National's agreement with Act fuels secret agenda claim

Some elements on the left of the political spectrum have long cried wolf about National supposedly having a secret agenda, especially when it comes to privatisation.

It might look like National has finally provided evidence to justify all the bleating in the form of the confidence and supply agreement it has hammered out with Act New Zealand.

But looks can deceive. The contents of the eight-page document might suggest National has lurched to the right. But those contents were more likely shaped by other factors such as Act's surprising degree of negotiating leverage, National's willingness to continue its confrontational approach to what it sees as vested interests blocking reform in the compulsory education sector, or, simply because National had already been planning to do what Act wanted.

If nothing else, the agreement is providing rich pickings for conspiracy theorists, especially the Act-driven intention to trial so-called "charter schools".

These institutions' initial mission will be the lifting of educational achievement in poor areas of south Auckland and Christchurch.

A series of school charters will be allocated to those areas, with the private sector, iwi and community groups competing with "existing providers" (presumably the Ministry of Education) for the public funds which come with those charters not to run just new schools, but existing ones as well.

The creation of these "independent state-funded schools" has been given the same kind of welcome by the education establishment as Dracula got on visiting the blood bank.

The teacher unions are highly suspicious of John Key's dismissive statement "that's MMP for you, isn't it" when he was questioned as to why National had agreed to something it had never campaigned on.

The unions have valid reason to be suspicious. Go to YouTube and you can watch a 10-minute clip of a senior official from Britain's Department of Education extolling the virtues of "free schools" - that country's equivalent of charter schools - at a conference back in February.

That bureaucrat no longer works for the Department of Education. Lesley Longstone took up a new position in New Zealand last month. She is nothing less than the new chief executive of the Ministry of Education.

The education sector will take some convincing that the hiring of someone who is clearly a big fan of charter schools was mere coincidence.

Ms Longstone' s talk on the video about free schools operating in an environment of "freedom" and "flexibility" will be interpreted by the teacher unions as an attack on their pay and conditions.

Tacking to the right normally runs counter to Mr Key's instinctive inclination to hug the centre. The exception is education where - because of his own background - he is determined to boost opportunity for the poor and disadvantaged.

There have been similarly loud howls of outrage at other contents of Act's support agreement. These items include the imposition of a fiscal cap on government spending, the introduction of private competition in ACC's work account plus implementation of some of the privatisation-related recommendations of the Paula Rebstock-chaired welfare working group.

That Act was able to negotiate these gains has raised the question of whether that party is being used by National as cover to run a more radical agenda than it did in its first term.

United Future's agreement with National is far more limited in terms of concessions from National even though Peter Dunne is in the exact same position as Act's John Banks in being his party's sole MP.

It is something of a misnomer that being lone MPs weakened their negotiating power. With National expected to lose one MP as a result of how special votes fall, both Mr Banks' and Mr Dunne's votes will be vital in giving National a majority in the new Parliament.

The contrast in their respective policy gains despite equal negotiating power is in part explained by Mr Dunne's self-proclaimed role as a brake on National. His agreement consequently includes items which stop National doing things, such as a rather pointless provision to write into law National's assurances that it will not sell more than 49% of a state-owned enterprise.

Act is more interested in pushing National to do things that National might not necessarily want to do.

Act has made significant gains which are very much in line with its ideology.

Mr Dunne has secured a more minimal and eclectic grab-bag of unrelated items which have much do with United Future's rather eccentric priorities.

One of the notable features of Mr Dunne's agreement with National is the absence of an assurance from Mr Key that National will pass his legislation enabling couples to split their incomes and pay less tax.

Was Act simply a better haggler than Mr Dunne?

Mr Dunne's lack of progress on income-splitting has to be seen in the light of the measure costing up to $500 million - money the Government simply does not have in the current fiscal climate.

In contrast, Act's gains were relatively cost-free. They also included items which National could comfortably live with, such as a fiscal cap.

Opponents of that idea cite the case of Colorado, which got so squeezed for cash because of its fiscal cap it had to curtail immunisation programmes for children.

The American versions of fiscal caps, however, have been burdened by restrictions on revenue raising and requirements that any departure from spending plans be subject to approval by referendum.

Act wanted likewise here. But National refused. Any breach of the fiscal cap will require a "please explain" from the Minister of Finance to Parliament. That might be embarrassing, but nothing more.

Critics also argue that such caps prevent governments running expansionary fiscal policies in times of recession.

However, a government could simply choose to breach its cap at such times - and probably with little comeback from opponents.

In assessing Act's and United Future's gains, two other factors must be remembered. A minor party's negotiating power is strongest when it has yet to sign a support agreement.

After that, its influence can wane considerably. And having now signed up for the next three years, both minor parties are obliged by the terms of the agreement to support legislation connected with National's far more extensive post-election "action plan".

The good news for Act is that the radical nature of its agreement will keep the party in the spotlight. The same cannot be said for United Future.

 - John Armstrong is the The New Zealand Herald political correspondent.


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