Tax seems set to follow, and National is at risk of Ardern trumping it again.
Ardern may be incompetent at policy development and monitoring the performance of her ministers, but her opponents make a grave mistake if they extrapolate those weaknesses to her political acumen.
Ardern is the doyenne of the Grey Lynn woke set, but she also grew up in Morrinsville. She went to school with, and as a teenager served fish and chips to, the median voter.
She is calculating enough to know that if the inner-city luvvies in Auckland and Wellington can't stomach her move to the centre in election year and head off to the Greens, then so much the better for her re-election chances.
As with the new motorways, National will be legitimately aggrieved if Labour steals its ideas on tax.
A year ago, Simon Bridges promised a National Government would adjust income tax brackets to inflation every three years. Assuming 2 per cent inflation, Bridges claimed the first adjustment in 2021 would cost $650 million annually but give average wage earners a tax cut of $430 a year.
Finance Minister Grant Robertson countered by saying National's policy would give low-income workers just $1 a week but did not rubbish the policy in principle.
Having ignored the welfare working group's recommendations that unemployed and low-income people need more money in the pocket, Robertson could achieve something similar by adopting the gist of National's plan but extending it much further.
The alternative, leaving thresholds unadjusted as wages and prices rise, would ironically see Robertson taking us ever-closer towards Sir Roger Douglas' nirvana of a flat tax rather than the progressive taxation system at the core of today's Labour's rhetoric.
The political problem for Labour — and to a lesser extent National — is that adjusting thresholds gives a tax cut to everyone earning more than $70,000, including Ross Taylor at Fletcher Building on $5.3m a year, believed to be New Zealand's highest paid executive.
However, Labour has flexibility on this point in a way that National doesn't since it is not ideologically opposed to either raising the top tax rate or introducing a new rate for the highest income earners, as Helen Clark promised and delivered in 1999.
A new top rate of, say, 39 per cent, that kicked in from $150,000 would not only mean a big tax rise for Taylor and his colleagues, but would generate around $615m a year for the Crown.
Make it 45 per cent — the Australian top rate, albeit only on incomes over A$180,000 — and Robertson would have more than $1.2 billion extra to play with. If Robertson aimed only for fiscal neutrality, his tax cuts for most people could be double those so far promised by National.
Attempting to match Labour would almost certainly take National's finance spokesman Paul Goldsmith outside his fiscal comfort zone, especially as he now needs to find cash to best Labour on infrastructure.
Promising to fund infrastructure through public-private partnerships rather than debt won't help him politically, since, from an operating balance perspective, PPPs will always cost significantly more than the Government's risk-free borrowing rate.
Such a bold move on tax by Robertson would prompt National to argue Labour was increasing, not cutting, tax. Both main parties would immediately launch tax calculators to argue their package was the more generous. But unless National significantly relaxed its fiscal stance, it would lose those debates.
Median voters do not care about people earning more than $150,000 a year. In any case, even individuals earning a little more than that would also see their total tax burden fall.
With income splitting, a household on $300,000 a year would gain all of the tax cut and pay none of the tax rise. Median voters are perfectly happy for households on more than $300,000 to pay more tax.
National presumably spent much of its two-day caucus retreat in Havelock North working
out how to counter Labour's aggressive tack to the centre, including on tax. Usual practice is to hold off promises of tax cuts until just before the election, but that may not be wise this year.
Bridges' decision to rule out any dealings with NZ First and aim to govern with the support of Act alone means he must keep National-Act's poll rating well above 40 per cent all the way to September.
Even a couple of public polls showing National on, say, 41 per cent and Act on 2 per cent risks rendering both irrelevant to the election campaign.
Given such polls, National voters would start to see the election as a choice between a wacko new Labour-Green coalition or the continuation of a dodgy Labour-NZ First regime. Faced with that choice — and with Labour moving so clearly to the centre — a crucial percentage or two of National's supporters would inevitably peel off to NZ First to prevent Marama Davidson, Golriz Ghahraman and Chloe Swarbrick from sitting around the Cabinet table.
For the crucial National-leaning voters who will decide the election, a Labour-led government that doesn't introduce a capital gains tax, cuts almost everyone's income tax, talks about climate change and water pricing but doesn't act, and which is again fuelling house-price inflation doesn't seem too bad.
There's a reason Labour strategists were celebrating at least as hard as National MPs when Bridges announced his position on NZ First on Sunday.
* Matthew Hooton is an Auckland based public relations consultant and lobbyist.
