As leader David Seymour heads to Christchurch this weekend to discourse on the state of the nation, an equally relevant question is what is the state of Act?<\/p>\n
In one sense, the party popularity switcharoo with NZ First obfuscates the fact it\u2019s doing pretty well.<\/p>\n
Government, from the dawn of the MMP era in 1996 right up to the 2020 election, ushered most junior coalition partners to the political graveyard from which only Winston Peters would, with admirable frequency, disinter himself.<\/p>\n
But the Greens in 2020 and 2023 demonstrated that a stint in government isn\u2019t necessarily doom, staying healthily above the 5% threshold in both elections, even as Labour\u2019s popularity soared to new heights in 2020.<\/p>\n
Seymour has repeated that trick, polling roughly in line with the Greens during large parts of their stint in Government with Labour.<\/p>\n
By that yardstick, survival is success. The party retains strong support in the Epsom electorate, Act\u2019s historical insurance policy (private Curia polling conducted in the electorate and in neighbouring T\u0101maki last year showed Seymour and Brooke van Velden polling well). It\u2019ll win Epsom in 2026, and T\u0101maki too, but it no longer needs to.<\/p>\n
And yet, it\u2019s just not quite enough.<\/p>\n
All political parties are ambitious, particularly the minor ones, for whom every election dallies with extinction, but few have quite the missionary zeal of the Act Party. You can\u2019t help but feel the party wants a bit more than just survival.<\/p>\n
The party faces an unsympathetic economic and political terrain. In friendlier economic times, when people feel slightly more secure about their jobs and financial situation, a party running on a platform of letting people keep more of their income and rolling back the interventions of the state in people\u2019s lives would probably have an easier ride.<\/p>\n
But as the country enters yet another year of economic malaise, with job security hard to come by, and house prices, that other measure of economic security, falling or flat-lining, voters seem to be favouring parties promising a Government that would step into their lives, rather than step out of them.<\/p>\n
David Seymour with the Jeep he nearly drove up the steps of Parliament. Photo \/ Dean Purcell<\/p>\n
That\u2019s a challenge for Act, but also an opportunity. Last year\u2019s unedifying scrap between Nicola Willis and Ruth Richardson proved there is some political space on the right for a politics of deficit reduction and fiscal sustainability, the issues on which Act is far stronger than other parties.<\/p>\n
While there\u2019s plenty of outrage at Seymour\u2019s penny-pinching on the school lunch programme<\/a>, there\u2019s still a constituency for those outraged that the children the programme is currently feeding will, by the time they retire, inhabit a country in which public services are slashed<\/a> to service a national debt is four times higher than it is even now, according to Treasury forecasts (and that\u2019s assuming there aren\u2019t any earthquakes or pandemics in the next few decades).<\/p>\n By 2065, the Government will spend the same share of the economy on debt-servicing costs as we currently spend on healthcare, the largest portion of all government expenditure. By that year, per capita debt servicing costs will be $10,700 a year in today\u2019s dollars; we\u2019ll be spending nearly twice as much on debt servicing as we will on education.<\/p>\n It\u2019s not an exaggeration to say that one of the primary functions of the state in 2065 will not be to provide services for those then living, but to raise funds to pay for services consumed by those since departed. The future, to the extent that this country has one, will be handcuffed to the debts of the past.<\/p>\n Sadly, today\u2019s children should enjoy their turgid, combustible cottage pies<\/a> \u2013 on current projections, they\u2019re probably the best public services they\u2019ll ever get. If only there were a whakatauk\u012b (proverb) about free lunches \u2026<\/p>\n It doesn\u2019t make for easy politics, though.<\/p>\n A lesson to be taken from the 2020s is that the size and persistence of the deficit do not correlate with the political appetite to reduce it. It\u2019s not difficult to foresee politicians and commentators in the 2030s looking back on the mid-2020s and wondering why so much of political energy was poured into initiatives that increased the deficit, rather than debating ways to reduce it.<\/p>\n Part of this may be because the deficit is now so large that any party, even Act, would struggle to reduce it. If, for example, the Government sacked every single member of the core public service \u2013 about 63,000 people from the wonks at Treasury and the Reserve Bank, to the regulators at the Ministry of Business, Innovation and Employment (MBIE), to the police and Corrections staff, to Customs officers \u2013 yes, fire all of them, and, in salary and other employment costs (and excluding the massive cost of redundancy and Jobseeker benefits), you\u2019d save about $11.1 billion.<\/p>\n Enough to close the deficit, you\u2019d think? No. In fact, you\u2019d still have a deficit of about $3b, roughly the cost of the Interislander ferry replacement project when it was scrapped.<\/p>\n Act makes a virtue of banging unpopular drums. Its effective \u201creal change\u201d slogan speaks to its self-image as a party which isn\u2019t afraid to say unpopular things<\/a>, even if its multiple near-death experiences suggest it should be.<\/p>\n But the deficit is a problem for Act too, because it makes it more difficult for the party to run on what is probably its most popular historical policy: sweeping tax cuts. The deficit doesn\u2019t make tax cuts impossible; it just makes them far, far, harder. In happier times, cutting spending to fund tax cuts is pretty easy, logical politics; these days, cuts that would make Ruth Richardson blush barely get you to break even. <\/p>\n Seymour does plan to talk a bit about the fiscal picture in his speech, but in more moderate and achievable terms \u2013 part of the party\u2019s long moderation from its more radical days as a graduate scheme for campus radicals to its slightly less radical but infinitely more popular current formulation.<\/p>\n Seymour will be picking up on prior remarks favouring further public service consolidation.<\/p>\n There are too many ministries and too many portfolios, he thinks. The New Zealand Initiative, a free-market think tank ideologically aligned with Act, has recently been making noises about cutting the number of ministers and ministries, last year releasing a report which recommended consolidating 43 departments into 20.<\/a><\/p>\n The idea has the benefit of being achievable. The coalition is already consolidating ministries, rolling several into Chris Bishop\u2019s Ministry of Cities, Environment, Regions and Transport or MCERT.<\/a><\/p>\n Act\u2019s other challenge is cultural. Seymour believes the idea behind the Treaty Principles Bill will eventually have its day, but there\u2019s little appetite to actually campaign on something that has failed once and would only fail again in whatever Parliament is elected this year.<\/p>\n Act has to say something on citizenship and race \u2013 but what?<\/p>\n This is where the NZ First comparison is important. The party simply has far greater latitude in these risky policy areas. NZ First can campaign against the India Free Trade Agreement; Act, a party of open markets, can\u2019t. NZ First can put Indian migration at the centre of its campaign; Act, a party of liberal migration politics and urban cosmopolitanism, cannot.<\/p>\nAct Deputy Leader Brooke van Velden. Photo \/ Dean Purcell<\/p>\n