Steven Joyce: Labour ministers’ rebellion reveals a Government in chaos

Senior ministers are openly disagreeing with the policy positions being endorsed by Prime Minister Chris Hipkins. Photo / Mark Mitchell

Opinion

OPINION

The stairwells in the Beehive are very handy when you want to go up or down a couple of floors quickly and don’t want to wait for the relatively pedestrian lifts. I used them a lot during my time in the building, most often to head between my office on the seventh floor and the PM’s on the ninth floor, for a meeting, a chat with John’s chief of staff or just to chew the fat with the PM.

Every now and then on those little journeys, I’d pause to wonder how dysfunctional things must have been towards the end of the Lange Government. It has been widely recorded that Lange and Roger Douglas resorted to communicating by writing letters to each other, such was their inability to simply get together and talk things through.

I still shake my head at that. How could things be so bad that you wouldn’t just walk the two floors between your offices to sit down and have a chat, or indeed, several chats?

Surely you’d have sufficient self-awareness to know that writing pointed letters to each other would be counter-productive? You’d think the project (that is, running the country) would in the end be bigger than any individual’s ego.

I relate that because I suspect we are getting to a similar point of dysfunction in the current Government. Hopefully, Messrs Hipkins, Robertson and Parker aren’t sitting in their offices writing letters or WhatsApp messages to each other, but in some ways what we are seeing is worse (and what all the letter writing in the late 1980s led to). Senior ministers are openly disagreeing with the policy positions being endorsed by the Prime Minister, and not just the once.

I made an observation at the time of the wealth tax cancellation that Finance Minister Robertson was very open with his displeasure about the decision, referring questions to the “Labour leader” and being clear that he still thought the tax was the right idea. Since then things have got worse.

David Parker’s behaviour was petulant, openly declaring he disagreed with the announcement and then taking the almost unheard-of step of requesting to be relieved of the revenue portfolio. In any Government I can recall, that would result in you being relieved of your ministerial warrant in full, not just the portfolio you felt so burdened by.

Which brings us to this week’s latest tax confusion. It was National that suggested Labour was about to announce removing GST on fruit and veges, but it is the response from Labour — or more correctly, assorted Labour ministers — that has given the idea legs. With Chris Hipkins failing to rule it out, and novice ministers Barbara Edmonds and Ginny Andersen clumsily almost ruling it in, it seems reasonable to assert that the idea is at the very least under active consideration. And that’s despite the latest forceful rejection of it by Minister Robertson just weeks ago. Former Revenue Minister Parker added fuel to the flames with his enigmatic response about whether it was GST off fruit and veges or the wealth tax which was the final straw for him.

Removing GST from one class of goods or services, however deserving it may seem, would be a very backward step. Once that door is open there are any number of worthy candidates for GST removal (other food, sanitary products, new houses, transport fares and so on). Before you know it, we’d be back to the hodge-podge of sales taxes we used to have before GST was created. To say nothing of the eternal debates about the merits of fresh versus canned or frozen veges.

Prime Minister David Lange (seated) and Finance Minister Roger Douglas, pictured in 1987 before they fell out. Photo / Herald archives

I’m just old enough to remember how companies would change the ingredients of, say, dishwashing liquid to avoid the tax on soap-based products, one of hundreds of silly rules that used to need an army of tax inspectors to keep up with.

If people are struggling to pay for the basics, as many are in these inflationary times, the most sensible answer would be to reduce the tax burden on their income, not our administratively efficient Goods and Services Tax. That’s why governments of all stripes have sensibly left GST alone.

Taking the GST off something is the desperate gamble of a party in opposition or headed for it. Grant Robertson knows that, as does David Parker, and at least until recently, so did Chris Hipkins.

The bigger question is what all this says about the internal state of the Government and whether it is in any shape at all to lead the country after the upcoming election. The Kiri Allan saga has obscured matters, but the public disagreements about tax policy make it clear that Hipkins and two of his most senior colleagues are no longer seeing eye to eye on the direction in which they wish to take the country. Moreover, they are clearly unable to discuss and resolve their differences behind closed doors for the good of their team and the people they govern.

And that is the crucial thing. All governments have policy disagreements. The fact of disagreements is not the problem, it’s how you work to resolve them. You need to take the time to talk things through and hammer out a common position. If all your senior people disagree with you, a wise leader would take a pause. After all, even the Prime Minister doesn’t win all the time. Jim Bolger used to say he only agreed with about 80 per cent of the decisions his own Government made. You also shouldn’t let a minister run and run with a policy idea if you ultimately could just end up closing it down. That’s just building a hill for him or her to die on.

Hipkins, in his obvious desperation to do almost anything at all to hang on to his premiership, is starting to look like a man alone. Through a combination of ministerial mishaps and policy disagreements, his remaining visible supporters are a small bunch of junior ministers and the ever-present campaign chair Megan Woods, who must be starting to wonder what she signed up for.

It is news that the Justice Minister was arrested, but the overall state of the Government is much more consequential for the decision voters will make in the polling booth in less than three months.

Irrespective of your politics or your policy preferences, it is getting harder to believe the current leadership of the Labour Party is in any shape to coherently and competently lead a positive Government after the election. And that, surely, is the pre-eminent test.

Steven Joyce is a former National Minister of Finance and Minister of Transport. He is director at Joyce Advisory.