The Whimpering of the State: Policy after MMP

by Brian Easton

Overview

A successor to the widely read The Commercialisation of New Zealand, this book by a leading independent commentator continues the story of the New Zealand reforms, giving a trenchant and critical account of recent political and economic change and its impact on different sectors of New Zealand society. Includes case studies.

Product Details

ISBN-13:	9781869402181
Publisher:	Auckland University Press
Publication date:	02/28/2000
Pages:	288
Product dimensions:	5.50(w) x 8.50(h) x 1.00(d)

Read an Excerpt

The Whimpering of the State

Policy After MMP

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By Brian Easton

Auckland University Press

Copyright © 1999 Brian Easton
All rights reserved.
ISBN: 978-1-77558-215-1

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CHAPTER 1

Policy Making Under MMP

The 1996 change in the method of electing MPs changes the relationship between parliament and the government, and thereby the policy-making process. The theatre of elections and of parliament sometimes obscures this truth and the potential for change in policy outcomes it implies. This change in policy making is the focus of this book, and so in its first chapter we consider the theory of how different electoral mechanisms affect the policy process and outcomes.

Winner-takes-all policy making

Before the electoral reform of 1993, New Zealand's electoral system was the 'first-past-the-post' ('FPP') or 'front-runner' (FR) system, whereby candidates who obtained the most votes (a 'simple plurality' of votes) in an election were elected to parliament. This electoral system tends to generate a policy process of 'winner-takes-all' or WTA (as also do some other electoral systems, such as preferential voting). Once the New Zealand government was commissioned, it was a virtual dictatorship (an 'elected dictatorship', as Lord Hailsham has described the Westminster system), restrained only by the outcome of the next election and by the very unlikely possibility that a New Zealand prime minister would be overthrown by parliament. Undoubtedly, every premier has had to take notice of the government caucus to some extent, but there are a series of mechanisms – including political patronage and the dominance of cabinet in caucus – which makes the caucus of the majority party also beholden to the prime minister. Meanwhile the caucuses of the opposition parties are even more irrelevant to policy formation in the short run.

Although this is not how parliament presents itself, its power under WTA is very limited, once it – or more precisely the majority party – has chosen the prime minister. Cynics even suggest that the political process would be more transparent if a parliament under a WTA regime met immediately after an election, appointed the prime minister, and passed a motion empowering the government to enact such legislation as it needed. They argue that a WTA parliament could then go into recess until after the next election, and the policies would be much the same as actually happens, although there would be less political theatre.

This irrelevance of parliament in past policy making was brutally portrayed by Roger Douglas, the most successful policy-innovating politician of recent decades. His paper, The Politics of Reform: The Art of the Possible' to the right-wing Mont Pelerin Society in 1989 entirely omits any reference to parliament. The anti-democratic prescription of the paper is extraordinary: like similar authoritarian tracts, it uses the rhetoric of democracy, but gives normal language other meanings. Few democrats would quibble with the idea that '[p]olicy starts with people. It emerges from the quality of their observation, knowledge, analysis, imagination and ability to think laterally as to develop the widest range of options.' However, it turns out that the 'people' in this quotation are not the populace but key players in the policy process, as the next sentence illustrates. 'Replacing people who cannot or will not adapt to the new environment is pivotal.'

A summary of his approach is encapsulated in his (blitzkrieg) 'principles'.

1 If a solution makes sense in the medium term, go for it without qualification or hesitation. Nothing else delivers a result which will truly satisfy the public.

2 Consensus among interest groups on quality decisions rarely, if ever, arises before they are made and implemented. It develops, after they are taken, as the decisions deliver satisfactory results to the public.

3 Do not try to advance a step at a time. Define your objectives clearly and move towards them in quantum leaps.

4 Vested interests continuously underestimate their own ability to adjust successfully in an environment where the government is rapidly removing privilege across a wide front.

5 It is uncertainty, not speed, that endangers the success of structural reform programmes. Speed is an essential ingredient in keeping uncertainty down to the lowest possible level.

6 Once the programme begins to be implemented, don't stop until you have completed it. The fire of opponents is much less accurate if they have to shoot at a rapidly moving target.

7 The abolition of privilege is the essence of structural reform.

Given these principles, it is little wonder that when Douglas was Minister of Finance, the majority of the Labour caucus opposed much of his policies – or so they tell us today – and yet were impotent in the face of the blitzkrieg.

Douglas's predecessor, Robert Muldoon, would not have been unsympathetic to this approach. The two might argue about what is 'quality policy' but the broad thrust of both politicians was a disrespect for democracy. The blitzkrieg approach was always a possibility under WTA politics in New Zealand, if the political leadership chose to be ruthless enough. It was repeated in the early years of the Bolger government. The claim that the public will appreciate the policy once it is implemented, albeit without their consent, is a variation on the dictator's 'we know best'.

Multi-party government

What is crucial under the mixed-member-proportional electoral regime (MMP) instituted in 1996 is that a government will only rarely operate under WTA, and then for a short time. This changes the policy process, but the change arises not from MMP per se. Rather, it is extremely unlikely that any single party will have an absolute majority in parliament and hence be able unilaterally to appoint a prime minister and cabinet which can impose their policies on parliament. For policy analysis purposes the single party government (SPG) of WTA is replaced by multi-party government (MPG), also known as non-majority-party government.

The two most common MPGs are one in which the government has a minority in parliament with the support (explicit or tacit) of other parties, and a formal coalition of minority parties joining together to form a majority government. In either case it will not be possible, as a rule, to institute a major policy blitzkrieg – that is, to impose suddenly, and without consultation, a particular policy stance in a major policy area. A minority government will not even have the majority in the house to impose its policies, while a majority coalition government – with the inevitable tension between its partners – will not be able to rely on its two or more caucuses to acquiesce meekly in whatever a cabinet decides. Whether they are in a coalition or minority government, cabinet ministers will have to consult more than in the past with their separate caucuses before decisions are taken.

This applies strictly only where the formal approval of parliament is required, such as the passing of statutes and the appropriation of spending. But even in areas where policy may be initiated without parliamentary authority, there will remain increased caucus and parliamentary scrutiny. Various mechanisms which already exist – select committees, the regulations review committee, private members' bills – are likely to be used more effectively. New ones will develop. This increase in supervision over, and involvement in, the policy process will not occur overnight. The specific path and destination of the change will depend on unique events and situations which will occur during the transition. But a parliament with more control over the policy process seems inevitable.

The policy process under MPG

We can make a number of propositions about the policy process under MPG, although there may be a complicated transition to get there. The logic involves two main assumptions: (1) that a non-majority party government will be more influenced by parliament (propositions 1 to 6); and (2) an MMP-elected parliament will better reflect the electorate's desires (propositions 7 to 10).

The first proposition sums up the conclusion of the previous section, and the remainder largely follow from it.

1: There will be increased parliamentary supervision of policy. (Blitzkriegs will occur very rarely.)

This demand for parliamentary supervision will change the process of legislation. The government is likely to reduce the proportion of legislation which it considers is necessary for governance. There is a long tradition of non-party voting, but only on a narrow set of conscience issues. The range is likely to widen, and the institutional arrangement to be extended, with more opportunities for private members' bills to go to select committees. There will still be bills which will be matters of 'confidence', but they will be less frequent. Between these extremes there may be another sort of bill – 'departmental bills' – which have to address some administrative problem but – like local authority bills – do not involve the confidence of the House. The government will give the select committee considerable discretion over the content and detail. For example, the 1957 Archives Act is now about as antique as some of the archival material it regulates. A new one is necessary, but no government is going to fall as a result of the exact content. Better to let MPs with an interest hear public submissions on a departmental bill and come up with their proposals at the second reading, even though it may be in conflict with the department. So –

2: There will evolve three classes of legislation: government hills, on which the governments standing depends; departmental bills, which the government will introduce but allow considerable freedom of decision to parliament; and 'conscience' bills, which will not typically be voted along party lines.

The next proposition is derived from the first two. In the 1970s as a law professor Geoffrey Palmer criticised the propensity of parliament to be 'the fastest law in the west'. In the 1980s he used these powers to facilitate policy blitzkriegs. In future the opportunities for fast law-making will be much more limited.

3: Policy will usually evolve steadily rather than change quickly as it has done in the recent past.

Parliamentary procedure is not the only means of public consultation. Others will be pursued with greater vigour. It seems likely there will be a move away from the pseudo-consultation we are used to whereby the government, having made all the significant decisions, establishes a 'consultative' committee of carefully chosen persons, the balance of whose views reflects its own. In the longer run there may not only be a more open agenda, but the committee membership may more closely reflect the balance of parties in parliament rather than simply the preferences of the government. We may see a return to the greater use of statutory commissions, as well as select committees acting more vigorously.

4: There will be more public consultation before policy initiatives, and the outcome of the deliberation will be less determined by the government. Appointees to committees will more closely reflect the balance of parties in parliament rather than the preferences of the government.

The bureaucracy will have to change. We do not know if there will be a continuity of government under the new regime, perhaps like the 'continuous ministry' which preceded the Liberal Government of the 1890s. Or there may be sharp changes of personnel, shifting between quite different governments in short succession. What we can be sure of is that the bureaucracy is going to have to adapt. Where there is policy contention, departments will have to maintain an internal capacity to respond to differing party perspectives on policy. Some agencies will evolve conscious systems to do this – perhaps a think tank whose composition reflects political differences, and where a degree of debate is actively promoted.

However, this will be insufficient in the case of economic policy advisers. Under a single-party minority government, a single economic advice agency will be adequate. Under a coalition government, however, neither party is going to give up the Treasury portfolio to the other, because it is too powerful. Associate ministers from a different party from the Minister of Finance will not work, since non-cooperating ones can easily be cut out from effective decision making, as happened under Muldoon and Douglas. It would be foolish to predict the final institutional arrangement, but the parallel in Canberra of a separate Treasury and a Ministry of Finance looms large. In the case of foreign affairs, another area which is likely to be hotly contested for ministerial control in a coalition government, even though there may be considerable bipartisanship, the likely outcome is that the Minister of Overseas Trade will be from one party with the Minister for Foreign Affairs from another.

5: The bureaucracy will consciously incorporate an element of the party differences in its policy-making processes. The biggest change may occur to the Treasury, perhaps by a division into two separate agencies.

There will also be a better quality of implemented policy. Douglas's use of 'quality' in his blitzkrieg rules implicitly meant his policies. Indeed there is hardly a politician who would not make a similar claim. But they are unable to define what they mean by 'quality' except in this circular way. The blitzkrieg rules involve the essential assumption that somehow the policy elite will always make good-quality decisions. Leaving aside the inherent problem of its democratic content, the approach carries severe risks. However efficient it may be, the blitzkrieg goes desperately awry if the initial policy conception is flawed. The blitzkrieg rules tell us only about policy implementation.

The slower, more consensual policy process of MPG is more likely to weed out poor-quality policy, since it is more likely to identify policy mistakes. An underlying assumption of the process of competitive policy advocacy is that there is one right policy. However, a more realistic approach to policy formation is that there is a set of possible policies, only some of which can be totally ruled out. Among those that remain, the eventual decision is based on a combination of taste, gut feeling, and a number of subjective and unpredictable criteria (which makes it very difficult to predict policy outcomes). Thus quality in policy is the absence of policy mistakes, requiring policy reversals, rather than some notion of a 'uniquely right' policy.

6: There will be less poor-quality policy; that is, mistaken policies will be more frequently identified and weeded out.

Policy outcomes

It is difficult to predict precise policy outcomes under any regime. For instance, consider whether the Reserve Bank Act (1989) will be repealed. Leaving aside the obvious question of 'when?', and the obvious response of 'in the long run, inevitably', the equally obvious point is that just as there are many ways to skin a cat, so there are many ways to deal with a policy problem. If there be any doubt about the ineffectiveness of such administrative law, consider the 1964 Reserve Bank Act, which required the Bank to promote the highest degree of production, trade, and employment, and which remained in force for almost two decades after unemployment began rising in the late 1960s. Any politician or adviser who does not know how to pursue a different policy from the current one, without repealing the Reserve Bank Act, is not worth her or his salary. Given the high degree of flexibility here, and in most other policy situations, it is not possible to predict policy outcomes with any precision.

However, there are a few policy outcomes one might predict in the long run, subject to the usual caveats. The predictions are based not so much on MPG government, which determines policy processes, but rather on a parliament elected on MMP principles, and the consequential assumption that policy outcomes will better reflect the wishes of the electorate. By contrast, the WTA governments of the last two decades frequently had policies which the electorate disliked.

The next proposition is a simple one, and carries the most obvious practical implication that policy in the future is likely to be more sensitive to the interests of women.

7: Groups which have tended to be excluded from the policy process in the past will have a greater influence on policy, especially if they have an effective voting power above five percent of the electorate (the MMP threshold).

There is a consistent pattern in the opinion polls contradicting the policy direction of the last decade.

(Continues...)

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Excerpted from The Whimpering of the State by Brian Easton. Copyright © 1999 Brian Easton. Excerpted by permission of Auckland University Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

Contents

Figures,
Preface and Acknowledgements,
Abbreviations,
Prologue: A Permanent Revolution?,
PART 1: THE POLITICS,
1 Policy Making Under MMP,
2 The Coming of MMP,
3 The Loose Canon and the Tight Prior,
4 The Economic Failure,
5 The Politics of Retirement Incomes,
6 Taxation and Public Spending,
7 The Public Sector,
8 The Social Basis for an Economy,
9 The Commercialisation of Democracy,
10 The Health Post-Election Briefings,
PART 2: CASE STUDIES,
11 Health Policy,
12 Core Education,
13 The White Paper on Tertiary Education,
14 Science Policy,
15 Arts Policy,
16 The Ownership of Water,
17 Roading,
18 Telecommunications Policy,
PART 3: THE FUTURE,
19 The Political Future,
20 A New Microeconomic Policy Paradigm?,
Epilogue: Culture and Reform,
Notes,
Bibliography,
Index,