By Denis Bright
The ghosts from NZ’s Mixed Member Proportional (MMP) voting system from a National Party initiated referendum in 1993 are keeping Prime Minister elect Christopher Luxon at least temporarily out of office in 2023.
Five weeks have passed by since the NZ election on 14 October 2023 delivered no party with close to an absolute majority. In a dramatic development just announced by Radio NZ (21 November 2023) far-right minority leader David Seymour of the Act Party has put in a bid to become Deputy Prime Minister through his mandate over eleven seats in NZ’s unicameral parliament.
Under the first past the post voting system, Christopher Luxon would have a huge parliamentary majority. MMP makes the formation of a majority government difficult to achieve. It empowers minority parties as in most voting systems across Western Europe and in the Australian senate since the 1949 elections.
Against all odds, NZ Labour’s Chris Hipkins is still the leader of a caretaker government. Expect logic and self-interest to prevail. Both NZ First and the Act Party are striving for more cabinet posts in a virtual coalition of opposite values striving for some consensus in the corridors of power.
Despite the strong swing to the National Party on 14 October 2023, the return of overseas and out of town votes produced a slight decline in overall votes for the National Party which did not gain an initially expected fifty seats in the 122 seat NZ parliament. Returns from NZ’s Party List vote of 51 seats also delivered seventeen seats to Labour.
The results in the 65 seats for open contests on MMP protocols in the general electorates went largely to the National Party.
Should all negotiations fail, Winston Peters could support a four-part centre-left minority government of Labour, Greens, Te Parti Māori (Maori Party) and Family First with 63 seats. This would be a slender majority of just one seat. The conservative populist within Winston Peters secured the first term of minority government for Jacinta Ardern in 2017. This time, the potential centre-left grouping is much more diverse. However, there is little in common between Family First and the brash assertiveness of David Seymour with a total of eleven representatives for the Act Party.
Perhaps NZ’s diverse voting patterns as shown by the returns from the General Electorates justifies a quite broadly based government with a change in Labour Party leadership and quite conservative representation for NZ regions. Either side of the political aisle could offer this diversity in its coalition formula.
Media monitoring by Google Bard does suggest that NZ’s trading and investment ties with China were also a factor in generating distrust for policy processes in NZ Labour’s administration. The pressure came from intelligence partners in the Five Eyes Network.
An article in News Corporation’s New Zealand Herald from February 2023 noted that “New Zealand faces ongoing pressure to upgrade anti-China stance” from its Five Eyes partners. The article cited comments from Foreign Minister Nanaia Mahuta, who said that New Zealand was “uncomfortable” using the Five Eyes grouping to criticize China over human rights.
Another article, published in the US Government funded Voice of America (VOA) News in November 2022, reported that “New Zealand Criticized for ‘Five Eyes’ Alliance Stance on China.” The article described how New Zealand was criticized for its reluctance to sign joint statements from its Five Eyes partners condemning China’s actions in Hong Kong and Xinjiang.
US self-interest also prevailed in seeking a change in trading and investment relationships away from China across the Asia-Pacific Region. The US has a trading deficit with China. Imposing this problem on the entire Asia-Pacific Regions seems to be an added cost of loyalty to strategic policies in a US Global Alliance that currently excludes NZ because of its opposition to nuclear powered military vessels carrying nuclear weapons into NZ ports on their global sorties.
Even the previous Labour government took the advice from its overseas intelligence allies very seriously.
The mainstream media created the impression that China and Taiwan China are totally at loggerheads over strategic issues. The election of Democratic Party leader Tsai ling-wen in Taiwan in 2016 has not changed this situation even though military vessels from the US Global Alliance, including NZ jaunt through the Taiwan Strait on Freedom of Navigation sorties. Taiwan’s deputy minister pf economic affairs, C.C. Chen noted: “From day one, when President Tsai took office, China has been our largest trade partner. We don’t want to rock the boat. We want to make it stable.”
According to Google Bard, the NZ frigate Te Kaha traversed the Taiwan Strait to demonstrate the goodwill of NZ towards the US Global Alliance. The NZ Royal New Zealand Navy frigate HMNZS Te Kaha conducted a freedom of navigation operation (FONOP) on 13 July 2023 in the Taiwan Strait accompanied by the Canadian frigate HMCS Regina and the United States Navy destroyer USS Mustin.
Pressure was also placed on the NZ Labour Government to open a lucrative contract worth $NZ475 million to operate a national ticketing system for a decade which may be extended to charges for NZ motorways in the future (Radio NZ 20 November 2023). Delivery of the new tap-on fare systems in NZ is behind schedule and public transportation systems are having to patch up older electronic fare readers in Auckland which are currently operated by Thales, a French multinational company.
Just why Australia and NZ cannot develop their own tap on fare systems is difficult to understand. Even in Victoria, the big end of town and multinational companies have a significant role in the Conduit Business Systems which were awarded fifteen-year contracts to deliver Myki fare systems (Banking Day 16 May 2023 and Google Bard):
- Australian Payment Network (APN)
- Cubic Transportation Systems
- Infineon Technologies
- Mastercard
- National Australia Bank (NAB)
- NTT DATA
- Thales Group
- Visa
- Victorian Government
In caretaker mode, NZ Labour is still beginning the role out of new facial recognition technology in tap-on fare systems in lucrative transportation contracts awarded to Cubic Transportation of San Diego according to Radio NZ (15 November 2023).
The NZ contracts in favour of Cubic Transportation were noted in media monitoring as Chinese companies were not short-listed:
i) The New Zealand Herald defended the government’s decision, saying that it was “necessary to protect national security.” The newspaper also quoted a government spokesperson as saying that the decision was “not about the country of origin of the companies involved, but about the security of our infrastructure.”
ii) The Dominion Post also defended the government’s decision, saying that it was “prudent to exclude companies from countries with a history of cyber-attacks.” The newspaper also quoted a cybersecurity expert as saying that the decision was “a sensible precaution.”
iii) The South China Morning Post reported that the Chinese government had expressed “regret” over the decision. The newspaper also quoted Chinese analysts as saying that the decision was “a sign of growing anti-Chinese sentiment in NZ”.
iv) Media monitoring also notes some of the problems associated with Cubic Transportation and its links with Cubic Defense Industries as an electronic provider to the US Global Alliance:
- Bribery Allegations
- Cubic has been embroiled in several controversies surrounding bribery allegations in various countries worldwide. In 2014, the U.S. Securities and Exchange Commission (SEC) fined Cubic $2.2 million for bribing officials in Mexico to secure a $100 million contract. Investigations revealed that Cubic had engaged in similar practices in India and Indonesia.
- Cost Overruns
- Cubic has a history of involvement in projects that have experienced significant cost overruns, raising concerns about its project management capabilities. In 2013, Cubic was contracted to develop a new fare collection system for the Metropolitan Transportation Authority (MTA) in New York City. The project, initially estimated to cost $500 million, has since ballooned to an estimated $1.2 billion.
- Tax Avoidance
v) Cubic has been accused of engaging in tax avoidance schemes to minimize its tax liabilities. In 2017, the Paradise Papers, a leak of millions of confidential documents, revealed that Cubic had used offshore entities to shelter profits from taxation.
Concerns in the mainstream and News Corporation’s media outlets over the extent of commercial relationships between NZ and China should perhaps be balanced by mention that a similar situation applies in most regional countries from Japan to Taiwan China, Indonesia, PNG and Australia. As in Taiwan China, there are negative consequences for local economic welfare if profitable commercial trading and investment ties with China are suddenly reversed in favour of weaker ties with the Quad countries of Australia, India, Japan and the US itself.
Both NZ Treasury and BNZ project a lean period for real economic per capita growth in NZ. Both sources project real per capita growth to be 0.6-0.7 percent in 2024.
Christopher Luxon has also said that he would take a more cautious approach to Chinese investment than the current Labour government. The National’s new Crown Infrastructure Fund (CIF) would also be involved in scrutinizing Chinese investment with enthusiastic support from the Act Party.
Throwing in NZ’s political lot with the values associated with a greater commitment to neoliberalism will create choppy and divisive influences across the Tasman if the coalition of opposites survives until the first budget is delivered in May 2024.
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