How the Labour Party is rebuilding after election defeat

Labour leader Chris Hipkins, centre, and from left, Kieran McAnulty, David Parker, Barbara Edmonds, Arena Williams, Willie Jackson and Michael Wood. Composite photo / NZME

With Labour having had just over six months in Opposition after six years in Government, Audrey Young looks at how the party is trying to rebuild.

Despite a pleasing poll result for Labour this week, there is little for the party to celebrate.

The Labour Party has three big issues to settle before it will be in any shape to present itself as a credible alternative government: Leadership, tax and the Treaty of Waitangi.

That’s apart from the obvious hurdle in having to rebuild trust in its ability to deliver on any policy it eventually settles on.

But first, to the leadership and who might be the Labour leader after Chris Hipkins and when.

Hipkins was Prime Minister for only nine months, taking over when Jacinda Ardern did not have the strength to fight a losing battle.

Some believe Hipkins lost the election because of his captain’s calls, he eschewed the possible promise of a wealth tax for removing GST on fruit and vegetables.

Others blame the sense of chaos and disunity created by misdemeanours of ministers Stuart Nash, Michael Wood and Kiri Allan, topped off by the resignation of David Parker as Revenue Minister when he didn’t get his wealth tax.

Whatever the resentment that still exists, the party is suspiciously quiet at the moment.

Peace should not be mistaken for unity. There’s a sense of suppressed tension not unlike a pub just before a bar-room brawl kicks off.

It appears fine on the surface until someone throws the first stool. Then it’s all on.

There are several reasons for the current lull.

First, Hipkins is doing a reasonable job. Second, there is no clear and willing alternative.

And third, the hardliners have made tax policy reform their No 1 priority.

There’s a coterie in the party, David Parker (list), Phil Twyford (Te Atatu), Arena Williams (Manurewa), plus former Mt Roskill MP Michael Wood, who have formed around the reform agenda.

Wood was once seen as a future leader and high-performing minister, until he was forced to resign over failures to disclose conflicts of interest. Incredibly, he lost Mt Roskill to National in the October election.

But he clearly has plans for a comeback.

He led a ticket of five shortly after the election in October for the party’s policy council and they were all elected: Himself, Jo Spratt, Toby Moore, Georgie Dansey and Craig Renney.

Labour’s affiliated union E Tu gave him the high-profile role of speaking for TVNZ workers set to lose their jobs.

And he is back door-knocking in Mt Roskill, perhaps mindful that he would not necessarily get a high list place if Labour locals re-select him for 2026.

The left of the party appears to have more affection for him than the public. In a recent poll about who would be the best mayor of Auckland, Wood scored lowest in terms of net favourability - at minus 9 per cent – although there is no suggestion he will be seeking the mayoralty.

There is little support for him just swanning back into Parliament where he left off because many in the party have not yet forgiven him for the damage he did last year.

He has become a divisive figure in the party.

The people most mentioned as potential leaders are list MP Kieran McAnulty and Mana MP and finance spokeswoman Barbara Edmonds – and possibly a combination – but in limited circumstances.

Those circumstances are following a loss by Labour at the 2026 election or a polling collapse before 2026, similar to the circumstances that brought in Jacinda Ardern.

Arena Williams is occasionally mentioned as a possibility but definitely not in the short term.

When assessing who National would fear the most in terms of drawing votes away from them, it would have to be McAnulty.

He continues to eschew any leadership ambitions, but would be a clear favourite if Hipkins were forced to step aside for whatever reason. Edmonds is popular but it may take a term against the Finance Minister Nicola Willis to toughen her up into contention.

David Parker is respected as the intellectual leader of the party but retail politics is not considered a strength of his. He would be the emergency option.

Of course, Hipkins holding onto the leadership through to the next election is predicated on him accepting and promoting a rewrite of Labour’s tax policy – which he has already foreshadowed he will do – and broader policy reform.

The question is which tax policy? A wealth tax, a capital gains tax, a land tax or something else. The party is about to begin a process to thrash that out with six regional conferences set to take place in late May and June.

The party has a complicated policy process – and includes a high-level platform on which more specific policy manifesto promises are based.

Tax is very much set to be a live debate in the regions, in the various sector policy committees, the policy council, the party conference and the ruling New Zealand Council.

And there are likely to be not just remits to back a particular tax but remits for greater specificity in the platform statement as well.

Currently, the policy platform currently says: “Labour will continue to use and improve the income tax system as a vital tool to provide all New Zealanders with adequate resources, and to reduce income inequality.

“Labour supports a tax system that promotes an economy based on productive enterprise rather than speculation, that ensures greater fairness and looks closely at targeting untaxed wealth in the wider economy.”

Some are expecting the tax debate to be settled by the end of the party conference in November this year and others see it continuing to the party conference next year.

A capital gains tax has been Labour policy before, and NZ is an outlier in not having one.

It is likely to be easier for Hipkins to sell than a wealth tax which few countries have and which he opposed in 2023. But the trouble is that it brings in little revenue in the early years, assuming the family home remains off limits.

A wealth tax would give an immediate income stream that could be used to give tax-breaks to low and middle-income earners.

The policy gurus in the party will also be mindful of repeating policies full of vision and transformation without showing how they will achieve it.

Practical means of delivery will be more important than grand statements.

Craig Renney, the economist for the Council of Trade Unions and former adviser to Grant Robertson, is likely to play an important role on the party’s policy council in shaping up a credible broader economic policy.

He is also seen as a potential party candidate in 2026 although as a Pakeha male, would have a clear disadvantage in any list ranking process.

There are occasional suggestions that the old guard such as Parker, Damien O’Connor and Willie Jackson should be moving on to allow for rejuvenation.

But all three are important in the wider debate about what the party stands for and whether identity politics is killing off its working-class support base.

Jackson is also set to play an important role in shaping the party’s direction over Treaty of Waitangi. It is a more difficult debate to have than the tax debate.

The party can’t just pitch up with the same policies it had in Government and accuse the current Government of advancing a racist agenda. That is best left to Te Pati Māori.

Nor can it renounce all that it did. Labour depends on support from Pakeha and Māori – and in terms of the party vote, was overwhelmingly ahead of Te Pati Māori in the Māori electorates.

Labour needs to be able to stand apart from Te Pati Māori with pride, not guilt.

There is a school in the party who believe former Prime Minister Helen Clark is right in pointing out that when Labour and National have a common agenda on Māori policy, the centre shifts and progress is made.

Hipkins has so far construed Labour’s record on the Treaty in the past six years as a political management problem, rather than a policy problem of having gone too far.

There will be issues arising this term that indicate whether Labour is willing to work with National, for example on the promised review of the Waitangi Tribunal.

After 50 years, it is not an unreasonable thing to do. It is the sort of thing in which National should be involving Labour.

And as Labour formulates its policy for 2026, will it simply resurrect the concept of a Māori health authority or look at other measures to close gaps?

Will it reassess its aversion to setting targets?

Importantly, where there is a real gap in the political landscape is for a leader to explain what partnership actually means in real terms in modern-day NZ, and what tino rangatiratanga means and how they are compatible.