David Farrar

The week in politics with centre-right blogger David Farrar

David Farrar: Labour's lack of discipline

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Well-known political commentator David Farrar's weekly politics review will appear on nzherald.co.nz each Friday.

John Key and Bill English. Photo / Mark Mitchell
John Key and Bill English. Photo / Mark Mitchell

Logically the Labour Party should be rising in the polls, after last week's Budget. For the first time since the Great Depression, a Government announced spending cuts rather than spending increases in an election year budget.

National also announced changes to KiwiSaver, which will affect a whopping 1.7 million voters. It is hard to think of any other policy change which negatively impacts so many voters in one go. Those 1.7 million voters were told they were going to have their tax credit reduced from $1,000 to $500.

And finally the National Government confirmed that it is budgeting to receive around $7 billion from part-sales of four energy state owned enterprises, plus Air New Zealand. For the last 12 years it has been conventional wisdom that a policy platform of privatisation was about as popular as a policy platform of peodeiktophilia.

So one would expect the only debate to be about how much of a bounce this budget would give Labour - how much would the gap between National and Labour close.

The gap in the last Herald-Digipoll was 15%. Five months ago (before National announced its privatisation plans) National was at 52% and Labour at 37%.

In today's Herald, the first post Budget poll is revealed, and it shows the opposite to what most would expect - the gap has increased from 15% to 21%. National has gone up 2% and Labour has dropped 4%.

Why?

I think a major factor is Labour's inability to run a clear simple message and stick to it. First of all their Finance Spokesperson David Cunliffe said in the Herald pre-Budget:

The budget will be a success if it shows that National has realised it cannot go on as it has: borrowing and splurging on tax cuts for the wealthy, then asking the rest of us to pick up the bill.

It probably didn't help that the Budget did then show a stop to borrowing in four years, and a tax on employer contributions to KiwiSaver which penalises the wealthy the most.

Then the Labour Leader after the Budget said:

Labour leader Phil Goff says middle-income earners are the victims of National's Budget and are becoming "the new working poor".

In his speech in response to the Budget, Mr Goff said those on middle incomes would unfairly bear the brunt of the cuts to Working for Families and KiwiSaver.

"While top income earners have got richer over the last few years, those on middle incomes have become the new working poor.

The problem with this line of attack is that someone on close to the average income of $50,000 is paying $65 a week less tax than in September 2008. So when Labour talks about top income earners having got richer, they assume that Labour thinks an income of $50,000 is rich - especially as in their last term they hiked tax rates on those earning $60,000 or more.

But even though I think it is a weak line of argument, if that was the one they wanted to get across, they should have stuck with it. But instead three days later at the weekend they announced they will put the minimum wage up to $15 an hour and pledged to restore a tax credit for Research and Development by amending the Emissions Trading Scheme.

The timing of the Labour Party Conference to be two days after the Budget was unusual. It was also unusual that for the third year in a row the Finance Spokesperson didn't get to make a main floor speech to conference. Even more unusual was deciding to announce two major policies just after the Budget. This meant the media stopped writing stories about the Budget, and instead wrote stories about how credible were Labour's policies.

Two days after that they launch an online game about asset sales. The game isn't too bad, but why launch it in the middle of all these other messages you are trying to get out. Has Labour not heard of scheduling?
So in the space of one week, Labour has been talking about stopping borrowing, middle income families, the minimum wage, an R&D tax credit, the Emissions Trading Scheme and asset sales. They seem to be like a drunk farmer with a shotgun - firing everywhere hoping something hits.

They need to pick just one or two issues, such as KiwiSaver, and hammer on relentlessly about them. It doesn't guarantee they will go up in the polls, or that the public will necessarily be listening to their message, but it will at least mean they have a clear consistent message should the public wish to hear it.

* A disclosure statement on David Farrar's political views.

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