencing marital problems. It’s telling that on their new website, four of the five-man party leadership team mention being married in their bio. 

It’s also telling how firmly the rebrand is about ditching the baggage left behind by the guy who led them into the 2014 election – their best ever result. In the press release announcing the new name, Baker pointedly concludes that the rebrand is about “allowing us to disconnect from a history that has nothing to do with who we are”.

The events surrounding Colin Craig, the implosion of his political career, and collapse in moral standing among conservative people have been litigated endlessly – quite literally, for that matter. When Colin Craig tried to resurrect his political career and launch legal action against Jordan Williams, wife Helen Craig was at his side, an implicit nod to the political value of marriage in conservative circles.

Baker is insistent that Craig has no role whatsoever in the party any more. Not as a public face, not as a backroom fixer, not even as a financial backer. The last leader “destroyed where the party was heading”, reckons Baker. It doesn’t seem like he’ll be welcomed back. 

Colin Craig announces legal action, which prompted Jordan Williams to launch legal action. Photo: Phil Walter/Getty

Baker says the party is feeling buoyant at the moment. But – why? Between the 2014 and 2017 elections, the party lost close to 95% of their voters. They’ve still got more than the 500 members needed to stand for the party vote (it’s unclear exactly how many) but Baker says they need to rebuild across the country to be a genuine electoral force. He says there are reasonable teams in Christchurch, where he lives, and Auckland, but that there was a big membership drop in the wake of the post-2014 debacle.

So where did those members go? Some, according to Baker, have gone to National, to try and influence a party with rock solid electoral prospects. The ones who stayed felt there was “a void for a Conservative voice”, says Baker. They don’t want to share a party with relative liberals within National like top MPs Amy Adams and Nikki Kaye. Would they be happy sharing a party with conservatives like Judith Collins, Simeon Brown or Simon O’Connor? There weren’t any individuals Leighton Baker was keen to endorse. Given National have shown absolutely no interest in getting defined by social issues this term, it’s not hard to see why. 

At some stage, though, New Conservative may have a choice. There have been rumours floating around about a right leaning MP splitting off from the mothership and starting a new conservative ally for National, or joining an existing party. That would then lead to the possibility of a coat-tailing deal to game the MMP system.

Just before the 2014 election, then-PM John Key ruled out doing any sort of seat deal with the Conservatives, which meant that despite getting almost 4% of the party vote, they had no path into parliament. Key seemingly didn’t rate Colin Craig, saying in June of that year in an interview with The Nation that he struggled to come up with one good thing Mr Craig had done that year. Besides, Key didn’t need an ally in 2014 like Simon Bridges might need an ally in 2020. In a recent interview with Breakfast, Bridges admitted he’s having conversations with people around the right of politics to see if they could work. Was the New Conservative Party one of those groups? Baker wouldn’t say.

Of course, an ally can’t just be magicked up out of thin air. For a party to develop a following, they need oxygen and attention. Since the messy departure of Colin Craig, the party has had literally none of it. Leighton Baker says he was interviewed once by a journalist at a major media outlet for the 2017 election (full disclosure, that journalist was me for Newstalk ZB). The interview took place on the 24th of September – the day after votes were counted. That sense of grievance at the media is clear in the party. Board member Fraser Calvert’s website bio says there is a “growing appreciation by him and many conservatives that we cannot trust the media any more and the liberal and academic bias fuelled by Hollywood shows how far we are removed from a sane society with common sense values.”

So why will 2020 be any different? The most likely outcome is that it won’t be – minor parties have historically found getting into parliament an almost insurmountable goal unless they already had an MP to build around. And parties in that space – Christian Heritage, the Kiwi Party, the Family Party – have never made it happen. But the ideas that drive the Conservative Party aren’t going to go away, regardless of what electoral vehicle they coalesce around. And given major unaddressed social issues could erupt between now and the next election, the rebrand may have been perfectly timed for the party to rise again. 


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Helen Clark and Jacinda Ardern at the Labour campaign launch in August 2017. Photo by Dave Rowland/Getty Images
Helen Clark and Jacinda Ardern at the Labour campaign launch in August 2017. Photo by Dave Rowland/Getty Images

PoliticsJune 7, 2018

Does Jacinda Ardern face a Helen Clark style winter of discontent?

Helen Clark and Jacinda Ardern at the Labour campaign launch in August 2017. Photo by Dave Rowland/Getty Images
Helen Clark and Jacinda Ardern at the Labour campaign launch in August 2017. Photo by Dave Rowland/Getty Images

From day one, Clark’s government was confronted by a revolt from the NZ business world that came to be known as the ‘winter of discontent’. There is a similar chill in the air now, writes Branko Marcetic

No matter what Jacinda Ardern does, she can’t quite seem to win over the business world.

Since last year’s election, the public has been treated to a constant stream of bad news about business confidence, which plummeted to an eight-year low immediately after the government formed, and has remained stubbornly low. The prime minister has been courting business leaders, assuring them this pessimism doesn’t reflect reality. Meanwhile, business trade groups have publicly complained about Labour’s planned legislation, such as the union-friendly Employment Relations Amendment Bill, changes to the 90-day trial period and, most recently, its proposed Fair Pay Agreement system for collective bargaining.

If it’s all giving you a severe case of déjà vu, there may be good reason. The events of the sixth Labour government’s first year are eerily similar to those of the fifth Labour government’s first year, when Helen Clark became prime minister on the back of a campaign in 1999 that promised a reversal of course from the preceding decade’s market-wedded direction and to undo some of its more radical reforms.

From her first day in power, Clark faced a revolt by the New Zealand business world that came to be known as the “winter of discontent”, aided by international condemnation of her “socialist” government and news coverage that, for the most part, supported her critics’ narrative. The whole pushback ultimately led her to scale back her ambitions.

The whole affair lasted closer to a year than a single season. Business groups spent the 1999 election campaign attacking the policies Labour campaigned on – namely, repealing the anti-union Employment Contracts Act (ECA), raising taxes on high earners and reversing the year-old ACC reforms that had opened accident insurance to private competition.

Labour’s first year in power had the bad luck of coinciding with several trends that were bad for business. The New Zealand dollar nose-dived throughout the year, frequently ascribed to the new government in news reports even as economists pointed out there was little to no connection. The year 2000 also saw oil prices jump, another trend the new government had no power over, but which put a further strain on production costs.

But the “winter” had started long before this. From the very first day after the election, groups like the Northern Employers and Manufacturers Association, the Employers’ Federation and Federated Farmers began warning these policies would cost jobs and hurt the economy. Some employment lawyers warned that repealing the ECA would lead to a rash of strikes that in some cases would cripple industries. Calling Labour’s policies “radical” and “Muldoonist”, the Business Roundtable’s Roger Kerr charged they would hurt economic growth and be “negative for business”.

Finance Minister Michael Cullen, left, Jim Anderton and Prime Minister Helen Clark head for the debating chamber for Cullen’ maiden budget in Parliament, Wellington, 15 June 2000. (Photo by Robert Patterson/Getty Images)

It wasn’t just business trade groups that opposed the policies. BNZ chief economist Tony Alexander came out swinging against the government, calling them “teachers, academics, unionists and social workers” who had “no idea about running a business”, and an “active negative” on the economy. He declared Michael Cullen a “failure” as finance minister and while he later apologised for the remark, he continued to insist that, among other things, raising the minimum wage would push people out of jobs and that its Employment Relations Bill (ERB) was scaring businesses out of hiring people. Gareth Morgan, decades before apparently falling into the well of statism, complained that the government was “anti-growth” and tarred with a “socialist mentality” that repelled overseas investment.

The government also faced international right-wing pressure to conform. The Australian Financial Review ran several op-eds warning New Zealand would be economically isolated and perceived as having “lost the plot”, as did the Asian Wall Street Journal, linking Labour’s reforms to the fall in the New Zealand dollar. A former Australian Liberal leader, an adviser to Republican Presidents Reagan and Bush, and conservative economist Wolfgang Kasper all warned against turning away from what they saw as the successful reforms of the 1980s and 1990s. International credit rating agency Standard & Poor’s warned the economy could weaken thanks to more regulation and spending, higher taxes and a return to interventionist policies.

The opposition made hay out of it all, using phrasing that might sound familiar to today’s readers. Jenny Shipley called the Labour programme “a huge payback to the unions” and a “shopping list of the sort that used to be trotted out in the 1970s and 80s”, suggesting New Zealand would gain a “banana republic reputation”.

The government’s approach to this business opposition didn’t help matters. It had made little attempt to win the already sceptical business world over, and had failed to follow through on a planned national roadshow to educate people about the ERB. Meanwhile, Michael Cullen’s combative style – calling business critics “dinosaurs”, “hysterical” and engaged in “blatantly anti-New Zealand drivel” – seemed to confirm what the government’s critics were saying.

Every week seemed to bring some new, depressing statistic. Business confidence plunged to the lowest in the National Bank survey’s then-12-year history. The Institute of Economic Research recorded the worst plunge in 16 years a month later. The number of Canterbury businesses expecting decline doubled. And Labour slipped steadily in the polls.

Prime Minister Helen Clark holds a press conference flanked by John Hood, Vice Chancelor of Auckland University and chair of the Business to Government Forum (L), Deputy Prime Minister Jim Anderton, and Finance Minister Michael Cullen, 24 October 2000 (Photo by Ross Land/Getty Images)

The constant drum beat of negative coverage drowned out the fact that, well, things weren’t actually that bad. By the time widely publicized fears of a left wing-engineered economic collapse were reaching fever pitch in June, Reserve Bank Deputy Governor Murray Sherwin projected growth of more than 4% for the following two years. He cautioned business leaders and commentators not to talk the economy “into a downward spiral”.

Deutsche Bank Chief Economist Ulf Schoefisch cautioned that “there are a lot of positives out there and the negatives do not justify the current low level of confidence”. Other economists pointed out that the lower exchange rate would be good for exporters. But these facts were drowned out by coverage that overwhelmingly echoed the assertions of the government’s critics.

Cullen had spent that first part of the year warning, similar to Sherwin, that businesses could be talking themselves into a “blue funk”, and that they were creating a cycle of “perpetual grievance” that would end up “spooking customers, workers, other employers and investors”. This appeared to come true when, come August, the Reserve Bank lopped 1.5 percentage points off its initial economic growth projection, citing the fact that uncertainty over Labour’s policy had caused “some deferment of new investment and employment.”

To some extent, the revolt had the desired effect. The government began courting business leaders at private dinners and seminars and more private face-time with MPs. More importantly, it scaled back its ambitions.

Labour dropped plans for a rise in youth minimum wage, four weeks annual leave and a second phase of ACC reforms, as well as employer-funded 12 weeks paid parental leave (taxpayers would instead foot the bill). This created a rift with a humiliated Alliance, its coalition partner, which had championed such policies. Michael Cullen delivered a budget widely described as “boring”, with a $5.9 billion spending cap for three years.

The government also revised certain aspects of the ERB, the legislation most hated by its critics. Some were relatively uncontroversial – allowing some independent contractors to stay defined that way, for instance. In another case, it allowed the use of strike-breakers in some circumstances. Even so, the bill passed relatively intact, much to the chagrin of its critics.

Perhaps this is why, despite all of the government’s compromises, nothing really changed as the winter turned into spring. National pulled ahead of Labour for the first time and businesses continued to sit in a funk over its policies. In October, the Business Roundtable was revealed to have secretly bankrolled a series of newspaper ads featuring ordinary New Zealanders calling for a change in economic policies.

Yet by the end of November, Labour had retaken the lead, optimism about the economy had rebounded and business pessimism about the economy plummeted. On the 9th of December, Cullen declared the “long winter of discontent” over. What happened?

Simply put, the 42% of business people who had expected the economy to worsen by Christmas had been wrong, and the economy experienced an upturn. Economic forecasters Business and Economic Research Ltd (Berl) predicted prosperity that would see the lowest unemployment in 15 years, thanks to an economic recovery led by the export-sector – the very part of the economy that had benefited from the lower dollar commentators and business leaders had spent the year bemoaning.

Economists pointed out that it had taken time for that prosperity to filter out from the rural regions, which benefitted from the low dollar, to the rest of the country. Some, like Ganesh Nana of Berl, complained about the “fickle” nature of business and consumer confidence, which had gone from overjoyed, to despondent, to suddenly overjoyed again.

If we’re currently reliving the events of 2000, this iteration has been far milder – perhaps more a “cold snap of discontent” than a full-blown winter.

Nothing so far matches the ferocity of the business revolt faced by Clark, nor the unceasing march of negative news coverage and even international condemnation from right-wing commentators her government faced. New Zealand businesses have surprisingly acquiesced to certain policies that were condemned 18 years ago, such as a higher minimum wage. Business confidence has clawed back slightly, and consumer confidence is currently above its historical average, even as it’s somewhat shaky. Just look at the muted, if displeased, business reaction to the just-announced Fair Pay Agreement working group, something that, under Clark, would have been met with howls of outrage from the start.

Why this is the case in another story. Ardern’s government appears to have made a concerted attempt to bring business into the fold. It’s also been relatively conservative, signing on to the TPP and meeting businesses halfway in other matters. But Clark’s government wasn’t all that radical either, despite what her critics charged: her most radical action, repealing the ECA, was later described by Jim Bolger as “tiddl[ing] around the edges.”

Just because this particular “winter” isn’t as severe as the first, however, doesn’t mean it couldn’t get that way. All it would take is for the economy to stumble, regardless of the actual cause, and we would likely see a non-stop drumbeat of negative headlines about Labour’s approach similar to what the Clark government experienced.

In any case, there are things we can learn from the first “winter”, first among them that we should take apocalyptic visions from the business world with a grain of salt. Clark’s policies – mostly aimed at rolling back some of the 90s reforms and softening the existing system, rather than fully tilting it back in the opposite direction – never led to the economic armageddon her critics foresaw. In fact, the economy rebounded in a matter of months, and Clark’s government would go on to be ranked first twice in the “Ease of Doing Business” report produced by the World Bank, hardly a bastion of radical left-wing thought.

Despite this, the perceptions of business owners – even unjustified – can have an effect on the country’s economic fortunes, as both Cullen and others warned at the time. It’s a reminder that, whatever the reality, misconceptions can become a self-fulfilling prophecy, something that currently shows signs of happening, even as the economy is relatively strong.

For those cheering on Labour, the most alarming lesson of the episode is that the “winter” did work. Clarked still passed her major policies, but, spooked by the business revolt, she scaled back her ambitions and shelved a number of other policies. If Ardern – a close disciple of Clark’s – has frustrated her fans with her caution, perhaps it’s to avoid a similar scenario.

Of course, business is only one set of voices. With nurses, teachers and others making noises of displeasure since the election, perhaps the Ardern government is seeing the makings of an entirely different revolt.


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