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Home / New Zealand

John Armstrong: How Jacinda's cunning plan fell apart

NZ Herald
15 Sep, 2017 05:00 PM4 mins to read

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Jacinda Ardern has flunked both the big issues facing NZ, says John Armstrong. Photo / Nick Reed

Jacinda Ardern has flunked both the big issues facing NZ, says John Armstrong. Photo / Nick Reed

Opinion by

Like the sands through the hourglass - it has taken just four short weeks for Jacinda Ardern's "campaign of our lives" to become more akin to the The Days of Our Lives.

Labour's Wonder Woman has found herself cast in a long-running soap opera - but not as a super hero.

The National Party-scripted plot never varies from one election to the next, but the show never fails to draw big ratings.

Once again, Labour has been tripped up over tax policy. The only difference this time is that the major Opposition party has been even more helpful by having a whole range of new taxes in its manifesto.

The puzzle is why alarm bells did not ring at Labour's headquarters given the scale of the free gift.

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But maybe everyone was too consumed with playing the equivalent of Russian roulette by trying to sneak a capital gains tax past voters without them noticing.

The tax was the early product of Ardern's Brave New World - a world where she intends demonstrating Labour can make the hard decisions.

It took precious little time for Labour to back off the idea as fast as decency allowed. "Let's do this" became "Let's not do that".

Much of Ardern's amazing rapport with voters has sprung from her being something of a female version of John Key - approachable, open, down to earth, not judgmental, and arrogance-free.

But there is one major difference between them. She has insisted any government she runs will listen and then act. It will lead, not follow.

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Of particular note has been her declaration that she will not shy away from tackling the "big generational issues".

When it comes to such issues, they do not come any bigger or more vexed than the fairness of the country's tax system and the affordability of current state-funded pension entitlements. With regard to the latter, she has gone Awol.

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She has adopted John Key's pledge to resign as prime minister were the age of eligibility for New Zealand Superannuation to be raised under her watch. Likewise were there to be any reduction in current entitlements enjoyed by those who qualify for the state pension.

For someone portraying themselves as giving voice to younger voters, such a stance is an absolute cop-out. It is little short of betrayal.

Sure, Ardern has made assurances that Labour will restore the annual payments into the New Zealand Superannuation Fund, whose purpose is to meet the shortfall in funding to pay the burgeoning cost of the pension as the population ages.

That might be fine if Labour could guarantee it will be in power for the next 30 to 40 years without interruption.

It can make no such assurance, of course.

Relying on National to feed the fund is optimism at its most hopeless. Despite wallowing in deep surpluses, the ruling party has opted to postpone the resumption of contributions for another three years.

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Ardern's ducking the matter has been completely overshadowed by the U-turn on a capital gains tax, however.

Some would argue she is deserving of huge credit for having tried to speed the implementation of a measure which organisations as unalike as the International Monetary Fund and the Green Party agree is essential.

Ardern and Grant Robertson, Labour's finance spokesman, have sought to downplay the change of mind that will see any such tax subject to receiving a mandate from voters at the 2020 election, rather than being implemented before then.

The mauling that Labour received from National this week was a reminder enough of how politically poisonous such a measure remains.

The attempt to short-circuit the usual process for introducing a reform of such magnitude is likely to prove to be wholly counter-productive.

Who in their right political mind is going to go into bat for the measure at the 2020 election?

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Ardern and Robertson have killed off any chance of a capital gains tax making it on to the statute books for the foreseeable future.

Given the desperate need for such an asset tax to remove the distortions which encourage investment in non-productive sectors like residential property, that is a disaster for the country.

It should also be a big and timely lesson for Labour's leader in the art of the possible. And that substance is exponentially more important than mere style.

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