OPINION
It’s a great time to be in Government.
The new administration is in the sweet spot of knowing exactly how “bad” things are, and having every incentive to transmit those bad vibes to the public.
Usually, these two things do not go together. Ministers who know things are bad, generally do their utmost to ensure the public never find out about it.
But the new Government is in the sweet spot of still sort-of being the Opposition - only now it’s an Opposition with the ability to ask every public servant from Molesworth St to Kent Tce to nark on their former bosses.
Every Government does this. Labour commissioned and published reviews into the dire state of New Zealand’s infrastructure, the meth house testing debacle, and Waka Kotahi’s (pardon, NZTA) lax regulation of WoFs leading to death.
They dismantled the public image of the Key-English administration (an image strong enough to trounce the combined efforts of both Labour and the Greens at the 2017 election), painting them to be cheap and heartless, and whose neglect of public services was, in some cases, deadly.
“Nine years of neglect,” Labour ministers would crow in the House - a call almost always answered by a chorus of “NINE LONG YEARS”.
Now it’s National’s turn.
The new regime is building a story about the former Government. Almost repaying in kind, National’s pastiche of the former Labour Government is that they were negligent spendthrifts (a riposte to the negligent tightarses slander levelled by Labour at National).
In the House this week, Finance Minister Nicola Willis slammed Labour for allowing inflation to stay above the 1-3 per cent target band for three years - “three long years”, Willis howled - her cadence ringing with venom, the exact mirror of the “‘x’ long years” charge Grant Robertson once levelled from the very same chair.
The new Government’s job is to stave off any sense of buyers’ remorse on the part of the public by trying to prove conclusively that the outgoing regime was utterly dreadful. They are going to extreme lengths to do this. In Opposition, Prime Minister Christopher Luxon has said that Grant Robertson is the worst finance minister in history (a hyperbole; to National’s embarrassment, the worst finance minister in history is probably its own Robert Muldoon).
Now, they’ve got to come up with the goods. Willis is going on a hunting exercise through the estimates looking for what she calls “fiscal cliffs”.
This is her name for initiatives that have been given time-limited funding despite the fact they appear to be permanent - things like an increase in Pharmac funding, the apprenticeship boost scheme, and the school lunches programme.
Labour argues that in most cases, the fact these initiatives only received funding for a few years was very well telegraphed - so much so both National and Labour included more funding for them in their election fiscal plans.
Willis says these big initiatives only scratch the surface and in continuing to ask Treasury to discover more “cliffs”, evidence at least some of them may have been hidden.
She has an uphill mountain to climb. Unlike the former Labour Government’s sunshine-and-rainbows mini-budget of December 2017, which boosted family incomes, and created new universal benefits like the best start and winter energy payments, Willis’ budget looks to primarily be one of cuts.
She has to get the ball rolling on promised cuts of 6.5 per cent to ministry backrooms. National is also going to be responsible for following through on Labour’s promised 2 per cent cuts to the same backrooms, announced in August. The Prefu noted the final decisions on these savings would be made “early 2024″.
National also needs to implement its changes to the way benefits are calculated because these trigger in April 1 next year, before the actual Budget. It doesn’t have to put these in the mini-Budget, but they will need to be legislated before April 1.
It fiercely disputes that these are “cuts”, because benefit rates will still be adjusted upwards, however the fact remains that National will book $2 billion in savings by paying beneficiaries less money than they would currently be getting.
Then there’s the issue of timing ... December 20, one day after the December 19 anniversary of the Fourth National Government’s “Economic and Social Initiative” - the official name for then-Finance Minister Ruth Richardson’s dramatic benefit cuts, often erroneously remembered as the “Mother of All Budgets”.
It’s doesn’t exactly radiate Christmas spirit - except perhaps among those whose New Year’s resolution is to next year squeeze a camel through the eye of a needle.
The only way National can get away with the caper is to conclusively prove there is no other way, and that the grim reality of the books requires significant cuts to the level of spending. The jury return on December 20.
Willis needs to be on the top of her game. She made a rare error in her first days in the job, including the U-turn on the previous Government’s smokefree policy as a revenue positive measure to offset the now-axed foreign buyers’ tax.
This gave Labour plenty of ammunition to argue National was using smoking to plug a hole in its tax policy, when the real cause of the U-turn was the fact NZ First and Act won in coalition talks.
It would help if the new Government learned a bit of message discipline. The three parties have a mandate to tackle inflation, but the first two weeks in office have been dominated by petty culture war skirmishes, mainly related to Māori and the use of the Māori language.
It’s not too much Māori chasing too few goods that is the textbook cause of inflation, but too much money - the zeal with which the new Government has prosecuted the former has muddied the Government’s message, giving the sense that prescription glasses or a large print edition of Milton Friedman might set them straight.
Somewhat paradoxically, it’s also a great time to be in Opposition.
Labour’s frontbench is in the rare position of knowing more about the running of the country than the team currently in charge.
Robertson and Labour leader Chris Hipkins had great fun with that in Question Time this week, turning it into a pop quiz for the new administration. Hipkins wrongfooted Luxon on his knowledge of the difference between a “sustained humanitarian truce” and a “ceasefire”. Luxon had to be saved by a helpful supplementary question from his deputy, Winston Peters. It was a quiet moment, but it left Luxon looking very much the junior.
Robertson pulled a similar trick, asking Willis to name a debt figure from the Prefu forecast, which she could not.
On its own, the two moments were insignificant - a shot across the bow. They did however achieve the goal of gently humiliating the National front bench in front of their own MPs, and giving much-needed succour to the utterly demoralised Labour ranks.
One-term governments are vanishingly rare in New Zealand and there has never been a one-term National government.
Yet both sides would do well to remember we very nearly had a one-term government in 2020, when polling showed Simon Bridges’ pre-Covid National Party in a position to beat Labour.
Both parties need to capitalise on their current positions to repeat, or avoid repeating, that fate. For Labour, it’s taking a leaf out of Bridges’ book and beginning a relentless demolition of the new Government from day one; for National, it’s arguing Labour are so spendthrift they shouldn’t be allowed within cooee of the Treasury.
The clock is ticking. With each passing day, whatever is wrong with the Government becomes more and more National’s fault, and Labour’s frontbench, some of whom are eyeing retirement, loses its insiders’ advantage.
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