Democracy Briefing: The Act Party’s highly influential year

The Act Party ends the year on 9.6% in an average of the last public polls, a moderate gain on its 2023 election result of 8.64% but still a strong result considering the poor track record of minor parties in MMP, and a testimony to the high profile enjoyed by its leader David Seymour and his Treaty Principles Bill.

Opening Act

Seymour is the most radical minister in the coalition. He might even be the most radical MP in Parliament. His Treaty bill is the most obvious example of this: it attempts to overthrow over forty years of treaty jurisprudence and define the principles of the Treaty of Waitangi as a classical liberal text.

No other party will support this bill through its second reading. It will not pass, but Seymour has several additional projects on his agenda that will undoubtedly pass or have done so already. They’ve received far less scrutiny but could have a significant impact beyond the current government's term. His proposal for a referendum could even be compared to the 4th Labour Government’s campaign against nuclear ships as a helpful distraction from its other reforms.

Seymour is the Associate Minister for Education. This year, he reduced the cost of school lunches to taxpayers, prevented schools from holding teacher-only days during term time, and announced plans to fine parents of children repeatedly absent from school without cause.

Act’s Charter Schools

Seymour’s main policy in this portfolio is the establishment of charter schools: privately operated but publicly-funded schools able to hire teachers who aren’t registered with the teaching council and to teach outside the standard curriculum set by the Ministry of Education. In the 2024 Budget, he secured $153 million to establish 15 new charter schools and convert 35 existing schools to the charter model.

Teaching unions hate charter schools. They see them as a threat to organised labour's collective bargaining power under the current public sector system. Seymour established a handful of charters under the Key government, and Labour leader Chris Hipkins brought them into the public system when he became Minister of Education.

Hipkins has pledged to abolish Seymour’s charters when Labour returns to power again, so Seymour is attempting to scale up the number of charters to make it harder for Labour to close down. One of the most intriguing powers granted under his new legislation is the ability for the Minister of Education to compel failing state schools to convert to charters. The UK adopted a similar approach under the Conservative Government, and a huge proportion of their state schools were pushed over to the charter model.

Act brings back deregulation

Seymour is also the first Minister for Regulation, a Cabinet position he created when the Government was formed. He describes it as the “red tape and regulation police” and funded it by shutting down the Productivity Commission – although it is significantly larger than the Commission. Post reporter Andrea Vance has revealed that salaries at the Ministry for Regulation are considerably higher than those across the public service.

Seymour’s new ministry is a core agency. It sits alongside the Department of Prime Minister and Cabinet, the Public Service Commission and Treasury (as well as National’s new Social Investment Agency), coordinating and managing operations across the entire public sector. The Act leader believes it will reduce the regulatory burden across industry sectors, thus growing the economy. The agency has undertaken reviews of hairdressing, early childhood education and agricultural products, attempting to rationalise and modernise their regulatory frameworks.

New Zealand does not have a happy history of deregulation. The deregulation of the finance industry led to billion-dollar losses for depositors and taxpayers after the global financial crisis. The deregulation of mine safety in the 1990s helped bring about the Pike River mine disaster. The deregulation of the building industry led to the leaky homes crisis. Deregulation of forestry and land use laws led to high fatality rates in the forestry industry, and slash that causes immense property damage during extreme weather events.

The great risk of Seymour’s new ministry is that it becomes a one-stop-shop for lobbyists, and that they’re able to use its power as a central agency to leverage their own interests across all-of-government, instead of capturing individual ministers and agencies. The Ministry of Regulation could become his most enduring policy change.

Seymour holds another associate portfolio: he’s responsible for Pharmac, the state drug-buying agency. He made pseudoephedrine available as a pharmacy-only medicine and created controversy when he directed Pharmac to stop basing its decisions on the Treaty of Waitangi.

Finally, Seymour holds the Associate Finance portfolio and was able to secure the restoration of interest deductibility for landlords, a tax change introduced by Labour in 2021. The full cost of the policy is estimated at $2.9 billion over a four-year period, and this amount has haunted National all year, as they made cuts to public spending, healthcare and Dunedin hospital, the opposition repeatedly confronted them with the high cost of Act’s interest deductibility policy. Christopher Luxon argued that this change would increase downward pressure on rents, but rental costs have continued to increase this year.

Supporting Acts

Seymour’s deputy is Brooke van Velden, a former lobbyist for Exceltium, Matthew Hooton’s old Auckland-based government relations firm. She became a parliamentary staffer for David Seymour and was pivotal in influencing MPs to pass Seymour’s End of Life referendum legislation. She’s been an MP since 2020. Seymour describes her as “the future of the party”.

Van Velden is the Minister for Internal Affairs. She’s currently overhauling the Holidays Act and health and safety regulations, which will likely favour employers over workers. She has been critical of the Labour Government's increases to the minimum wage, its establishment of Matariki as a public holiday, and its extension of sick leave. Lobby group Business NZ has welcomed changes to these policy settings.

The third MP on the Act list is Nicole McKee, a former lobbyist for the Council of Licensed Firearms Owners. McKee was a vocal critic of Labour’s gun law reforms, introduced in the wake of the Christchurch mosque shooting. McKee is now Associate Minister for Justice responsible for firearms, and she’s undertaken an overhaul of New Zealand’s firearms safety and training laws and the regulation around shooting clubs and ranges.

This year, she came under intense criticism from the Police Association for her failure to consult police on an issue that directly impacts officer safety. The president of the Association called for her to resign. McKee is also reintroducing Three Strikes legislation to impose maximum sentences on repeat violent offenders.

David Seymour’s parliamentary private secretary for Pharmac is former pharmaceutical company lobbyist Todd Stephenson, fourth on Act’s list. In May of this year, he sold off his shares in several pharmaceutical companies, after Labour Deputy leader Carmel Sepuloni pointed out this constituted a conflict of interest.

Fifth on the Act list is Andrew Hoggard, also a former lobbyist. He was president of Federated Farmers. He’s now Minister for Biosecurity and Food Safety, Associate Minister of Agriculture, and Associate Minister of the Environment.

One of the party’s highest-profile MPs is Karen Chhour, Minister for Children. She’s been candid about her troubled upbringing, running away from home and going into foster care, and cited this experience as her motivation for entering politics.

Chhour drew intense criticism from Te Pāti Māori for repealing Section 7AA from the Oranga Tamariki Act, which required that agency to place uplifted Māori babies within their wider family. She’s also been the architect of the government’s military style boot camps for young offenders, a policy that’s been heavily criticised for lack of evidence, often described as an election stunt rather than a serious attempt to address youth offending. A pilot of the camps saw ten children spend three months in a youth facility: one of the youths subsequently died in a car accident, two others fled from the community care facility they were placed in after the camp. McKee has described herself as a victim of bullying and that she’s found parliament to be an “unsafe work environment” after relentless criticism from Te Pāti Māori.

Hacking the system

A more diverse Parliament is one of the virtues of MMP as an electoral system. Groups not represented by majority votes in electorates can come in on a party list. The downside is that it creates an opening for vested interests to promote their own candidates into Parliament, to represent their own company, industry or group directly. Act has enthusiastically embraced this loophole, placing many lobbyists in key policy-making roles. This is having a significant impact on the governing agenda of the Coalition.

Act describes itself as a liberal party, but in its current form, it appears to be a confederation of lobbyists led by professional politicians Seymour and van Velden. Rather than a political party, it is primarily a vehicle for business interests to place their agents into roles where they can implement policy in the service of the sector, rather than the voters.

This is not a new phenomenon under MMP. New Zealand First has long championed the racing, forestry and fishing sectors. Yet Act has taken the championing of economic interests to a new level. Policies like the Treaty Principles Bill and boot camps seem to function as distractions from the party’s primary goal, which is to deregulate and deliver preferential policies for industries represented in the caucus.

Seymour will spend the start of next year advocating for his Treaty Principles Bill, which will have six months before the select committee before it’s then voted down by every party except Act. Shortly after this, he’ll become Deputy Prime Minister. The only serious restraint on his power will be his fellow minor party leader Winston Peters. Christopher Luxon and National seem to find themselves repeatedly outmatched by him.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, Victoria University of Wellington

Note to Media: This analysis can be freely re-published by any media outlet.