Online exclusive analysis:
Saturday
The Act and Green parties both held their annual conference this weekend. A year ago, the parties were both polling about 10%. Now Act is consistently around 13 per cent while the Greens have slipped to 8 per cent. There’s not much mystery to Act’s success: they have a very effective leader and nearly unlimited money. But why aren’t the Greens doing better? You’d think that the departure of Jacinda Ardern, followed by Labour’s dramatic lunge for the centre, alongside the increase in extreme weather events and climate-related news would see a surge of support for the Greens. What’s gone wrong?
There is the traditional curse of being a minor party in an MMP government: you’re nominally in power but can’t really do anything except complain about how powerless you are. One of their MPs stood down after accusations of bullying. And they’re competing for different cohorts of voters with Labour, Te Pāti Māori and TOP. When you’re a small party losing 10,000 votes here and another 10,000 there quickly adds up.
Monday
A review into the dawn raids carried out by Immigration New Zealand in 2023 criticised the “hollow” apology Dame Jacinda Ardern made to the Pacific community for the historic raids conducted against Pacific peoples living in New Zealand in the 1970s. The review noted that there “does not appear to have been an attempt to implement the principles of the government’s apology or alter out-of-hours visits in light of it”.
Ardern’s domestic legacy has taken a few hits in recent weeks: she seems to have bequeathed her successor a caucus with little discipline but many scandals, while a recent Herald investigation found that an ambitious life-skills education policy she campaigned on in 2017 only resulted in the creation of a toolkit on a website. These resonate with long-standing critiques of Ardern and Ardernism: that her government presented itself as principled and aspirational but was often deeply cynical, consisting of a sequence of brilliantly conceived public relations campaigns with little substance or conviction behind them.
The counter-argument to all this is that Ardern wasn’t the minister of immigration, or education. Nor was it her job to run around the Beehive checking if her MPs were filling in disclosure forms correctly. Her job was to lead: to set the vision and goals for her government; to win election campaigns and bring the nation along with them while her caucus implemented that vision. From this perspective Ardern more than delivered, but her leadership and the political capital it purchased were resources the rest of her party squandered.
Tuesday
The Prime Minister has spent the week in Europe, signing our free trade deal with the European Union on Monday and attending a NATO summit in Lithuania. His scheduled meeting with Volodymyr Zelenskyy was bumped because the Ukraine leader’s meeting with US President Joe Biden ran over time, but RNZ reported that they met in a corridor, quoting Zelenskyy as saying: “Thanks again [inaudible] but I already have dialogue with you and thanks to your [inaudible] your society for supporting Ukraine.”
A new poll from Talbot Mills shows a significant Labour crash. Statisticians grumble about pundits who comment on individual polls – “what matters is the trend!” – but everyone scrambled to pontificate on this one. It feels right, for a number of reasons: the government has had internal problems – Michael Wood, Kiri Allen, etc; National are spending a fortune on advertising. The fuel excise and diesel road user charge subsidies have ended – which is good for the country because it was a terrible policy, but probably bad for the government because it was very popular with voters. There’s been a torrent of crime stories, many of them gang-related, and the opposition has worked hard to paint Labour as pro-gang – a message both the gangs and the Prime Minister’s science advisor have worked hard to reinforce.
On top of all this, Labour has not begun to make a case for itself and what a third-term Labour government would look like. They’ve ruled a lot of things out, and they’ve run a very effective negative campaign against National leader Christopher Luxon, painting him as a fearsome religious lunatic who wants to turn New Zealand into Gilead. But they have little to say about their own leader, other than that he likes sausage rolls. The visionary leadership thing that Jacinda Ardern brought to her party – cynically or not – is completely absent. A vote for Labour is merely a vote for the status quo, and the status quo – crime, inflation, recession – is hardly appealing.
Wednesday
The Reserve Bank left the official cash rate fixed at 5.5 per cent and indicated that it will remain there for some time, estimating that inflation will be back in their target band of 0-3 per cent by mid-2024. Many economic commentators think we’ll either experience a double-dip recession or just stay in an economic slump for the rest of the year as mortgages roll over and the higher interest rates suck more and more money out of the economy.
A massive release of policy documents revealed that the government was considering some very radical ideas for tax reform in the lead-up to this year’s budget, including a tax-free threshold of $10,000 and two different forms of wealth tax. They decided against them, and on Wednesday Chris Hipkins announced that he was ruling out any form of wealth tax or capital gains tax. “End of story,” he said.
The average salary in New Zealand is $70,000. Workers earning this much will pay $14,020 in tax. But if you make $70,000 – or $700,000, or $7 million – selling property or shares or cryptocurrency you’ll pay no tax. When Sam Morgan sold Trade Me for $700 million he paid zero tax on the transaction. This doesn’t make any sense and no other OECD nation exempts capital from its tax system the way we do. The Treasury documents show that this isn’t sustainable – the government can’t simply rely on inflation to keep pushing more and more workers into higher tax rates.
The Herald’s deputy political editor Thomas Coughlan has an in depth look at the government’s policy process and the politics around it, including the observation that you can give most of the population gigantic tax breaks by imposing moderate wealth taxes on a small group (25,000) of very wealthy people, and the hideously bleak insight that the proposed policy is said to have focus-grouped incredibly poorly. Te Pāti Māori and the Greens have indicated that a wealth tax is still “on the table” during coalition negotiations. A Reid Research poll back in 2022 found that 54.7 per cent of voters supported a capital gains tax.
Thursday
Statistics reported a net migration loss of 13,400 people to Australia last year: the highest since 2013. And a Taxpayers’ Union – Curia poll found a record 64.5 per cent think the country is heading in the wrong direction. Their party support results indicate a hung parliament. The regulated period for the election campaign begins tomorrow.
