Heather du Plessis-Allan: Labour is in a pickle over economy

OPINION

With only four and a half months to run to the election, you can fairly confidently predict the economy is going to play a major role.

There’s just not enough time for things to improve. Prices are high now. They’ll be high in October. Mortgage repayments are high now. They’ll be high in October. Good luck getting a pay rise that covers all that off between now and then.

Which isn’t great for Labour. It’s always at a political disadvantage on the economy. Historically, voters have preferred National as the ones to sort out a financial mess.

That’s not always fair on Labour, especially given the hard yakka Michael Cullen put into paying down Crown debt in the Clark Government.

But sometimes it is fair. And it will be fair this year.

In the last two weeks Labour’s made a hash of convincing voters it understands how grindingly hard the cost-of-living crisis is.

Megan Woods’ five tips to “Find money in weird places” was so tone-deaf it belonged in an AmDram opera.

Kiwis are beyond being told to unplug appliances to save on electricity costs. They’ve been dealing with soaring inflation for two years now. The people who are falling behind on their mortgage repayments or taking on two jobs over six days to feed the kids have already turned the hot water off on the washing machine. Telling them to find money in places they’ve already exhausted is not just pointless, it’s insulting.

At best, turning off appliances and cutting showers short will save an estimated $550 a year. Sure, that’ll help, but when the official cash rate is 22 times higher than it was a year and a half ago, the problem is way bigger than something that can be fixed with 10 bucks a week.

The Budget didn’t do anything to reassure Kiwis that Labour fully understands what real life in 2023 is like. A $5 discount on antibiotics screams “out of touch”.

It says a lot that the major party that benefited from the Budget in this week’s poll was National. It went up 3 per cent. Labour dropped 1 per cent in the TVNZ- Kantar poll. Chris Hipkins fell 2 per cent.

In hindsight, the smarter thing might’ve been to cut some unnecessary spending like a $140 million handout to buy a new furnace for a profitable international business and instead use that to help struggling Kiwis out.

Yes, it might have pushed up inflation some more. And yes, commentators might’ve wailed over that. But at least Kiwis would’ve had pressure relieved and might have felt Labour is listening.

Now, Labour’s in a pickle. Because anything they announce from hereon in might look cynical.

It’s technically smart politics to save up $5 billion to dole out in the run-up to the election. But it looks awful. It looks like making struggling voters wait months for help just so Labour can win the election.

For the voters who care about fiscal policy fuelling inflation, they’ll understand $5b of promises is inflationary whether it was announced last week or in the 20 weeks between now and the election. They’ll be even more cynical.

The saving grace for Labour is that they haven’t been blamed for the Budget hiking mortgage rates. The Reserve Bank Governor bent over backwards to assure us all the Government wasn’t making inflation worse.

But in reality it means nothing to struggling families because he pushed up the OCR anyway, which pushed up mortgage rates.

So, life is more expensive than it was last week, or it will be when those mortgages roll over. Which means those people who’ve already turned off the hot water to the washing machine will be even more desperate come October.