Wellington public relations consultant Catherine Judd is promising to "humanise" and "renew" Act after cruising to a surprisingly comfortable victory in the party's presidential race.

Endorsed by retiring president Sir Roger Douglas, she beat long-standing party member and Hawkes Bay farmer John Ormond by 1254 votes to 773 in a postal ballot of members.

Mr Ormond's defeat is a blow for those in the party unhappy with Sir Roger's management style, exemplified by the simmering row over the ranking of the party's candidate list at the 1999 election.


Mr Ormond had promised to "democratise" the party - a thinly-veiled criticism of the power exercised by Sir Roger and his allies.

Party sources indicated Ms Judd, who formally joined the party only in recent weeks but ran an impressive campaign, had secured much of the non-aligned vote not tied to the ideologically strict Douglas camp or the more pragmatic Ormond faction.

Both candidates tapped party dissatisfaction that Act is not getting its message across to voters and that is why the party is languishing below 5 per cent in the polls

Pledging to bring passion and flair to her new post, the 51-year-old Ms Judd assured delegates at Act's annual conference in Christchurch that the party would stick to its core principles of freedom and choice and not adopt expedient policies.

Her immediate challenge is to boost membership, which is stagnating, judging from the 2000 or so votes cast for the presidency.

Delegates were privately pleased the party had a fresh face at the top - and a female one - after years of being fronted by Sir Roger.

The party's iconic figure, however, will still exercise influence through sitting on Act's management board in his new role of "patron," a position created to acknowledge his status as Act's co-founder.

Derek Quigley, the other co-founder, was also elected as a patron.

During the conference, Act's finance spokesman, Rodney Hide, received strong endorsement for his proposal for a flat tax rate of around 20 cents, a policy which would abolish the 33 cent and 39 cent steps.

Mr Hide is also proposing a tax-free threshold on the first $10,000 of income - a move to silence critics who say a low flat-tax helps the well-off but hits the low-paid.

The policy package would cost the Government around $7 billion a year in lost revenue, but Mr Hide said it could be paid for through forecast surpluses and contingency funding and that it would also boost economic growth.

Act is also considering limits on the time people can stay on welfare, possibly restricting to just two years the right to receive a benefit continuously.

After that, non-invalid beneficiaries would have to find work, although emergency assistance would be available on a case-by-case basis.

A conference discussion paper mooted a two-year limit on receiving welfare continuously and a five-year lifetime limit - the approach adopted in the United States.

"Time limits on welfare create a sense of urgency, signalling that welfare provides temporary financial assistance - bridging finance - and is not a lifetime right," the paper states.

Act's social welfare spokeswoman, Muriel Newman, said the actual time limits had yet to be determined, but she expected them to be written into party policy for the next election.

Act is also proposing teenage mothers be counselled to live with parents and to finish school.

Cash payments would no longer be available to teenage parents wanting to establish independent households.