Dave Gee: Life from Right Field

ACT founder Sir Roger Douglas is returning to the political party, after leaving in 2001 over disagreements with leader Rodney Hide's style and policy direction.

Douglas has been revealed as a guest speaker at ACT's party conference next month, and is planning to take a more active role in the party during election year. His return seems to have been spurred on by National's strong polling, along with its steady drift to the left under leader John Key.

ACT suffered from being squeezed to "the right" in 2004-05 when former Reserve Bank Governor Don Brash took over as leader of the National Party. After winning 8 Parliamentary seats at the first MMP election in 1996, the ACT party slumped to just 2 seats in 2005.

New leader Rodney Hide upset the pundits (and a rogue Colmar Brunton poll) to win the Auckland seat of Epsom, but concern over wasted votes if ACT failed to break the 5% threshold or win a seat saw some supporters switch to other parties.

ACT New Zealand was left with just 2 MPs - Rodney Hide and Heather Roy - although some in the party saw the result as a chance to rebuild in a fresh direction, as many of the old "conservatives" left the party to join National.

A regional board member, Andrew Fulford, quit ACT in 2006, complaining that the party was dominated by its "libertarian faction". (For many in the party though, this was the whole point, and was seen as one of the positives to have come from the upheaval).

Rodney Hide admits having Douglas speaking to the faithful isn't enough, and that "we need a change of policies" and "That's Sir Roger's forte".

While that might signal a return to ambitious financial policies like a low flat personal tax rate, it will be interesting to see whether it also means a shift away from the more "libertarian" policies or ideals. (ACT rebranded itself as "The Liberal Party" in 2004, but the description "liberal" is often misunderstood in New Zealand).

Roger Douglas formed political lobby group the Association of Consumers and Taxpayers in 1993, after leaving Parliament following a falling out with Labour's leaders and opting not to stand for Parliament in 1990.

The group went on to became the political party ACT New Zealand two years later, after the country voted to switch to ditch the "first past the post" voting system, in favour of MMP. Douglas initially led the party, but stepped down in favour of Richard Prebble before ACT competed in the first MMP election.

As Labour Party Finance Minister, Douglas was responsible for rescuing New Zealand's economy, following years of neglect and arrogant mismanagement by National under (Sir) Robert Muldoon.

Roger Douglas made substantial and urgently-needed changes to New Zealand's former colonial economic system, including slashing inefficient subsidies and trade tariffs, and privatising public assets.

His policies were dubbed "Rogernomics", and also featured a major tax reform programme. Under Douglas (and Lange), Labour halved the top personal tax rate from a ridiculous 66% to a more moderate 33% (later bumped back up to 39% by socialist Labour Finance Minister Michael Cullen).

The company tax rate was slashed from 48% to 33%, while a new "Goods and services tax" (GST) was introduced (initially 10%, increased to 12.5% in 1989). (And despite the various tax rate reductions, the Government's tax take actually quickly went up).

* NZ Herald: Sir Roger makes his peace with Act
* 3 News: Douglas to return to Act party (Video)