Friday, April 29, 2011

Why Brash took over ACT

Why did Don Brash mount a corporate-raider style hostile takeover of ACT rather than found his own party and compete for votes in free-market style? Over on Public Address, Graeme Edgeler has an interesting theory: he did it for the broadcasting funding:

Each election year, the Electoral Commission starts a process by which it divides up a pot of public time (on TVNZ and National Radio) and money ($2.855m ex. GST) that registered political parties contesting the party vote get to spend on TV an radio advertising. It is the only money parties can spend on TV and radio advertising.


This provides a pretty big incentive for Brash to want to lead ACT rather than to have gone it alone in a new vehicle. Even if he brings in lots of money in donations, unless he's behind the Coalition of New Zealanders, the New Zealand Sovereignty Party, the Pirate Party of New Zealand, or the World Peace Party (the four unregistered parties which did apply), that new party couldn't have advertised on TV or radio. Another bonus, of course, be the level of funding. The Electoral Commission is hearing submissions from the parties today and tomorrow on the proper [sic. Allocation? - I/S] Based on past numbers, I estimate a new party will get $10k, and ACT will be up for $200k-$250k of public money to spend on broadcast advertising.

The irony here ought to be obvious: a paragon of the free market taking over a political party in order to receive a higher state subsidy. But I guess he'd just blame the perverse incentives created by the unfair allocation regime, which seems aimed at protecting and reinforcing the status quo. And he'd be right.