Prime Minister Chris Hipkins (left) with Australian Prime Minister Anthony Albanese during a street walk and visit to businesses in the Leeds St precinct in Wellington. Photo / Mark Coote
Prime Minister Chris Hipkins (left) with Australian Prime Minister Anthony Albanese during a street walk and visit to businesses in the Leeds St precinct in Wellington. Photo / Mark Coote
Typically, investors get into a blue funk as a crucial election gets closer.
Companies hedge their bets as directors decide whether or not to press ahead with significant redundancies, depending not just on their view of the economic outlook, but also the political outlook.
There have been crass examplesof this in the past. Particularly, the wave of redundancies that followed quick smart after the 1987 election (and in advance of the sharemarket crash) when the free-wheeling, free-market fourth Labour Government was returned. In that case, some company chiefs had not wanted to crimp Labour’s chances by slashing staff sooner, particularly in those state companies that were being corporatised.
From conversations in the past week, there is a great deal of pre-election reckoning happening right now. But the calculation tends to be about whether the election will deliver a business-friendly Government, or one that is bent on higher tax rates and more regulation.
It is by no means certain — even after the quite disgraceful situation where five Cabinet Ministers including Jacinda Ardern have either bailed or been forced to resign in just over six months — that the electorate will punish Chris Hipkins and Labour to the extent that they should.
There is bench strength within Labour, but the rising stars of their next political generation have yet to be blooded.
Labour’s leadership has been too confident of making a home run against National, given that party’s lacklustre ratings and leader Chris Luxon’s inability to forge a close relationship with voters, to recognise they are on the verge of reaching a stop-loss point.
This weekend Labour will rank its list for the October 14 election.
List rankings are always highly political affairs. Never more so than when a ruling political party is blessed with an over-abundance of seats: Labour has 65 seats in this Parliament.
This has provided the party with an outright majority. But it has also made the Government too comfortable. The 20 or so MPs who know they stand to go out on the tide, the same way they came in at the 2020 election, are not going to rock the boat politically in the meantime, in the rather naive belief that keeping their heads down means they will be “saved” through a high list ranking for this year’s election.
Will National Party Leader Christopher Luxon's inability to forge a close relationship with voters hurt him come election time? Photo / Dean Purcell
The upshot is that policies which should have been vigorously contested within the Labour caucus before being promoted as Government policy, weren’t. Thus, we had the absurd situation of a newbie Prime Minister having to repudiate, or kick into touch until after October 14, a range of unpopular policies.
This can be viewed as smart politics by Prime Minister Hipkins, or Government incompetence.
The outcome of this election is important to business confidence.
If National and Act get over the line and form a Government, there will be a lift in confidence from the business sector.
That’s regardless of the fact that many women voters and younger people just don’t mesh with Luxon.
But being in government lends a great deal more credibility. As a Prime Minister, Luxon would be able to institute strong management (what former National Prime Minister Jim Bolger used to call horizontal management) and drive more disciplined Cabinet outcomes. There would be the added advantage of having Act on board to lift the level of ambition.
New Zealand First is possibly still in the play. But the key question is whether a handbrake is needed at Government level — or an accelerator to lift the overall tempo.
Labour now presents as tired.
Key philosophical differences on wealth and capital gains taxes have come to the fore.
David Parker and Grant Robertson — two current list MPs — clearly are not happy with Hipkins’ decision to rule out such taxes through a captain’s call.
It is a pity they did not stand their ground in Cabinet.
Labour needs a defining policy to differentiate itself from National.
If they do manage to cobble together a Government with Green and Te Pāti Māori support, wealth taxes will inevitably be part of Government-making discussions.
How much better it would be if Labour had displayed the courage of the party’s long-held convictions.
