ACT leader David Seymour is prepared to veto a Budget and pull a National-ACT coalition government down if it does not share power with his party.
Seymour told POLITIK that MMP had evolved, and it was no longer a situation where the National Party could come to ACT and simply assume that ACT would support whatever it was proposing.
Seymour is talking about guaranteeing the government support on confidence motions but not supply.
But a government that could not get its Budget through Parliament would have to resign anyway.
So Seymour’s threat must be seen as just that; a negotiating tactic designed to force National to accept some of ACT’s core policy positions.
“This is really sending a message saying because you don’t have a guarantee if you’re going to pass your budget, you’re going to have to talk to us,” he told POLITIK.
“It won’t be what we accepted in the previous Government where Bill English would basically call a meeting two days before Budget and say, here’s what we’ve decided to do now, can you please vote for us?
“So the net difference will be that they are going to have to actually treat us a lot more collegially.”
However, he does not believe ACT would need to have a seat alongside the Finance Minister in the pre-budget bilateral negotiations between the Minister and each portfolio minister.
“No, because that involves a very high level of detail,” he said.
“You might create an envelope early on and say, look, we’ll let you deal with a certain level of detail, but it has to fit within this envelope.
“But what it means is that the overall parameters of the Government are something that both parties are involved in, rather than what the National Party would prefer, which I suspect is to set a budget and just take for granted everyone else in Parliament.
“I think they need to recognise that those times may be over.”
Nevertheless, what Seymour is proposing amounts to holding a veto power over a National-led government.
And it is a veto power that could conceivably be used.
ACT has big policies that National will find difficult. It wants to abolish the Zero Carbon Act; it is proposing substantial cuts to the public service and is generally opposed to the Government intervening in the economy.
Seymour is not impressed with many other National policies.
“They are keeping free school lunches and keeping fees free,” he said.
“They’re keeping the 39 cent tax rate.
“They now want to go around the country building charging stations, which I think Genesis is already doing.
“And so you have to ask yourself, is New Zealand in deep trouble under Labour and needs a new direction, or is New Zealand doing just fine and just needs people wearing a blue suit to manage the same policies?
“I’m very certain that New Zealand is in deep trouble and needs a significant change of direction.”
Seymour concedes that to vote against a Budget would be a drastic step.
“This is not our preferred option,” he said.
“We would rather have a tight agreement because I think New Zealand has got big problems, and we need to work together.
“But if the National Party thinks it’s going to be business as usual but wear a blue tie; well, sorry, that’s just not going to fly.”
At the heart of this issue is what sort of agreement National is able to negotiate with ACT.
Ideally, it would want a full coalition which would bind ACT Ministers to support all Cabinet decisions – which would include the Budget.
But what Seymour said yesterday suggests that ACT will hold out for its bottom lines in any coalition negotiation with National and that it is prepared to walk away and leave National as a minority government.
However, as Finance Minister Grant Robertson pointed out last night, to go further and vote against the Budget would topple the Government and force a snap election.
He said that Seymour was tipping the Government into absurdity, saying he wanted an arrangement where ACT would give National support for confidence but not supply.
“This appears to mean that they would not guarantee to support Budgets or other financial motions such as Imprest Supply Bills.
“That kind of Government has never happened before under MMP and would be incredibly unstable.
“This would effectively see the Government grind to a halt.
Robertson said supply was intrinsic to confidence.
“Apart from specifically called confidence votes, it is the passing of the Budget that shows whether a government maintains the confidence of Parliament,” he said.
What will complicate things for National Leader Christopher Luxon is if he has to form a government with both ACT and NZ First.
Seymour has already said he would not be part of a government with NZ First leader Winston Peters.
At the same time, some NZ First policies, if they were put into a Budget by National, would be highly unlikely to be supported by ACT.
For example, NZ First leader Winston Peters told the BusinessNZ conference last week that New Zealand should offer tax incentives to encourage research and development and exports.
There are voices within and around National who believe the party should try and ensure NZ First gets back to Parliament to balance ACT.
It may be that Seymour’s threat to vote against a Budget is his answer to that speculation.