Is the election race closer than assumed wisdom suggest? Those who say nothing's changed in the past few months are missing the political pachyderm staring them in the face

Last week I began the argument that the November election will be closer than most seem to assume, and that Phil Goff’s Labour Party just might lead the next government.

As if by magic, the Herald published its irregular “Digipoll” which showed a significant narrowing of the gap between the two big parties.

This may not enough to put Labour seriously in the hunt right now, but it’s a straw in the wind which may bring the election within a campaignable distance for Phil Goff.

On Jim Mora’s excellent “Panel” segment on National Radio, Research New Zealand principal, Emmanuel Kalafatelis, expressed doubt about the findings of the poll on the grounds that he couldn’t think of anything that had happened during the poll’s capture period to close the gap.

Kalafatelis boasts a vast depth of expertise in political research having begun his career in the seminal Heylen organisation many moons ago, but I wonder if he isn’t missing something obvious.

The worn out metaphor of an elephant in the room is handy here.

The political pachyderm may well be National’s rediscovered enthusiasm for privatisation of state assets.

I had the luck to be a founding director of a market research company in the eighties and I can say with authority that even at the height of the privatisation orgy which marked that decade, the punters hated the word, the process and the results.

Not much has changed judging by current research, and over the ditch we have witnessed a long established Labor Government in New South Wales unravel badly, partly as a result of a similar electricity asset privatisation proposal, and crash to NSW Labor’s worst ever defeat.

Most interesting about the train of events in New South Wales is that the policy became more unpopular as time went on.

The effects of a privatisation agenda were not just immediately negative for the governing party; they were also corrosive over time.

In Queensland the same drama seems to be playing out and Anna Bligh’s Labor administration appears headed for the same fate driven by the same enthusiasm for privatisation.

Watch this space.

If Labour now has an issue, can its organisation best National in what, for whatever reason, is shaping up to be another close election?

Political party organisations are more important with MMP than they ever were under FPP. More next week.

Comments (8)

by Ben Curran on July 05, 2011
Ben Curran

Labour might have an issue they can use. Whether they can competently use it without it perversely blowing up in their own faces - another matter entirely, one that on their recent track record I don't hold out much hope for. It's not as if they don't already have several other issues they could be pushing but aren't - river water quality/100% stuff, Auckland public transport, failures in Christchurch, coal mining vs carbon targets ......

My impression of Labour these days would involve them beginning to talk about privatization for a week or so and then get bogged down in a pointless discussion about whether John Key knew about decoration X in building Y and how much it cost. About the only people I expect will actually try and make a fuss about privatization and actually get any traction would be the greens.

by Matthew Percival on July 05, 2011
Matthew Percival

"Privatisation" is not going to win or lose the election. The effect of the privatisation on the polls has already been taken into account and Labour still has a long way to go.

As a side note I don't see how it's privatisation when the government still owns the majority of shares but I'm sure someone will explain that to me.

I'm also greatly intrigued of the importance you place on one Herald Digipoll in your analysis. You might want to check out the Poll of Polls on this site and the thinking behind it.

I do admire your attempt to make a race out of this election but its hard to see it happening on the evidence we have before us now.

 

by Frank Macskasy on July 06, 2011
Frank Macskasy
Matthew Percival (July 05, 2011)

"...As a side note I don't see how it's privatisation when the government still owns the majority of shares but I'm sure someone will explain that to me."

 

Mathew, it may be partial-privatisation, but the issues here are;

 

1.  Past experience has demonstrated that when faced with unpopular policies, governments start of small, and build up to their actual target, bit by bit. Case in point:

* Gst; started off at 10%, then 12.5%, and now 15%.

* Prescription medicines; once free. Then $1 per item. Then slowly ratcheted up, until many pay full price unless you have a community services card, and/or it is subsidised by Pharmac.

* Wellington City Council sold 49% of Capital Power in 1994. They sold the remainder in the following year.

 

2. Even a 49% ownership by overseas investors will mean half of SOEs profits being remitted offshore. That will make our balance of payments worse, as capital flows offshore.

 

3. With half of profits going to private owners, that reduces government income and pushes their books further into the red. That means either we (a) borrow more to sustain our social services, (b) raise taxes to sustain our social services, or (c) cut our social services. Unless you're an ACT supporter or otherwise a Believer in Less Government, I would assume that  a reduction in our social services would not be welcomed.

 

Polls have consistantly shown that New Zealanders oppose asset sales - up to around 62%, in fact. So I'm not sure where you get your idea that "the effect of the privatisation on the polls has already been taken into account" - that seems quite bizarre.

 

Voters have to get their heads around one thing; if they oppose asset sales then voting for National is going to save those state assets. They cannot have both.

 

That will be the simple choice they have on November 26.

by Frank Macskasy on July 06, 2011
Frank Macskasy

Sorry,

 

"Voters have to get their heads around one thing; if they oppose asset sales then voting for National is going to save those state assets."

 

Should actually read,

 

"Voters have to get their heads around one thing; if they oppose asset sales then voting for National is not going to save those state assets."

 

 

by william blake on July 06, 2011
william blake

The logical extension of the sale of state owned assets, is to put the job of government out to competitive tender.

Elections are unnecessarily expensive and disrupt the flow of managing the country. The transition from Prime Minister to C.E.O. would be seamless for someone as skilled as John Key.

With the Governments minds firmly fixed on productivity and profit; calmly cutting away the sentimental ideas of 'democracy' who knows where this great country could end up.

by Frank Macskasy on July 07, 2011
Frank Macskasy

"With the Governments minds firmly fixed on productivity and profit; calmly cutting away the sentimental ideas of 'democracy' who knows where this great country could end up." - William Blake

 

Mostly empty, I suspect.

by Matthew Percival on July 10, 2011
Matthew Percival

Perhaps governments take that approach so they can assess what mandate they have in terms of how far they push the policy?

For what it's worth I don't comprehend why the government has to own more than one company in any industry and why the government has to own any more than a controlling interest. The only advantage of holding 100% is getting the extra dividends.

Your assumption that this means 49% foreign ownership is creative. New Zealanders will want a share of the action. In any case foreign ownership brings an influx of funds which can be re-invested in New Zealand. In this instance we have already taken the benefits of the influx of funds and thats why our unemployment is comparatively low with the rest of the world and why our country is in good health.

And it also does not mean that 49% of profits head offshore. Capital Expenditure and with expansion working capital requirements will see a certain % of profits used up before money is made available to shareholders.

Voters already know about Nationals privitisation plans and have already had their chance to reflect this in various polls. The fact that National is still polling above 50% might be enough to tell you that this issue isn't going to decide the election.

As for William Blake's rabble - I almost fell off my chair with laughter! Where will NZ end up? We will be just fine.

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