Keith Rankin Analysis – Political Culture and Close Elections

Analysis by Keith Rankin.

When countries’ national elections are closely fought, it means that the median voters critically determine the parliamentary or congressional outcome. But, though depending to a considerable extent on the prevailing political culture, the centre-of-gravity of the resulting government may be far from that median usually ‘centrist’ position of the voters.

The Aotearoan case

Aotearoa achieved something very rare in 1992 and 1993; a complete change of electoral system. Aotearoans were fed up with extremist winner-takes-all politics, where the ‘winner’ almost never got a majority of votes; and where the outcome in non-battleground electoral districts was purely academic, though ‘academic’ in the best sense of that word.

Ironically, the change was initiated by New Zealand’s ‘right-wing’ government of the last half century; the Bolger-Richardson National government which edged out the Lange-Douglas Labour government for this ‘honour’. (In both cases, the Prime Minister was comparatively ‘centrist’, but with extreme economic liberals as Ministers of Finance, although Roger Douglas was a relative latecomer to the cause of neoliberalism. In a sense, Prime Minister Jim Bolger did a ‘David Cameron’; expecting to put the matter of proportional representation to rest, just as Cameron expected his referendum in 2016 to dispel agitation for British exit ‘Brexit’ from the European Union.) We may also note that the Shipley-Birch government in 1998 and 1999 was very right-wing, having – in 1997 and 1998 – ousted both Prime Minister Bolger and Treasurer Winston Peters; in this case it was Prime Minister Shipley who was seen as more right-wing than Finance Minister Birch.

(There is some chatter – eg Chris Trotter, Nothing Left without Labour, 19 Dec 2023 – about as to whether the new government of Aotearoa New Zealand will be its “most right” ever. Time will tell of course, and there are alarming similarities showing between present Finance Minister Nicola Willis and 1990-1994 Finance Minister Ruth Richardson. For the last 100 years, I would rate the early Depression governments from 1930 to January 1933 as the most right-wing. This period from 1930, which commenced with the death in office of Prime Minister Joseph Ward, includes a Depression election at the end of 1931; an election which saw Labour, already in Opposition, trounced. In 1930 and 1932, Prime Minister George Forbes was also Finance Minister. In 1932 the extreme economic liberal, William Downie Stewart, was Finance Minister. In 1933, as in 1994, the government turned towards the political centre after the ousting of Stewart. The catalyst in 1933 was a critical change to monetary policy; the devaluation of the New Zealand pound which set New Zealand onto its eventual recovery path. Today’s byword for the 1932 and 1992 governments was ‘austerity’; we in Aotearoa sense – palpably – that austerity is also how the mid-2020s will be remembered.)

The hope in 1992 was that proportionally-elected governments would be loose coalitions, and that all parties in Parliament would contribute to some extent to the governance of New Zealand. And indeed we have seen that at times, with the ‘left-wing’ Green Party contributing to some policy delivery under a centre-right National-led government, and with the then radically-centrist Māori Party accepting the Prime Minister’s invitation to contribute formally to the governance process in the early 2010s.

The political culture in New Zealand – or at least the elite political culture – remained committed to binary politics; to the adversarial politics of Governments and Oppositions shouting at each other across a political theatre designed precisely for that kind of politics. As Peter Dunne – former leader of the former centrist United Party, a man who held the balance of power in three Parliaments this century – once said, the parties form into (or are formed into) “job lots” of the Left and the Right. In New Zealand’s history since 1996 of proportionally-elected governments, only three successful parties have resisted pre-election binarisation, and each only partially so: United, New Zealand First, and the previous incarnation of Te Pāti Māori (generally known then as the Māori Party).

As 2023 unfolded, it was looking like two distinct job lots would be fighting it out: National and Act as the Right; and Labour, Green and Te Pāti Māori as the Left. National and Labour were understood to be quasi-centrist neoliberal parties with nearly identical macroeconomic policies: fiscal conservatism laced with monetary austerity. But they had different political cultures: whereas National still represented the Old Right Elites (and rural New Zealand in general), Labour’s power base was the expanding New Left Elites, including the New Māori Elite. Elite politics – the politics of optics over substance, the politics of wilful neglect of the disadvantaged, and the politics of health and education mandates – was becoming increasingly adversarial, indeed becoming visceral.

Out of this cocktail of despair, Winston Peters’ nationalist New Zealand First Party – sometimes semi-radical, genuinely centrist – re-emerged, to the chagrin of the entire political class. But it New Zealand First had to be attached to the National-Act job lot. Peters and Labour had ruled each other out in 2022; and in a way that could not easily be undone. So one of the election campaign’s main ‘gotcha’ games was for the mainstream political media to force National leader Christopher Luxon to explicitly admit New Zealand First into his job lot of Parties, and then to blame Luxon’s ‘moment of weakness’ for Peters’ concurrent rise in the political polls.

The political polls had always indicated that the 2023 election would be a close – even ‘knife-edge’ – contest between the two designated job lots. The voters’ quandary was how to choose a moderate rather than an extreme government, given the relatively extreme positions on the left-right spectrum being taken by Te Pāti Māori, Green and Act. The quandary was exacerbated by the voters’ wish for a non-austere government, when both Labour, National and Act were firmly committed to fiscal austerity, and there was no intellectual commitment from Green or Māori towards an alternative to fiscal austerity.

(2023 was looking like an MMP – proportional – rerun of the 1931 and 1990 elections. We might note here that Joseph Ward’s United Party – unconnected to Peter’s Dunne’s more recent United – was a centrist party in the 1920s, the remnants of Richard Seddon’s Liberals. And, or at least it’s commonly believed, that Ward – then 72 years old, and perceived by some as a bit doddery – won the 1928 election because he misread his speech notes, and promised to raise a 70 million pound loan, when it’s believed he meant £7 million. Fiscal non-austerity is popular among the non-elite; and 1927 had been a terrible year for the New Zealand economy, under the public financial management of the fiscal ultra-conservative William Downie Stewart. More farmers walked off their farms in 1927 than in the Great Depression of the early 1930s.)

There is a party of the ‘radical centre’ in New Zealand – TOP, the Opportunities Party – but it never stood a chance of breeching the five-percent party-vote threshold in 2017, 2020, or 2023. And even TOP has deradicalised, presumably to edge closer to the mainstream fiscal narrative. I heard no mention from TOP or anyone else, in 2023, of a Universal Basic Income; a UBI, once TOP’s cornerstone policy, is counter-elite, hated equally by the elite left and the elite right. The message in 2023, to non-elite voters, was to vote for the elite job-lot they detested least, rather than to risk ‘wasting’ one’s vote on a party that couldn’t make the threshold. Since the first proportional election is 1996, no genuinely new party has made it past the five-percent barrier. (The ‘minor parties’ are all offshoots of ‘major parties’: the Green Party and Jim Anderton’s Progressive Party were offshoots of the Alliance, itself formed as New Labour, a Labour Party offshoot; Act was another offshoot of Labour; New Zealand First was an offshoot of National; Te Pāti Māori was an offshoot of Labour; United was an offshoot of both National and Labour.)

New Zealand voters have developed two techniques for moderating the left-right job-lot fait-accompli. They could tactically switch to United (as they did in 2002) or New Zealand First (as in 2005 and 2017) or the Māori Party (as they might have done in 2008 or 2017, but didn’t). The other possible tactic is for supporters of one of the ‘major parties’ – National or Labour – to switch to the other as a way of minimising the input in government of the minor party which they dislike the most. We saw that in 1999, 2008, and 2020. (In 2020, Prime Minister Jacinda Ardern called this other-party supporters “lending their vote” to Labour.)

What can happen is that a close ‘job-lot’ outcome – a close binary outcome between Left and Right – can increase the leverage in government of a small but extremist coalition partner. Act played that role of fear-nemesis to the Left, whereas Green is the traditional fear-nemesis of the Right. This is what is really meant by the ‘tail wagging the dog’; when an extremist party – or at least an adjudged extremist party – has excessive leverage, especially in close-election cases when the median voter supports a party like TOP.

Imagine if this present New Zealand government did not have its New Zealand First “hand-brake”, as Winston Peters accurately paints his intermittent role in New Zealand’s post-1993 proportional governance culture. That ‘hand-brake’ culture hasn’t developed to the point where the political class would be able to countenance a ‘grand-coalition’ of National and Labour. Indeed the median voter in New Zealand is not a bland centrist; not an elitist centrist. A bland-grand-coalition would only have the optics of centrist politics; it would not at all be in touch with non-elite voters.

Very few Prime Ministers in New Zealand have found a centrist position that’s in touch with middle New Zealand. Michael Joseph Savage did. Richard Seddon did. Joseph Ward did, briefly and too some extent inadvertently; but Ward wasn’t a fiscal conservative. And, perhaps belatedly, nostalgia is reviving the legacy of Robert Muldoon; he who helped New Zealand get through its second worst global economic crisis. On RNZ’s The Panel a few weeks ago, I heard someone suggest that Muldoon was New Zealand’s last “socialist” Prime Minister. To the great surprise of that show’s host, people texted in, in full agreement with that ‘last socialist’ proposition, and in a distinctly approving way.

Despite proportional representation, New Zealand’s political culture favours unpopular governments, and adversarial processes of rhetoric and repeal. Aotearoa New Zealand, one of the most privately indebted countries in the world can only elect governments which don’t pursue a ‘duty-of-care’ approach towards ordinary Aotearoans; the main parties are averse to spending money on social-wage services or universal public income support. Indeed, since 1994, ‘fiscal responsibility’ – read ‘wilful neglect’ – is embedded in the Public Finance Act; an Act which I would argue has become central to New Zealand’s de facto constitution.

To understand a political culture, comparisons need to be made with other political jurisdictions, with other sovereignties.

United States

The United States’ ‘parliament’ is Congress, elected on a two-year electoral cycle. Sometimes – like now – two years seems too long. The United States’ polity represents the ‘mother of all adversarial cultures’.

In the 2022 election, Congress flipped, giving the Republican Party a narrow win. That Republican Congress is significantly more extreme than just about any previous Congress, in large part because of the narrowness of its majority. This situation mainly arises because American culture has become so adversarial that the large Democrat minority voted with the Republican extremists to oust the Republican moderate – Kevin McCarthy – from his role as Speaker. (Speaker is the nearest to a Prime Minister that exists in the American system.) The result was an impasse of several weeks, and the eventual election of a Speaker – Mike Johnson – who is a conservative hardliner who endorsed the conspiracy theory that Donald Trump really won the 2020 presidential election.

In the United States system, close elections lead to more extreme outcomes, in complete contravention of the voters’ voice.

Israel

Israel has a proportional system, which allows for a much wider range of political parties than does New Zealand’s ‘MMP’ proportional system. The last two elections have been very close, with its multiparty ‘job lots’ only partly determined by the left-right political spectrum. Personality politics plays a big part.

Two elections ago the ‘man who would be king’ of Israel – Bejamin Netanyahu – was disempowered by an assortment of parties across the spectrum, including a small party supported by Palestinian Israelis. The temperature in this Levantine ‘powder-keg’ turned down a notch. But not for long. In the next election, with a sliver of a margin, Netanyahu was able to resume power by turning to the small ultra-Neozionist rump of his Parliament. The result is ‘history-in-the-present’, as we witness the brutal programmes to ethnically clear Gaza, and to squeeze the Palestinians out of any form of meaningful life in the West Bank and East Jerusalem. To maintain power during this electoral cycle, Netanyahu has no choice but to fall in line with his government’s most extreme voices. For perhaps most Israelis, the next election cannot come soon enough.

Again, given the prevailing political culture, close elections can lead to extreme outcomes.

France

In France – a European exception, without proportional representation – there has been a complete turnover of major parties. France’s equivalents of National and Labour both died in the 2010s. Neither seems capable of resurrection. In their place is a centre party – Renaissance – that looks like a mini-grand-coalition, a populist right party, and a new leftwing alliance. There are no multiparty job-lots as such; rather each party itself is a coalition of factions.  A degree of stability is ensured by the two-ballot system; a system that was used in Aotearoa New Zealand in 1908 and 1911, but abolished in 1913 by one of New Zealand’s most right-wing governments (led by William Massey), and one with a paper-thin majority. (Massey’s first government formed mid-term when ‘Independent Liberal’ Gordon Coates was coaxed by Massey to join the conservative Reform Party. Massey’s first action was to abolish the two-ballot system – effectively preferential voting as in Australia – and return to the First Past the Post system whereby many elected representatives receive well under half of all votes cast.)

Under its present configuration of parties, it’s hard to see how Emmanuel Macron’s Renaissance Party cannot control France’s parliament. So, it will be the back-room coalitions which determine the extremity or otherwise of future French parliaments.

United Kingdom

The next election in the United Kingdom looks like being fought between a divided – and somewhat conservative Labour Party – and a Conservative Party which has outstayed its welcome. I am guessing that the centrist Liberal Democrats will score well, though the outcome will be determined by the balance of unpopularity between Labour and Conservative. If the balance of unpopularity is a fine one, and the Liberal Democrats go for a programme like that in New Zealand of TOP, then the United Kingdom may eventually achieve an outcome in line with popular appeal. But there are many ‘ifs’ and ‘maybes’.

The United Kingdom has had a deeply frustrating time with its democracy, of late. The point to note here is that those people voting for large small parties – like UKIP in United Kingdom, and the former Social Credit in New Zealand – and people in ‘safe’ constituencies, are rendered invisible to the elite political classes. One result is that David Cameron made a huge political mistake in 2015, promising a referendum on the United Kingdom’s membership of the European Union. The unexpected outcome was the result of a rare opportunity by those rendered invisible by the First Past the Post system, to render themselves visible.

Germany

Germany uses the MMP proportional system, the prototype of the New Zealand system. Before World War Two it had a different proportional system, with lower thresholds. As is well known, Germany gained a very extreme government in 1932, as the Great Depression peaked; a great depression made especially severe by both the post World War One Treaty of Versailles and the needless fiscal conservatism (ie austerity) of the centre-left coalition government prior to 1932. The Nazi Party came into the Bundestag (Parliament) on an anti-austerity economic programme, revealing its true colours (of national expansionism and ethnic scapegoating) later, once entrenched in power. The path to the Nazi outcome was a leftish government pursuing deflation, extreme fiscal conservatism; a mix of austerity and unimagination.

Elections were held in Germany in May 1928 (2.6% to the Nazis), Sep 1930 (18.3% to the Nazis), July 1932 (37.3% to the Nazis), Nov 1932 (33.1% to the Nazis), March 1933 (43.9% to the Nazis), and Nov 1933 (92.1%! to the Nazis). Before the Great Depression the Nazi party was a ‘lunatic fringe’ party. Adolf Hitler rode to power on the path of political instability and fiscal austerity.

In Germany today, while the parties in the present Bundestag cover a wide spectrum of ideologies, the post-war culture is to form coalitions around the centre, especially in a very close election. The problem is that the centre in Germany – defined by the Social Democrats (like NZ Labour) and the Christian Democrats (like NZ National) – is a centre of bland fiscal conservatism and of export-focussed mercantilism. We should not look to Germany to find solutions to the world’s financial problems.

New Zealand again

In New Zealand, consider these three-election sequences. The statistic quoted will be the percentage of votes for the parties to the left of (and opposed to) the leading conservative party.

In each case, in the middle year, National (or its equivalent, Reform) swept to power, following centre-left governments which had ‘lost their mojo’.

In the first three cases (all first-past-the-post elections) the centre-left subsequently swept back in the popular vote. (Though, thanks to the prevailing voting system, in 1978 and 1993 there was no change of government. Even in 1935, Labour’s route to power may have depended on a split in the right-wing vote; the extreme-right Democrats got 7.8% of the vote, and split the vote in many electorates.) The centre-right governments of 1931, 1975 and 1990, which lost favour massively in the subsequent election, moved away from policies of austerity; real austerity (in 1993) or perceived austerity (in 1978).

In 2011, something different happened. The centre-left failed to get its vote back. Labour was looking very divided and uncool, whereas the National-led government managed its optics well, taking credit for a re-emergence from the Global Financial Crisis. Part of that political management was the creation of the impression that the 2008 to 2011 government was more centrist than right-wing.

What will happen in 2026? Just now I heard Sue Bradford – former Green left-wing MP – comparing this new government with the National government elected in 1990. I think she’s correct. My sense is that the present government is as intent on making itself unpopular as that early 1990s’ government was. (Indeed both Finance Ministers were young; Ruth Richardson was 40, and Nicola Willis is 42.)

The difference is that Labour (with the other centre-left parties in Labour’s job lot) also gives the appearance that it is similarly intent on retaining their 2023 levels of unpopularity; as they were in 2011 after 2008, and also as the British Labour Party did after Margaret Thatcher gained power in the United Kingdom in 1979.

The 1935 to 1938 Labour government also gained a degree of unpopularity, with left and right factions seeking to find ways to renege on its radical centrist promises of universal social security and superannuation. In the end it was Michael Joseph Savage’s political skills in 1938 that enabled Labour to storm to victory in 1938, and to stay in power for 14 years. New Zealand voters are looking forward to a non-austere non-elitist non-ideological government in 2026; a government with pragmatic imagination (no, that’s not an oxymoron). Good luck to Jo and Joe Median.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.