Political Business

Lessons on political strategy

Posts tagged asset sales

0 notes &

Over selling

A rule in professional life is to manage expectations; don’t over promise, but over-deliver.

Despite the professionalisation of politicians, the desperation of popularity drives them to ignore this rule.

They regularly inflate the likely results and reasons for their planned policies. Then they inflate the actual results, and change the reasons, once the policies play out.

The “inflating expectations” approach helps politicians feel they are winning the immediate popularity contest. But it means they are always losing contests they’d attempted to win this way in the past. All those exaggerated promises are regularly returning for explanation as to why it didn’t turn out.

It is this erratic and inconsistent approach to describing problems and solutions that generates mistrust among voters. 

In fact, this approach is why politics is a slippery slope; why Governments seem to mount up troubles the longer they go. In short; the inflated promises about solutions to inflated problems catch up with them.

For example, the National government raised expectations of its partial asset sale plan by saying it could earn $10 billion, reach 250,000 investors, and include “Mum and Dad” investors. When the first two sales unfolded flatly, the Government tried to deflate its previous claims, claiming instead that it was now expecting $5b.  The Meridian Energy shares attracted only 62,000, and the sale price was right at the bottom of the suggested range.

Politicians would do better to downplay problems, and underplay their responses. In fact, they’d do better not to own too many problems or solutions in the first place. But then we would all start asking about the point of politicians.

Filed under john key asset sales promises over-promising policies over-selling mixed ownership meridian mighty river power

0 notes &

National burns off core voters

By delaying partial asset sales to deal with Maori interests, National is burning off core voters.

When the issue of Maori claims on water arose, I mused that this may be the angle National needed to regain support from mainstream voters. I thought National could gain support from middle-New Zealanders peeved to see Maori interests dictating the matter.

To gain that support, National needed to be strident about its plan. By delaying for further negotiation and perhaps legal challenges, National now appears to core National voters, and some swinging voters, as having weakly given in to Maori interests.

This is politically dangerous because these voters were among the few people supportive, or at least agnostic, on partial asset sales.

National has now managed to annoy two very sizable chunks of voters: “nationalists” who are bothered by the idea of selling profitable assets to foreigners, and conservative white voters who don’t like giving in to ‘unjustified’ Maori claims.

Maybe National is making the only choice it can in the circumstances. Maybe it is the right choice. Key says the delay will provide certainty that should shore up the share price.

Either way, the announcement makes the asset sale programme look very tatty. At best it is a delay forced by not planning well. At worst it is a delay forced by lack of willpower.

It has been pointed out that the issue could be the crippling of National as the Foreshore and Seabed issue was for the Labour administration in 2003. The pundits forget that despite antagonising Maori, Labour saw out two more terms in power!

This delay is more reminiscent of a particular moment in Labour’s foreshore saga. In Christmas 2004 (I think) Helen Clark delayed a decision on the issue until the following year, hoping that the summer recess would defuse the heat. She was wrong, Labour came back to increased controversy.

Politicians love delay, but it only stalls the inevitable. The partial float delay is likely to give the public even more reasons to wish National had never thought of asset sales at all.

Filed under asset sales national John Key foreshore and seabed labour helen clark maori

0 notes &

Inane political tweets #1

Containing a good argument within a tweet is tough. The trouble with Twitter is that it encourages MPs, and anyone, to voice opinion rather than considered argument.

So Wigram MP Megan Woods, Labour’s spokersperson for Youth Affairs, tweeted a poor argument against National’s ‘asset sales’. She argued that National’s claim it had a mandate was not a good one, as Hitler also had a “pretty clear manifesto”.

Around the caucus coffee table this faulty analogy probably gets murmurs of approval.

But when written down, it’s revealed to be a protest slogan, but a pretty hopeless argument.

“Hitler had a pretty clear manifesto that he campaigned and won on. Question: does this make what he did ok @NZNationalParty? #SaveOurAssets

Woods got in trouble for the tweet, but only for the comparison with Hitler, not the poor quality argument. Ironically that simply entrenches the power of the Hitler  comparison for later use.

Filed under megan woods hitler tweet asset sales

0 notes &

The word of the week is: determined

National’s spin phrase from the conference is: ‘determined’.

The word is out, National will no longer be a shrinking violet. National ‘knows’ its plan for the economy is good, so it will now be more determined to carry it out.

Over the past four years, National’s annual conference has tended to reinforce the theme of the year. These have varied from driving public service to hit targets and public private partnerships (PPPs), to the mixed ownership model for state assets.

This year there is no new economic theme or plan. This year National has decided to say that it really, really means all the stuff it’s previously announced.

It especially means it with asset sales, so will incentivise share purchases, and is especially keen on oil and gas exploration.

So the word ‘determined’ was spun between Ministers, MPs, delegates and media.

This is revealing in a number of ways:

1) National is trying to talk itself into a determined mindset. Which means it isn’t quite sure, or at least that it needs to jump start itself into this mindset.

2) National is acknowledging that it’s been too careful in the past about following through with plans. What the heck ever happened to PPPs?

3) After four years of strong polling, National is finally confident that it has public support, so is less bothered about upsetting its usual opponents.

Strategically, this is the best route. You either cringe your way to the next election, or do the things you think are right, and/or popular.

Two words of warning though;

  1. the “determined” talk is simply a feedback loop within the political class. Just saying it doesn’t make it so, and it is unlikely to be communicated across to the voting public. It’s especially hard to carry on with your determination when your Government has now slipped into the frame whereby almost any action is an invitation for controversy.
  2. public support doesn’t tend to wax and wane accurately. Sentiment tends to reach tipping points then change dramatically. That’s why Key’s wariness served National well in the first term.

Filed under national john key conference ppp asset sales

0 notes &

Taking opportunities: asset sales example

The dispute over Maori water rights could be the best opportunity the NZ National Government has of winning over the public to asset sales.

Issues on the public agenda morph subtly over time. People start them and twist them to suit their arguments and objectives.

A skill of PR is to understand why this happens and what they could change into - and use that to political advantage.

A recent NZ example is the Bronwen Saunders ACC issue, in which a beneficiary of state accident welfare was mistakenly sent private details of other ACC clients. The issue shifted all over the place, and ended up twisted by Government opponents into being an example of ACC’s philosophy of ‘forcing’ people off welfare.

The sale of shares in state assets has just done the same thing. The dispute has been over the principle of whether State should sell assets, whether people supported it, and variations on whether the sale would work.

The sale is now being challenged through the Waitangi Tribunal, by Maori interest in water rights - as some of the assets are companies that own hydro dams. 

Based on the false assumption that any controversy is bad, most pundits in the political class quickly fell into thinking the Maori dispute is a bad thing for National.

Opportunist political strategists might say the development couldn’t have been better.

Firstly, it’s a distraction.

National has failed to convince the public that the mixed ownership model is a good idea.  Doubts have also been raised about whether there is enough discretionary investment money available among consumers to buy shares. Moving onto a deeper nationally divisive issue is a god-send.

Secondly, Mighty River Power could be turned into the biggest political “dog whistle” for forty years.

The Maori dimension gives National a chance to use the asset sales as a bold expression of the majority belief that the State owns and controls the nations assets.

The previous Prime Minister, Helen Clark, showed the popularity power of facing down Maori rights to Foreshore and Seabed. The vast majority of public believe water should not be owned, and is best overseen by the State.

Key is far more tentative than Helen Clark, because he doesn’t like getting offside with people, and because National still thinks it needs the Maori Party.

So he has taken it gently - saying it will consider the Tribunal conclusion, but is not bound by it.

Knowing its own constituency, the Maori Party is indignant and stroppy.

It’s hard to be sure that Key fully appreciates his core constituency. Until now he has operated on the basis that his constituency is every New Zealand citizen. Admirable, but hard to please.

An awkward stick in the spokes is that National gave Clark a hard time over her approach to the Foreshore issue, even though every National MP we knew then philosophically supported it.  Never mind, the political past can be easily shrugged off.

National has the option of turning the sale of Might River Power into a vote-winning symbolic nose-thumbing at Maori interests. But it’s not John Key’s style. In which case, he may well lose public confidence over water rights and asset sales together.

Filed under asset sales John Key National mixed ownership model maori

0 notes &

Promises, promises

Is there such a thing as a politician who keeps too many political promises?

We might be finding out with the intent of NZ Prime Minister John Key to stick to a pre-election promise to use a “mixed asset model” (which sells shares in some state assets). The vast majority of voters dislike the concept, although it is unclear how well they understand it. John Key says that it was an election promise, so he not only has a mandate (see other blog) but is honour-bound to keep it.

To give John Key credit, keeping his election promises has been an article of professional faith for him. He has seen too many other politicians fatally lose credibility from not keeping their word.

He is right. Personal and professional integrity is closely linked to reliability. We trust, and like, people who do what they say they will do - and who stick to their beliefs.

He might be missing is that people, and politics, are inconsistent and complicated. The traits we value are entwined. We also respect people who listen, who change their mind on solid grounds, and who can admit being wrong. These things can trump keeping a promise. But it’s VERY hard to judge which trait they will value more at any one time.

Also at question here is whether the mixed ownership model was actually a “promise”. It was part of National’s election platform - but that was never because it thought the public wanted it.

Election “promises” are the things which are top-of-mind attractive to a very large number of voters. People are upset only when these sorts of ‘election-winning’ promises are not kept.

John Key says that people don’t understand the model very well - which indicates that it was not really a subject to which they paid much attention during the election.

So what John Key is left with is his determination to introduce the model because he believes it is a good thing for the country. Key’s route should be to earn voter respect for sticking to something he thinks is best, not something people voted for.

Filed under mixed ownership model asset sales john key promise election promise

1 note &

Voters’ cognitive dissonance

NZ Prime Minister, John Key, is risking what I term “voter dissonance” when he claims that winning an election gave him a mandate to sell shares in some State assets.

Cognitive dissonance occurs when voters disagree with the position of the Party for which they vote. Voting is effectively a compromise between what the voter wants and what the politician or political Party offers. To live with this compromise, voters subconsciously re-prioritise or otherwise rationalise, the things they like and don’t like.

I believe this happened on a large scale in the last NZ election over the issue of “asset sales”. People voted for National for a lot of reasons other than asset sales.

The huge variation in rationale between voters makes the notion of a mandate on any policy very unlikely. Politicians might be fooling themselves if they believe in a mandate, but they are making a bigger mistake in telling the public they gave the Government a mandate. 

The ‘mandate’ claim forces voters to revisit the original cognitive dissonance in which they suppressed the things they didn’t like about National. The change in context - i.e. outside of an election - means the discomfort is less severe. People can more easily focus on the asset sales policy and decide if they like it or not. 

Key would be better advised to concentrate his efforts on a persuasive rationale for the mixed ownership model. Reminding people of the original compromise they made when they voted is just tempting them to change their minds.

Filed under cognitive dissonance voter dissonance political dissonance mandate political mandate election mandate john key asset sales mixed ownership model