This week’s allocation of up to $30million of the Provincial Development Fund for the creation of all-weather horse racing tracks, gave effect to coalition agreement between Labour and New Zealand First and tripled funding initially announced earlier this year. This adds to the Budget’s tax breaks of about $4.8million to horse breeders.
This funding to the ‘sport of kings’, an elitist, gambling based industry, which exploits animals, is unjust on many counts. There are conflicts of interest in every corner – Winston Peters and NZ First received electoral donations from the racing industry which they are now rewarding with tax breaks and subsidies for facilities. The head of the Provincial Development Fund (PDF) advisory committee is Rodger Finlay who is also a director of the Thoroughbred Racing Industry. Teachers and nurses struggle for decent wages but horse racing gets largesse through an obscure process without having to justify costs and returns on investment. It’s obvious the money for horse racing could be better spent elsewhere. As Frank Macskasy said in The Daily Blog in January when $10 million for this sector was first announced, the money should be going into putting roofs over peoples’ heads, not over race tracks.
But the allocation of these funds shows again the disproportionate money and power accorded to New Zealand First (NZF), especially relative to the Greens, arising from the Labour / NZF coalition deal. New Zealand First got only 25,000 or 1% more of the vote than the Greens, in last year’s election. But in the budget alone, NZF gained concessions of about $3billion compared with the Greens’ $610million.
James Shaw, co-leader of the Greens says they’re not disappointed to get a much smaller share than NZF. “It’s about power too”. There’s the proposed check-out bag ban, the Climate Change Committee, public transport and walking and cycling gains. But the Greens are definitely poorer in the power stakes than NZ First – not just in what has been given, but in what’s been withheld. NZ First appear to have a veto on matters of significance and symbolics. NZ First has won on matters of principle: $2.3 billion for new military planes shows a victory for the hawks over the doves. The Kermadec Ocean Sanctuary has stalled in favour of NZ First’s desire to maintain fishing there – meaning it would be no real sanctuary at all. Labour’s apparent commitment to no new mining on Conservation land, a policy shared with the Greens, has been undermined by Shane Jones’ claim that mining is essential to the West Coast economy and won’t be supported by his party. The 90 day hire and fire employment provisions still apply for small businesses because of NZ First vetoes. The waka jumping bill is another dead rat for the Greens to swallow in the interests of ‘Government stability’.
There’s no doubt, despite the marginal difference in votes, NZ First hold much more power than the Greens, and also exert disproportionate influence on the government agenda, with coalition agreement specifics, budget demands and seats at the Cabinet table allowing NZ First to call many shots.
None of that should be surprising though, when you use Game theory to look at NZ coalition politics. Game theory applies mathematical calculations to strategic decision making between theoretically rational participants. In zero-sum games, one ‘player’s’ gains come at the cost to other participants. ‘Nested games’ and ‘the Prisoner’s Dilemma’ are other ways of understanding the permutations, benefits, losses and trade-offs of players strategic decision making. These theories are often applied to coalition politics because of the clear strategic ‘game playing’ involved in forming and maintaining a coalition and in striking subsequent agreements.
In Game theory, participants have choice to co-operate or betray (or defect), and often, co-operation is the best strategy. In a classic description, participants can increase their power by forming a coalition, but in the Prisoner’s Dilemma, a subset of players (voters, represented by a party) can increase their own power while decreasing the average voting power of the electorate as a whole. Note the power given to NZF through this Government’s coalition agreement; the relative decrease in power given the similar vote of the Greens, and decreased power of the simple majority of voters for National.
Most coalition governments will form with the minimum number of parties required. After the last election, Labour and NZF were able to get over the line but required the Green Party votes on Confidence and Supply. In unstable coalitions (which could include our own where NZ First and the Greens are at opposite ends of the political spectrum) where party interests are disparate, the agenda setter has a key role in limiting alternatives available to the group. And this is a role that’s being well exercised by NZ First, both in specifying expectations in the formal Coalition Agreement, and in its veto on a policy by policy basis. What NZ First doesn’t like, seems unlikely to go ahead. Noting though that the ban on new marine oil and gas exploration may be the exception.
In ‘Nested games’, payoffs vary according to the specific forces operating between coalition partners. But each party still has options to co-operate or defect. A party benefits most when it follows its own partisan interests (theoretical triumph) while the other parties follow the interests of the coalition (the theoretical sucker). Indeed NZF successfully keeps its own interests to the fore, which, in the long game, the Greens fail to do – disappointing its voters and at risk of becoming redundant (the theoretical penalty) as has befallen small parties in NZ in similar conditions before it.
By applying Game theory, Nested games and the Prisoner’s Dilemma to current NZ politics, we can see that NZ First is playing the sharpest game; it’s triumphant in many policy and funding allocations. Meanwhile the Greens celebrate relatively small wins, with no real incentive to defect, playing the sucker in Labour and New Zealand First’s game.