Matthew Hooton: Why an early election is Labour’s winning bet

OPINION:

The Prime Minister’s office says that no consideration is being given to changing the date of the election and that Chris Hipkins’ focus is on the emergency response to Cyclone Gabrielle and the cost of living.

Mind you, the same Beehive told us Jacinda Ardern would seek a third term. If Labour wants to win that third term, analysis suggests its best chance is Saturday, April 15.

Pundits claim governments are punished for calling early elections, but there’s no evidence for it.

In 1951, less than two years into his term, Sid Holland gave just seven weeks’ notice of his waterfront-strike election, and won a record 54 per cent.

It’s said voters punished Robert Muldoon for announcing, on June 14, 1984, an election just 30 days later. But Muldoon was doomed anyway and being clearly drunk at the announcement didn’t help.

Even then, National’s vote fell by just 6000 compared with 1981. Its vote was up over 11,000 compared with its 1978 win.

The left frets about Helen Clark’s captain’s call on June 12, 2002, to hold an election six weeks later, tempted by polls putting Labour above 50 per cent. On the night, it won just 41 per cent.

But Labour’s polling held up perfectly well for the first four weeks of the campaign. It fell below 50 per cent only when Clark lost the plot after Nicky Hager published a fantastic tale of Clark and her Environment Minister, Marian Hobbs, covering up an accidental release of genetically modified corn seeds two years earlier.

Clark would have been better adopting Hobbs’ calm response that “Nick Hager’s conspiracy theories do not match the facts”.

Whenever the election, Hipkins will recall that lesson.

Hipkins and his inner circle are students of Tony Blair and Gordon Brown’s British Labour Government, including its ultimate defeat by the Conservatives’ David Cameron.

After replacing the unpopular Blair in the summer of 2007, Brown quickly improved Labour’s polling from two points behind to 10 ahead.

The Conservatives were terrified of speculation about a snap autumn election but Brown lost his nerve, opting not to risk his guaranteed short period as Prime Minister for the chance of a full term. The economy worsened, the usual events and scandals mounted up, and Brown lost narrowly in May 2010.

In autumn 2023, Hipkins has a chance to place the bet Brown was too scared of in autumn 2007.

National is unready, having not completed candidate selections and offering no policy beyond bland slogans to “deliver results so that all Kiwis get ahead”.

After dropping Ardern’s unpopular policies, ditching her woke language and infuriating frowny-concerned schtick, and now adequately managing the cyclone, Hipkins has earned a similar boost to Brown’s in 2007.

National’s pollster, Curia, reports Hipkins’ net favourability is plus 27 per cent, higher than Ardern’s at any time through 2022, and well above Christopher Luxon on minus 5 per cent. Perceptions about the country’s direction have improved marginally and Labour has made material gains in how well voters think it would handle all the top issues worrying them.

Reid Research reports that around half of all voters trust Hipkins compared with just a third who trust Luxon.

Combined, Luxon’s zero-target strategy and Hipkins’ bold u-turns have removed all the major points of policy difference between the two main parties. If that makes the election a mere popularity contest, or even just about which devil is the least bad, Labour wins.

Labour gains nothing from giving National time to finalise candidates, bash out some policy and perhaps choose a new leader, all the while waiting for even higher interest rates and the looming recession.

Most importantly, Labour needs a new tax policy from July 1 this year, including tax cuts for people in the $50,000 to $100,000 range and tax increases on very high earners.

Asking voters to wait until July 1 2024 is electorally unacceptable.

Getting the money flowing to its supporters from July 1 — and being collected from its opponents — requires the tax changes to be announced in the Budget, expected on May 18.

Labour’s problem is its 2020 tax policy. That promised no new taxes or increases to income tax this parliamentary term, except for the new 39 per cent top rate on incomes over $180,000 that is already in place.

Labour went further, not just ruling out any further tax rises but also promising no income tax changes at all. Voters may not be so prone to punish a government for breaking a promise not to cut taxes but, in a close election in which Labour will accuse Luxon of a secret agenda, any deviation from its solemn 2020 tax policy is a risk.

This argues for an election ahead of the May Budget. Now mostly finalised but unannounced, the Budget work provides Labour with a ready-made manifesto, all carefully checked by the Treasury and clearly ready to be implemented — in contrast to National which offers nothing.

If called today, an election could be held on March 25, but that would be gauche in the midst of the flooding. No government would hold an election on April Fools’ Day, and the next weekend is Easter, which means Saturday, April 15 is the first available date, still a clear month before the Budget.

With voting starting the week beginning April 3, Labour would worry about the Reserve Bank’s official cash rate rise on April 5. But much better to cop that than wait for another increase on May 24, followed by four and a half months of higher mortgage rates through to an October 14 election.

An alternative is holding out for two more weeks, until April 29, with voting starting around April 17. That involves betting that the food and rent indexes on April 17 show some improvement, and that March-quarter inflation is better than expected when reported on April 20.

Labour could also benefit from planned increases to the defence budget, expected to be announced around Anzac Day on April 25.

But sooner is safer than later, tipping the balance to April 15. That gives a month for any coalition negotiations and consequent modifications before the May 18 Budget would be used to launch the new government.

This requires Hipkins being prepared to risk being a mere footnote, having been Prime Minister for just three months. But nine months isn’t much better. If he takes the risk, it’s odds-on Labour would win a third term, and Hipkins at least three years in the top job.

Labour has demonstrated enormous courage so far this year, and earned the polling returns.

Does it have the nerve to take the next logical step, and boldly put a ring around April 15?

- Matthew Hooton is an Auckland-based political and public affairs strategist. His clients have included the National and Act parties, and the Mayor of Auckland.