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Posts tagged ‘elections’

A growing swing to the left in the special votes

The Greens and Labour have been doing increasingly well in the special votes, and National increasingly poorly.

I did a projection, based on the 2011 results, that the Greens probably wouldn’t pick up the extra seat they often do from special votes. But I didn’t call it a prediction, partly because I didn’t intend it to be, but also because the numbers had the Greens only narrowly missing out on that 14th seat. So if the Greens had pushed just a tad further and made it over the line, I wouldn’t have been surprised. I said it was going to be close.

As it happened, it wasn’t close. The Greens had nearly 5,000 votes to spare.

Party Preliminary Projected final Project vs prelim Actual final Actual vs project Actual vs prelim
% Seats % Seats % Seats
National 48.06% 61 47.36% 61 -0.69% 47.04% 60 -0.33% -1.02%
Labour 24.69% 32 25.11% 32 +0.42% 25.13% 32 +0.02% +0.44%
Greens 10.02% 13 10.52% 13 +0.50% 10.70% 14 +0.18% +0.67%
NZ First 8.85% 11 8.54% 11 -0.30% 8.66% 11 +0.12% -0.19%
Māori 1.29% 2 1.38% 2 +0.09% 1.32% 2 -0.06% +0.04%
Act 0.69% 1 0.69% 1 -0.00% 0.69% 1 +0.01% +0.00%
UF 0.22% 1 0.21% 1 -0.00% 0.22% 1 +0.01% +0.00%
Conservative 4.12% 0 3.93% 0 -0.19% 3.97% 0 +0.04% -0.15%
IM 1.26% 0 1.39% 0 +0.12% 1.42% 0 +0.03% +0.16%

To be more specific: The Greens saw their 14th seat shoot not just past National’s 61st, but also past its 60th, to become the 119th quotient. This meant the Greens had room to spare: 4,873 votes less (with no redistribution) and they would’ve stayed on 13, or National would have needed 21,836 more to get to 61. (This is more than the ~18,800 “votes per seat” because National also has the 120th quotient.) For comparison, my projection had the Greens needing 1,139 more than projected to pick up a 14th seat.

Changes in context
What happened? I suggested there were reasons why the specials might swing further left in my projection post:

  • The number of overseas voters doubled this election compared to 2011.
  • Some universities had on-campus polling booths, where a lot of students would have cast advance special votes.

Further on the second point, as Jonathan Marshall suggested on Twitter, unlike 2011’s, this election was during the university semester so more students would have been outside their electorates in the first place.

But I certainly didn’t expect any combination of these effects to add to 5,000 more votes for the Greens alone, so I suspect there’s something else. Also, those reasons are just speculation. For all we know, it could even be related to migration patterns (including domestic migration), though I don’t know that those have actually been changing. The full statistics that the Electoral Commission will release in about two weeks might offer a bit more insight, but it’s hard to discern.

A growing swing since 2008
Beneath this swing, there might be an underlying trend. The Greens have traditionally done well on special votes, of course. But they’re doing increasingly better on specials than they used to, at least since 2008. (I couldn’t easily find preliminary results for 2005.)


The first set of columns is the special vote percentage divided by the preliminary result (so < 1 means a drop), and the second set is the difference between the specials (not total) and preliminary result in percentage points.

Now, take the sparklines with a grain of salt. The scales aren’t consistent between cells, and they each only have three data points anyway.* Also, the two sets of columns are just different measures for the same phenomenon, so the fact that it happens twice adds no weight. (I did both while trying to find a more consistent predictor of special vote impact, and couldn’t.)

But they do broadly indicate an improving trend for Labour and the Greens, and the opposite for National. And the trend isn’t small. In 2008, National lost 0.52 points from specials; this year, they lost 1.02 points. The Greens have gone from gaining 0.29 points to 0.67 points. One seat’s “worth of votes” is roughly 0.83 per cent, a bit less if you allow for wasted votes.

If I were in the National Party, I’d be concerned about this trend. As it stands, National is generally expected to lose a seat to the Greens on specials. But the Greens are getting increasingly good at this, and are picking up the seat even when the numbers suggest the increase won’t be enough.

For people who like numbers, here’s the spreadsheet I used for these calculations: Special vote impact projection 2014. It’s an extended version of the projection spreadsheet I posted earlier.

*Although there are only three data points, they are reliable since they are true by definition, not a sample. (Turnout is interesting for other reasons, but it’s the final result that matters here.) I’d be more worried about short-term circumstances giving the illusion of a long-term trend. The value of adding anything before 2005 might be questionable though, since the situation a decade ago might lose relevance to today.


The minimum swing needed in the special votes for the Greens to steal that seat

A 4.6-point swing in specials relative to preliminary, about 0.6 points more than my projection, would get the Greens a 14th seat at National’s expense. But even less might be sufficient.

I think a projection, which I posted yesterday, is more useful information that the “minimum required swing” calculations that I did for the 2011 election. But if anyone is interested in knowing exactly what the Greens need to clear the bar, here is that spreadsheet I did in 2011, updated with 2014 data: Required changes in special votes to steal seats, 2014 election.

I won’t go through all the various possibilities. If you’re curious, feel free to do that yourself using the spreadsheet. The situation that is most interesting, because (other than no change) it’s most likely, is where the Greens would pick up a 14th seat in exchange for National’s 61st (and absolute majority).

The Greens would need to swing +4.60 points in the special votes alone (not total votes), relative to the preliminary count, to take a seat. I have them projected to swing +4.05 points, so this isn’t unrealistic.

Here’s the catch: In the preliminary results, Labour has the 120th quotient and National the 119th. This means that Labour would lose a seat before National. So they need to gain a little to make sure it’s National, not them, who loses the seat. This isn’t hard: they’re 561 votes away (relative to an assumption that specials are distributed identically to preliminary), or +0.19 points. My projection has them well ahead of this.

So the “minimum change required” situation has both Labour and the Greens taking from National. You’ll notice in the table below that the Greens don’t actually need National to lose as much as it did in my projection: -4.79 points, not as much as my projected loss of -5.58 points.

In terms of absolute votes, this is a swing of 1,648 relative to my projection. I said in my last post that 1,129 votes more would suffice. The assumptions behind these figures are different. The projection margin (1,129) assumes that the Greens only gain votes, and no-one loses any, i.e. it’s likely to be an overestimate (not by double though—the equivalent National loss is 5,058). The “minimum required” swing (1,648 relative to projection) assumes that all other parties perform in the specials identically to the preliminary result. Historically (and hence in my projection) most left-wing parties do better in the specials at National’s expense, and these help the Greens too. So this is also likely to be an overestimate, probably more so.

So really, the most important hope for the Greens to hang on to is that they will perform about 0.6 points, or maybe (depending on what else happens) even just 0.35 points, better in the special votes than the 2011 swings might imply.* As I said in my last post, it’s certainly possible, but it’ll be very close. If I were Steffan Browning or Maureen Pugh, I’d have a very nervous two weeks ahead.

Party Preliminary Projection Special required Change on prelim Change on projection Total required Change on prelim
National 48.06% 42.48% < 43.26% -4.79% +0.79% < 47.47% -0.59%
Labour 24.69% 28.10% > 24.88% +0.19% -3.22% > 24.71% +0.02%
Green 10.02% 14.07% > 14.63% +4.60% +0.56% > 10.59% +0.57%

* My projection applies the 2011 preliminary-to-special swings multiplicatively, not additively, to the 2014 preliminary result. A full method description is in the post describing the projection.

Projection of special votes for the 2014 election

On my projection for the 2014 special votes, based on the 2011 impact, the Greens will miss out on a 14th seat by a whisker and National will retain its outright majority. Maybe.

I crunched some numbers to project (I didn’t say “predict”) the impact of special votes. I suspect most of you will just want to know the answer, so I’ll cut to the chase first, then give a bit of analysis, then give a bit more details, and I’ll talk about my method fourth.

Special votes include, among other things, overseas votes and votes cast for a different electorate to the polling place location. They aren’t counted on election night; they’re just set aside for the full count released two weeks later. And they’re not normally representative of the vote as a whole. Historically, special votes have favoured the Greens significantly—they have often picked up an extra seat from it, as they did in 2011.

The most fundamental assumption I make is that you can use the 2011 impact of the special votes as a guide to the 2014 impact. Some other minor assumptions will become apparent in the method description at the end.

Basically, on my projection, the results would stay the same. The Greens will get closer to a 14th seat, but because on the preliminary results they only just got their 13th one, special votes won’t propel them far enough for a 14th. However, they will be tantalisingly close, moving their 14th seat to the 121st quotient.

Party Preliminary results Projected final results Gain/loss
Votes % Seats Vote % Seats
National Party 1,010,464 48.06% 61 1,136,155 47.37% 61 -0.69%
Labour Party 519,146 24.69% 32 602,304 25.11% 32 +0.42%
Green Party 210,764 10.02% 13 252,394 10.52% 13 +0.50%
New Zealand First Party 186,031 8.85% 11 204,919 8.54% 11 -0.30%
Māori Party 27,074 1.29% 2 33,134 1.38% 2 +0.09%
ACT New Zealand 14,510 0.69% 1 16,685 0.70% 1 +0.01%
United Future 4,533 0.22% 1 5,098 0.21% 1 -0.00%
Conservative 86,616 4.12% 0 94,357 3.93% 0 -0.19%
Internet MANA 26,539 1.26% 0 32,826 1.37% 0 +0.11%
Aotearoa Legalise Cannabis Party 8,539 0.41% 0 10,894 0.45% 0 +0.05%
Ban1080 4,368 0.21% 0 4,992 0.21% 0 +0.00%
Democrats for Social Credit 1,609 0.08% 0 1,983 0.08% 0 +0.01%
The Civilian Party 906 0.04% 0 1,035 0.04% 0 +0.00%
NZ Independent Coalition 895 0.04% 0 1,023 0.04% 0 +0.00%
Focus New Zealand 677 0.03% 0 774 0.03% 0 +0.00%

I project the Green gain to be 0.50%, and the National loss to be 0.69%. In a lot of cases, this can be enough to win and lose a seat, respectively: one seat is roughly 0.8% of the vote (0.83% if you ignore “wasted” votes), so it’s easy to imagine that another 0.5% might push you over.

But in this election, it wouldn’t be enough. The reason is that, in the preliminary results, the Greens only just made their 13th seat: it was the 118th quotient, i.e., the 118th seat to be allocated. National, on the other hand, has some room to slack before losing a seat—in fact, it would have picked up the 121st quotient, if there was one. In effect, the Greens would need to pick up to nearly a “whole seat” worth of votes to pick up seat number 14.

In my projection, the Greens nearly get there, but not quite. They move their 14th seat from the 127th quotient to the 121st. So if there was one more seat in Parliament, it would be theirs. And they’re very close: with 1,129 votes more (all other vote counts staying the same), they would steal the 120th quotient from National. Conversely, if National had had 5,058 votes less (all other counts staying the same), they would give up the 120th quotient to the Greens.

What does this mean?
In practice, what this tell us is not necessarily that Steffan Browning won’t make back in at Maureen Pugh’s expense. It’s that he might—but it’ll be very close. Certainly, the Greens shouldn’t be expecting another seat from specials, like they could in 2011.

There are, however, reasons to believe the wind might blow in the Greens’ favour. Firstly, advance votes were way up on previous elections. This was partly due to a concerted effort from parties to promote advance voting this election, and (I think) more so from the left than the right. Now, ordinary advance votes are counted on election night. But special advance votes—which include votes cast in advance outside the voter’s electorate—are not. And, as @annagrammatiste pointed out to me on Twitter, a lot of those special advance votes will have been cast at universities, some of which had advance voting booths on campus this year. University students, on average, lean left.

Secondly, estimated overseas votes doubled in this election, from 19,500 in 2011 to 38,500 in 2014. Overseas voters are known for being particularly Green-heavy.

Without those reasons, I would have said that it’s more likely that the seat allocations will stay put, but not enough to put money on it. But these weaken that likelihood. My instinct is that it probably won’t be enough, but objectively, I’m not really sure. It’ll be super close.

That’s basically the gist of this post. If you like voting systems, read on.


Some more detail
To dive in a little deeper, here’s a quick primer on how the Sainte-Laguë method works. This is the method used in New Zealand to proportionally allocate seats. The easiest way to think of it (in my opinion) is that you allocate the seats one by one, to the party with the highest “quotient” at the time. Every party’s initial quotient is their total number of votes, so the first seat effectively goes to the party with the most votes. Then, every time you allocate a seat, you divide that party’s total votes by their next divisor to get their new quotient (leaving the rest untouched). The first divisor for each party is 1, then it goes 3, 5, 7, and so on. You repeat till you’ve allocated all 120 seats.

How are quotients relevant? Well, here are the quotients near 120 for the preliminary results:

Quotient National Labour Greens NZ First Māori ACT UF
118 8350.9 8240.4 8430.6 8088.3 5414.8 4836.7 4533.0
119 8350.9 8240.4 7806.1 8088.3 5414.8 4836.7 4533.0
120 8215.2 8240.4 7806.1 8088.3 5414.8 4836.7 4533.0
121 8215.2 7986.9 7806.1 8088.3 5414.8 4836.7 4533.0
122 8083.7 7986.9 7806.1 8088.3 5414.8 4836.7 4533.0
123 8083.7 7986.9 7806.1 7441.2 5414.8 4836.7 4533.0

As I said, the Greens got the 118th quotient, and won’t pick up another one until 127. National’s getting quotients more often because it has more votes, and the gap between dividing by 121 and 123 is “smaller” than between 25 and 27 (Greens), so to speak.

Here is the same for my projected results:

Quotient National Labour Greens NZ First Māori ACT UF
118 9547.5 9560.4 9347.9 8909.5 6626.7 5561.7 5098.4
119 9547.5 9266.2 9347.9 8909.5 6626.7 5561.7 5098.4
120 9389.7 9266.2 9347.9 8909.5 6626.7 5561.7 5098.4
121 9237.0 9266.2 9347.9 8909.5 6626.7 5561.7 5098.4
122 9237.0 9266.2 8703.2 8909.5 6626.7 5561.7 5098.4
123 9237.0 8989.6 8703.2 8909.5 6626.7 5561.7 5098.4

The Green’s 14th quotient is just 41.8 away from National’s 61st. So we find a rudimentary “margin” for the Greens by multiplying this difference by the 14th divisor: 41.8 × 27 = 1,129. For National, we use the 61st divisor: 41.8 × 121 = 5,058.

Okay, now for the exciting part. (Heh.) There are lots of ways to do this projection; Graeme Edgeler has one that basically gives the same outcome. This is how mine works.

I took the preliminary results for 2011 and subtracted them from the final results to get the “special vote addition”. I use quote marks because it’s not actually all special votes: it also includes votes cast at polling places with fewer than 6 votes (these aren’t counted on election night) and any corrections. But anyway, I compare the preliminary percentages to the “special vote addition” percentages, by division, to get a “multiplier” for each party. This multiplier represents a relationship between the preliminary votes and the special votes for each party.

I apply this multiplier to the preliminary vote percentages for each party in 2014. If a party didn’t contest the 2011 election, I just use 1 (i.e., no adjustment). Now, after doing this, the percentages won’t add up to 100, so I scale them so that they do.

The next part is the complication. The preliminary total vote count includes informals (ballots where you can’t tell who they voted for); obviously the sum of parties’ votes don’t. And the preliminary special vote estimate (I take the figure that includes overseas votes and fewer-than-6 places) includes ballots that might later be ruled invalid, because the statutory declaration wasn’t completed correctly or something like that. So I use 2011 ratios of preliminary to final counts to project how many valid special votes there will be in 2014. It doesn’t end up making much of a difference (0.4%), but hey, I wouldn’t know unless I tried.

The last step is to use the projected special vote percentages and the projected valid special vote count, to project the “special vote addition” for each party, add those to the preliminary count and that’s the projected result.

If you get excited by numbers like I do, here’s the spreadsheet I used to figure this out: Special vote impact projection 2014. The actual Sainte-Laguë stuff is in a different spreadsheet, but I’ve pasted the borderline quotients into that spreadsheet.

A quick note on overhang in Lees-Galloway’s bill

The MP for Palmerston North’s bill is laudable in intent, but really needs to have the overhang thing sussed out.

Iain Lees-Galloway had his bill drawn from the ballot today. The bill seeks to implement the recommendations of the Electoral Commission’s MMP review, which the National-led government discarded, citing a “lack of political consensus”. I didn’t write about it at the time, but as you might have guessed, I thought the Commission’s recommendations were excellent and was outraged when the government gave an excuse that was almost certainly caused by itself. (There’s also all the hours I spent writing my submission and follow-up submission, which now just seem like a waste of time.)

Mr Lees-Galloway’s Electoral (Adjustment of Thresholds) Amendment Bill is pretty short, and pretty clear. Lower the threshold to 4%, and do away with the electorate seat threshold (popularly known as the “coat-tail” rule).

The problem that, if you just do that, you open up potential for a lot of overhang seats. Every party that gets below 4% wouldn’t get any list seats, which is great*, but if they won any electoral seats, they still get to keep them. Under current rules, these are overhang seats. If applied to the 2011 election results, that would be a whopping six overhangs, increasing Parliament’s size to 126. Because the sub-threshold parties no longer have a party allocation to fill, every electorate they win is an overhang seat.

Assuming you think this is a problem, there are a number of ways you could fix this. I won’t analyse them all (I did in my submission), but in my opinion the second-best way—and the way the Commission proposed—is to abolish overhang, full stop. So for every sub-threshold party (and party that would otherwise get overhang seats), you set aside their seats, then forget about them and allocate the remaining seats proportionally.

Of course, Mr Lees-Galloway might have decided that he didn’t want to do this. But given that he wanted to implement the Electoral Commission recommendations, I’m guessing this should be a part of it too.

* Okay, not so great. I actually support abolishing the threshold, but that’s another matter.

The real problem with STV: the Australian Senate projected results

The Australian Senate voting system worked exactly as it’s meant to. It’s not broken, it’s just bad to begin with.

In a sense, I’m glad at least some Australians are hearing the wake-up call. I’m glad that some are calling for reform of the system that might see senators elected to one of six vacancies with as little as 0.51% or 0.22% of the vote. What I hope now is that they realise that it’s not tweaks that the system needs, but replacement.

What happened? The conventional wisdom is that minor parties got together and exchanged preference deals, in a manner largely opaque to the Australian public. This is true, but it isn’t contrary to the system. The whole point of STV is that “wasted votes” instead trickle down to the next most preferred candidate. The idea is to prevent supporters of minor candidates from abandoning them outright, by ensuring that their vote will still count towards someone they semi-like.

So when 6.45% of Victorians voted for parties that said they’d rather someone from the Australian Motoring Enthusiasts Party (AMEP) than another candidate from Labor, Liberals, Nationals, Greens, Palmer United or the Sex Party, they got exactly what they asked for. And when 3.54% voted for parties that preferred the Sex Party over all those, but failing that, then the AMEP, they got that too. They voted against the major parties; they voted that they’d prefer the minor ones. And when they eventually added up to 14.3%, they got their quota.

Now, you might point out, correctly, that those voters probably didn’t know that’s what they’re voting for. But that’s the point of above-the-line voting: you trust that the party you vote for submitted a group ticket that is what you would have wanted. This is reasonable. After all, you’re probably voting for that party because you believe it aligns most closely with you. While I’m sure that minor parties did strategically exchange preference deals, the outcome can be explained more much simply: minor parties collectively want to seek to limit the capacity of major parties to ride over their interests.

If Victoria and Western Australia didn’t want any micro-parties to gain seats, they would have put all those parties much further down their preference list. It’s worth noting that Labor, the Coalition and the Greens are arguably just as guilty. Labor and the Greens each preferenced most micro-parties above the Coalition, and vice versa. So their excess votes, too, helped the micro-parties distort the final outcome.

The flipside
Obviously, it’s impossible to expect Australian voters to vote how they “should have voted” to prevent this outcome. That would essentially require almost all of them to vote below the line; when there are up to 110 candidates (as in New South Wales), that’s burdensome to say the least.

One way to side-step the problem is to abolish above-the-line voting, but not require voters to rank all (or at least 90% of) candidates. But then you would lose a key benefit of above-the-line voting, the ability to vote “for a party”.

And anyway, the real problem is more fundamental. Australia introduced its current voting system, the single transferable vote (STV), in 1948 when it decided it wanted its upper house to have proportional representation. The root problem, then, is straightforward: STV is not proportional representation. It is not proportional because it is not designed to be proportional. It is designed to minimise vote wastage, which is not quite the same thing, and which this year’s Senate elections achieved perfectly fine.

If you beg to differ, I challenge you to look at the projected results for Victoria and Western Australia and tell me why that is a proportional outcome. (Or read my earlier post on the topic.)

Ideas for reform
If Australia wants a transparent voting system for its Senate that produces a proportional outcome, the answer is simple: adopt a proportional system. Since their lower house is electorate-based, there is no need for a mixed system, as is the case in New Zealand. Instead, they could run a party-list proportional system with state-by-state contests. Even better, to improve overall fidelity to proportionality, they could look to Sweden: each multi-member constituency has its own proportional contest, with extra national “adjustment seats” designed to ensure that the national outcome matches the national vote as closely as possible.

I don’t have any hope that this option will get close to the table. Despite all the appeal of proportional representation, most nations find a true implementation too hard a bullet to bite. But at the very least, Australians should realise that the projected results of this year’s Senate elections are not just symptoms of flaws in an otherwise sound system. They are a show of a bad system working well.

Can’t escape the “hard-right” tag

No-one ever believes their own views are extreme.  It’s always “common sense”.  Sir Roger Douglas thinks his recently released agenda is “common sense”—not “hard right”.  But you know, I’m sure the Greens think they have “common sense” too.

The point here isn’t to question whether or not Sir Roger’s plans have sound theoretical basis.  It is the nature of economics, as it is with all the social sciences, that questions cannot be definitively answered.  Most economists, though, would accept that economic opinions can, for the most part at least, be modelled on a spectrum, from state control on the left to the free market on the right.  The thing is, everyone sits somewhere on the spectrum further left than him.  He must have realised that no-one is advocating more of a free market than he is.

This doesn’t make it “wrong”, but one must realise that at the heart of his agenda is an ideology.  That is what the far ends of the spectrums are: ideologies.  His policies are well-reasoned, just like every other policy (except perhaps John Key’s) is well-reasoned—communist ideologies being no exception.  Whether they stand up to practice is more difficult to answer, but the heart of his policies is a firm belief that a more efficient economy benefits everyone, and no less for the poor than the rich.  It is this firm belief that characterises those far-right on the economic spectrum.

But when were no-condition, no-catch universal benefits like that ever true?  The unfortunate reality is that there always is a trade-off, some winning and some losing.  Better always means worse for some.  It is this understanding that separates those towards the centre from those on the sides.  Sir Roger is effectively advocating that the free market can work for everyone.  In return for low taxes, he wants people to cover themselves for everything.  As much as he seeks to deny it, that by definition is hard right.

The heavy irony rests in the fact that while Act has realised the opportunity arising from a left-moving National, seizing on the moment to separate its policies from theirs, Act can only realistically seek a place in a National-led government.  Meanwhile, National is doing is very best to attract centrist voters.  While it might be true that a vote for Act is a vote for National, this could cause a backlash when centrist voters realise that it works in reverse too: that a vote for National is a vote for Act.

Centrists tend not to like ideological visions, preferring realistic policies instead.  Wary of pure market policies like Sir Roger’s, voters may think twice about gifting their vote to National.  That the policies they get may not be the policies they vote for, because of Act.  It creates opportunities for a fear-driven Labour campaign, not unlike the “Gone by Lunchtime” campaign in 2005, with but a subtle difference in target.

While polls currently position National to govern alone, this never happens come election time, not in an MMP system.  National, having gained lots of swing voters from Labour, is now in the awkward position of having to decide whether it will appease its centrist support base, or be prepared to make concessions to Act after the election.  Key says now that he won’t be “held hostage to a radical right-wing agenda”, but what if his ability to form a government depends on it?

Election bribery to be expected

It is the classic left-right divide.  The left, by definition, favours more government services; the right, lower taxes.  Any individual with common sense knows that, in general, there is an inverse relationship between the two.  Finance Minister Dr Michael Cullen’s recent tax cut announcements will inevitably, then, be subject to sceptism and—if NZ Herald reader views are anything to go by—will probably be assumed to be nothing more than an election year bribe.

The jump to the conclusion, though, is astounding.  Many seem to “know” that National is bound to deliver tax cuts and Labour will most certainly not.  With both parties driving toward the centre, though, it is difficult to apply the left-right stereotype.  Conditions may have changed in the past three or six years, so that cuts are warranted now when they weren’t then.  The tight fiscal policy effectively required by the Public Finance Act may have achieved its purpose, or alternative funding options may be more appropriate for Labour’s next projects.  National has yet to announce anything substantial about its tax cuts policy, other than “we’ll do it”, but a similar restraint from assumption must be exercised.

Cullen’s recent announcement must have been broadly predictable.  It would have been political suicide not to at least hint at tax cuts.  In the same way, it will be political suicide if National overdoes theirs, cutting government services as a result.  Both parties will have to persuade centrist voters that they have the right balance in mind.

To be fair, Labour’s “four tests” for tax cuts do seem a tall ask.  Individually, they might not seem unreasonable, except perhaps to the strongly right-aligned: a refusal to borrow, to cut services, to increase inflation or to reduce social equality.  Combined, though, they form an insurmountable barrier.  National’s suspicion that they will serve as “excuses to deny tax cuts” seems fair.

Although fiscal operating surpluses might make the services criterion an easy task, high consumption spending and the consequential high inflation and interest rates make the inflation test alone an almost certain escape route.  Reserve Bank Governor Dr Alan Bollard has already hinted that tax cuts are likely to keep interest rates high.  Whereas Labour has effectively said it just won’t do it, National will have to show how its cuts won’t make inflation worse than it already is.

The promise of tax cuts at this time is basic politics.  The reality is that citizens are greedy, and many simply don’t understand the link between taxes, government services and inflation, let alone the inflationary effect of their consumption spending habits.  These are the people both parties are trying to attract, so Labour has jumped the gun on National in order to nullify the advantage National has often had of being first to make the big speech.  Election bribery, people say.  Labour’s promise (including the excuses) might or might not be genuine—but what else did you expect?

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