OPINION:
Thursday night’s poll was a cold draft on the back of Labour’s neck after an otherwise good week for the party.
For Finance Minister Grant Robertson, the only poll that had really mattered this week was a poll of one: Reserve Bank Governor Adrian Orr.
Poor old Orr had – once again – found himself in the role of Caesar in the political stoush over whether the Budget was an outrageous Inflationary Armageddon that would drive interest rates up as National claimed – or whether Robertson had been true to his word and been restrained enough to see things stabilise.
Orr came back with a wobbly thumbs up on Robertson’s side. The OCR did bump up again but Orr made it clear that it was a borderline call, done for the sake of being extra-certain inflation would keep easing. He also said it was likely to be the last bump, although a drop would be some time away.
And – music to Robertson’s ear – he made it clear the Budget had done enough to restrain government spending to keep inflation tracking down. He even said that it was ”more of a friend than foe to monetary policy”.
His economic credibility intact, Robertson will be loading Orr’s press conference on his calming sleep app as we speak.
However, the initial response from the voters was less calming.
The immediate verdict to the Budget was a one-point drop for Labour and a three-point bump for National in the 1 News Kantar Public poll. National overtook Labour again for the first time since Chris Hipkins took over as Prime Minister.
It is not enough to panic Labour. It is enough to give heart to National that is on the right track.
The impact of the poll on the Herald’s poll of polls was to increase the likelihood of a hung Parliament: 60 seats on each side.
That’s how close it is at the moment and that means it will be a drag-race election.
It is now at the point when parties have to decide just how far they are willing to go to be the one that gets its nose over the line.
At the moment, we are at the mini-skirmish part. Both sides are leaping on minor slip-ups and trying to turn them into big deals: the hoopla around Megan Woods launching a power-saving campaign on the same day the OCR went up is a case in point. As is Labour’s lob at National over National’s immediate move to say it would reinstate prescription charges, and then refine that to say it would target them. They are short-lived and of little consequence.
But from now on things started getting serious.
In 2020, Labour could have had a cornerstone policy of making every voter blow a green kazoo to start the day and it would still have won. We are now back in MMP-reality land.
Drag-race elections risk pushing parties to lengths they might not normally go to.
This time, both parties will be gunning hard to dent their opponents’ credibility and to offer something that will get them over the line.
Both campaigns will be a combination of attack and promise.
We are already seeing the signs National has turned its mind to the measures it thinks will deliver the votes it needs for the election.
The starkest this week was leader Christopher Luxon’s clear signal of a u-turn on National’s support for housing densification in suburbs. It will make a mockery of all the fanfare National made about its bipartisanship on affordable housing at the time it signed up for it in October 2021 – an agreement with Labour brokered by Nicola Willis.
National doesn’t care – it is too unpopular in National seats and in seats it wants to win back, especially in Auckland. So out it goes – and it can now blame Labour for it all.
Earlier, on the attack side, there was the rule-out of Te Pāti Māori and the associated claim about the “coalition of chaos” of Labour, the Greens and Te Pāti Māori. There are the relentless repeats of the “addicted to spending” line and “soft on crime” line.
The other significant move on National’s part this week was Willis saying National would now release the costings of its tax cuts plan – and other policies – earlier than it had proposed to.
The party had intended to wait until Treasury’s pre-election fiscal update to do that. It will now move earlier.
That happened after the Council of Trade Unions economist Craig Renney released his calculations on how much more National’s tax cuts would cost now than when they first promised it, and as Labour’s Grant Robertson ramped up his questioning of just how National would fund those tax cuts. Robertson and Renney will be rubbing their hands with glee at forcing National to move early: it was they who discovered the “fiscal hole” in National’s 2020 books, after it failed to update one of its figures following the pre-election fiscal update.
However, whatever the games around it, National’s tax cuts policy is the biggest problem Labour will have to deal with in the election.
Labour, meanwhile, is still playing a mysterious game on whether it will offer tax cuts or not.
It would blunt National’s criticism that Labour has so far offered little to working people in its cost of living moves. It’s an argument Labour can’t afford to brush off.
Working people might have hoped for more in the Budget, and what help there is – the fuel tax cuts and half-price public transport – is about to end.
Labour has sent mixed messages on tax cuts.
Hipkins has said tax cuts would be nice “eventually” - and claims most people realise that and don’t want them now.
National is relying on people very much wanting those tax cuts now after a long drought – even if it won’t say so out loud.
Labour is not completely deaf to that. It would not be a surprise if “eventually” turned out to be 2024 and Labour came up with its own tax cuts promise – the interest will be in how much it offers and how it offsets the cost of them.
It’s not the first time Labour has talked about tax cuts in the future – it did that in the 2000s too. It promised jam tomorrow then – the trouble is it never gets around to dispensing it because people got sick of waiting and National was offering jam today.
Labour will set out some of its pitch this weekend at its Congress, but that won’t be a tax cuts promise.
No big policy announcement is expected: it is too soon after the Budget and too far from the election for that. Instead there will be a social development policy and an education policy from Hipkins tomorrow.
In the meantime, Labour – and Hipkins – are expected to show us more of the attack side of their plan at the Congress. Former Prime Minister Jacinda Ardern stuck fairly religiously to her “relentlessly positive” creed through her time as leader. Hipkins has no such qualms about taking it to the rival.
Buckle up for the ride.
Luxon on the first year of his Government and how his relationship with co-leaders differs.