In October 2020, the Labour Party and its leader Jacinda Ardern were so popular they broke the electoral system. MMP was designed to prevent the formation of majority governments; to impose coalitions and compromises on our political leaders. But in 2020, New Zealand had a world-beating Covid response and a prime minister who’d become a global icon. Ardern symbolised a new, kinder approach to politics. The economy was strong and the National Party was weak: it spent that election year tearing itself to pieces, churning through leaders until they settled on one of its most divisive politicians: Judith Collins. A Roy Morgan poll in November 2020 found that 70% of the population thought the country was heading in the right direction.
When Ardern resigned just two years and two months later, her party averaged 30% across the publicly available polls: it had lost over half a million votes. Chris Hipkins replaced Ardern – the leadership contest was unopposed – and immediately announced a policy bonfire. He dumped (or in the case of Three Waters, rebranded) much of his own party’s legislative agenda. But this wasn’t enough. When the nation went to the polls last week, only 26.9% cast their vote for Labour, who lost an astonishing 28 seats on the provisional results, nearly halving its number in Parliament.
National has pledged to hold a larger policy bonfire post-election. The water reform programme will be further amended. The Māori Health Authority and fair pay agreements will go. National will unwind Te Pūkenga, Hipkins’ struggling mega-polytechnic. It will scrap the 20 hours of free early childhood education for 2-year-olds and the public transport subsidies. It will cancel Auckland light rail and withdraw from Let’s Get Wellington Moving. Much of the current government’s work over the past 6 years will be undone by its successor, and National hopes to accomplish much of this rollback in its first 100 days.
Rolling back
This is not how New Zealand politics usually works. John Key’s government entrenched most of Labour’s accomplishments under Helen Clark and the Ardern government was hardly going to dig up National’s roads, or ultra-fast broadband, or renationalise the power companies.
In his concession speech on election night, Hipkins told his party, “When the tide comes in big it almost invariably goes out big as well.” But why did support for our most popular government, led by our most beloved politician, decline so quickly? And why is its policy legacy so fragile?
Dr Lara Greaves, an associate professor of political science at Victoria University of Wellington, has spent the past few weeks trying to explain the state of New Zealand politics to international media, who find it incomprehensible that Ardern’s popularity was low when she stood down, and that her party was set to lose the election.
“Ardern was such a darling of the international media. It’s hard for them to understand why we’ve rejected this person that they loved.”
Greaves’ first point is that the 2020 election result and Ardern’s spectacular popularity during the early Covid era were anomalies. “If you look back at the 2017 election, in a way, National won it. They had the higher vote share. Ardern became prime minister because of MMP.
“And going into 2020, Labour was consistently behind in the polls – it gained 10 points between January and the election in mid-October.”
So, for Greaves, an important part of Labour’s decline was merely a “return to baseline”. In the 8 MMP elections before 2020, Labour averaged 34% of the vote. Greaves would have expected them to fall back to the mid-30s: roughly what they achieved in 2017. “But they’ve gone way past that now,” a fall she partly attributes to Labour’s infamous failure to deliver.
In January 2019, Ardern promised “a year of delivery’'. Labour would begin to deliver on KiwiBuild, flooding the housing market with affordable homes. It would address the recommendations of the Tax Working Group, which was expected to endorse a capital gains tax, and introduce the Zero Carbon Act, a comprehensive framework for decarbonising the economy. And it would usher in the world’s first Wellbeing Budget, prioritising mental health and child wellbeing.
But the Zero Carbon Act is now the only accomplishment left standing, and that was pushed through by Green Party co-leader James Shaw. There was no tax reform; KiwiBuild was an expensive failure. Most of the $1.9 billion on mental health funding was absorbed into the wider health system, delivering few measurable outcomes other than a collection of downloadable apps.
In 2022, the Mental Health Foundation argued that Labour’s transformation of the sector had failed completely, and that public care for mental health was getting worse. By March 2023, most of the $500 million set aside to upgrade mental health facilities still sat in the Crown accounts, untouched.
The first Wellbeing Budget allocated Oranga Tamariki $1.1 billion to transform the organisation. Over the next 3 years, the ministry saw a 30% jump in the number of managers, legal, HR and finance professionals, while the number of social workers barely shifted and the number of policy advisers declined. A 2022 Treasury report found that, despite the growing number of executives, the department was poorly managed, “not governed by a clear organisational strategy”, and that the “cost per child has increased significantly in the past 2 years with no clear explanation” and no measurable improvement in outcomes. A year later, a review into Oranga Tamariki’s youth care facilities, headed by former police commissioner Mike Bush, generated 28 police complaints over staff conduct, and found that the organisation was bureaucratic and mismanaged, leading to “a constant environment of chaos and confusion”, in which the staff and facilities delivering youth services were consistently underfunded.
Over the past 6 years, much of the public service saw a similar trend: rapid rises in the numbers of senior managers, lawyers, consultants and communications staff accompanied by a degradation in performance and an increase in costs.
During 2019, Wellington saw significant volumes of sewage bubbling up from beneath its streets as its ageing pipes corroded. The stench of failed delivery – Dunedin Hospital, Auckland light rail, higher housing costs, longer waits for surgery, doctors and emergency care, rising crime – hung about the Beehive as multiple policy failures seeped through the cracks of the government’s sophisticated communications apparatus. Even the celebrated Covid response saw Ardern promise that New Zealand would be at “the front of the queue” for vaccines; then it delivered one of the slowest vaccine rollouts in the OECD due to the government’s failure to negotiate early purchase agreements with suppliers.
Labour Party insiders are not eager to go on record criticising their own government, but in the background they seethe about the inability to deliver in areas like health and transport. They’re especially bitter about the lack of progress on fair pay agreements – the sector-wide bargaining framework that would negotiate basic levels of pay and conditions in low-wage sectors. How could Labour have felt such a lack of urgency around labour market reform?
The wrong direction
David Farrar is the founder of Wellington-based market research company Curia, whose most significant client is the National Party. For the past 20 years, it’s been his job to read the mood of the nation, analyse what we’re thinking and why – then use this knowledge to help National win elections.
Farrar’s company regularly polls the electorate, asking randomly selected respondents who they’ll vote for. They’re also asked whether they think the country is headed in the right direction. “It’s a measurement that often tells you which way government support will go,” he says. “If people think the future looks good they’ll generally vote for the status quo.”
He argues that the mood turned darker in Auckland in 2021 during the city’s extended lockdown, and this spread to the rest of the nation in early 2022 with the protests against vaccine mandates and the occupation of Parliament.
“Only 5-7% of the population really bought into the hard-core anti-vax conspiracy theories,” he says. “But the number of people who didn’t want to get vaccinated but did so because of the mandates was surprisingly high. Ardern’s politics were supposed to be about empathy and the people protesting against the mandates were losing their jobs, and there was just no empathy for them at all.”
The parliamentary occupation ended with a violent riot. Four weeks later, the government suspended the mandates against unvaccinated workers in businesses requiring vaccine passes.
Farrar adds that early 2022 is when the cost of living surged. Prices had crept upwards throughout 2021 – a consequence of disrupted supply chains due to Covid and the Reserve Bank’s policy of quantitative easing. Yearly inflation was already close to 6% when Russia invaded Ukraine in late February, resulting in a surge in global oil prices.
Pandemic and Putin
Many swing voters “vote the economy” – rewarding the government when times are good and punishing them during downturns. For a long time, the government resisted suggestions that the economy was bad: it had roared back into life after the Covid lockdowns with high growth and low unemployment. Inflation was high but it could hardly be blamed for that: it was the pandemic and Putin. And the Reserve Bank believed high inflation was temporary, predicting in its February monetary policy statement that it would ease back to the bank’s long-term target of 1-3% by 2025.
But real wages had fallen; people couldn’t afford their petrol or grocery bills. In a 2022 study of US polling data, the research firm Ipsos found inflation alone accounted for a 13-point difference in approval ratings between low-inflation and high-inflation governments. By June this year, inflation was still at 6% and the bank’s interest rate hikes were delivering higher mortgage costs and slower growth. Curia’s polling found only 24% thought the country was heading in the right direction.
The legacy of sand
There were other factors behind the government’s decline. The rise in violent and property crime, the rapid succession of ministerial scandals and resignations this year. The lack of a positive vision for the campaign. None of that accounts for the frailty of its policy legacy.
Political scientist Greaves: “One of the first things I teach students about the history of New Zealand politics – especially in the 20th century with the first and fourth Labour governments – is that Labour changes things and National leaves them in place. But it looks like that’ll be different this time around.”
Farrar’s explanation for this is simple: Labour’s policies weren’t very popular. You might expect him to say that but some Labour insiders agree. Three Waters is the starkest example of a high-profile policy that became a political liability. It was controversial for a number of reasons: the lack of consultation, the mandatory transfer of council-owned infrastructure into infrastructure mega entities, the attempt to break with constitutional convention and entrench the policy in law, the enormous cost of the project and the incredible amounts paid to contractors and consultants delivering it.
But the most divisive element was co-governance. Neither Ardern, her then local government minister Nanaia Mahuta, nor anyone else in Labour explained what this was or how it would work. It created an information vacuum which the government’s rivals – from National and Act to the Groundswell movement – were happy to fill.
Some of the government’s proudest achievements were crisis management: Whakaari / White Island, the March 15 mosque attacks; the Covid response saving an estimated 20,000 lives – this will always be seen as the finest moment for Ardern and her Covid minister and successor, Hipkins. The government also reformed abortion law, built state houses, created a new public holiday, extended sick leave, delivered a Best Start payment for new parents and a winter energy payment for beneficiary and low-income households.
“Christopher Luxon is the least popular new prime minister we’ve seen,” says Greaves. “So his scope to abolish policies that are popular with the public is limited.”
But there is much that was unpopular and most of that will go. Greaves suggests there was a failure of ideological cohesion within the Ardern-Hipkins government: it lacked a clear understanding of what it wanted to achieve. Labour didn’t think it would win in 2017 before Andrew Little’s resignation and the rise of Ardern. Maybe the Cabinet wasn’t ready?
But Greaves also suspects a tension within the party. “Does it want to be a reforming, transformational party like it was in the 20th century? Or does it want to be more like National, enjoying long terms in government where it doesn’t change all that much?”
The Clark government of the early 2000s found a compromise between those goals. But it was the only Labour government to win a third term since Peter Fraser in 1946. The tide has gone out for Labour before but never with such strength and speed – and it leaves very little behind.
