National’s failure to secure a two-party government with Act is down to Christopher Luxon making two sets of disastrous captain’s calls. Photo / George Heard
National’s failure to secure a two-party government with Act is down to Christopher Luxon making two sets of disastrous captain’s calls. Photo / George Heard
Opinion by Matthew Hooton
Matthew Hooton has more than 30 years’ experience in political and corporate strategy, including the National and Act parties.
For those wanting more about the failure of the Ardern-Hipkins regime, from Sunday you’ll need to try the history section.
There, future generations will study the 2017-23 tragicomedy, when New Zealand’s Government resembled a daycare centre run by its toddlers and its worst 4-year-old bully during Covid.
Yet, braceyourself: the next Government will be even worse.
That’s certain if someone like Helen Clark negotiates détente between Winston Peters and Chris Hipkins, for a Labour-NZ First Government supported at a distance by the Greens and Te Pāti Māori.
It’s also likely of the expected result, a National-led Government requiring both Act and NZ First to back it.
New Zealand First strategists plan to seek a National-NZ First Government, with Act off to the side.
Winston Peters has his eye on again being Deputy Prime Minister and Treasurer, as he was in the Bolger-Shipley Government through the 1997-98 Asian Economic Crisis — at least until it got too hard.
Shane Jones again wants a powerful economic role, including something like the Provincial Growth Fund, but less encumbered by Wellington bureaucrats.
Peters may seek re-election in 2026 when he will be 81, but will eventually need to manage the leadership transition to Jones.
Only if NZ First outlives him will history record some meaningful legacy from his five decades in politics.
Act’s David Seymour makes the same point explicitly, that his first obligation to his supporters is that there is a classical-liberal Act Party to vote for when he’s in a rocking chair at Grace Joel.
The stability of the incoming Government will thus depend on neither NZ First nor Act slipping below 5 per cent in the polls.
If either senses that remaining loyal to Christopher Luxon’s Government represents an existential threat, they’ll need to walk out.
Arguing that bringing a government down would be electoral suicide doesn’t mean much if they are terminal anyway, and the assumption could be wrong.
NZ First forcing new elections over foreigners being allowed to buy New Zealand homes, or Act refusing to support reckless borrowing, would provide a reasonable platform to get back in.
As everyone from NZME’s Mike Hosking to the wokest left-wing blog has already said, Luxon has no one to blame but himself for the shambles that is about to unfold.
National’s failure to secure a two-party government with Act is down to Luxon making two sets of disastrous captain’s calls.
The first was tax cuts, which Luxon insisted on promising in March 2022. His then-finance spokesman, Simon Bridges, was barely consulted. Nine days later, Bridges announced his retirement from Parliament.
Even in March 2022, with net core Crown debt already forecast to hit nearly $158 billion or 40 per cent of GDP, Luxon’s tax-cut call seemed eccentric.
But back then, he had the excuse of not knowing annual inflation was already 6.9 per cent, the worst since the 1990 economic crisis.
No such excuse was possible this August, with Labour’s borrowing, debt and inflation all clearly out of control. Promising to cut tax and increase Working for Families and other handouts was economically insane, but also politically unnecessary. Voters had no serious expectation of tax cuts and handouts in the midst of a fiscal crisis. National would have sleepwalked to victory without them.
Luxon’s call was to promise them anyway. But precisely because they were so fiscally unviable, fantasy revenue measures had to be invented, with casino and property-industry lobbyists keen to lend a hand.
National’s tax plan was clearly unviable as soon as Luxon unveiled it. An extra $20b of foreign demand would obviously fuel house-price inflation. Or, if the foreign buyers didn’t show up, Luxon’s tax cuts would widen the fiscal deficit, fuelling general inflation.
Either scenario meant even higher interest rates.
National’s finance spokesperson, Nicola Willis, could have walked back Luxon’s plan. He could have avoided having to admit later that only one household in 560 would get the full $250 a fortnight that was leading National’s advertising.
Instead, Luxon decided to double down, smearing the country’s most reputable economists in the process.
He damaged National’s economic credibility, contributing to its fall in the polls, but NZ First and Act will stop the plan anyway. The whole shemozzle achieved nothing.
Even more cataclysmic were Luxon’s captain’s calls about Peters.
When Hipkins ruled out Peters in August, NZ First was still below 5 per cent in most polls. Luxon could then have done the same as Hipkins, or the opposite, casually saying he’d call Peters only if he had to. Either would have made NZ First irrelevant.
Instead, Luxon left the question open, drawing attention to Peters and helping NZ First rise in the polls. Most inexplicably, just as voters were beginning to turn their attention to the campaign, Luxon issued a high-profile video message ruling Peters in.
Since then, National has been all over the place on NZ First, raising the possibility of new elections, or a Labour-NZ First regime. That has made NZ First and also Labour more relevant than they have been all year.
Luxon has demonstrated that he lacks the memory or knowledge of recent New Zealand history to make prudent political calls.
He says he doesn’t know Peters. Perhaps he doesn’t. He was overseas from 1995 to 2011, missing the Shipley-Peters meltdown and the NZ First scandals of 2008.
Luxon’s performance on the campaign trail, where he is unable to utter anything but slogans, suggests he is incurious and unimaginative, or perhaps a bit slow.
Nothing he says indicates he has bothered to understand the powers and constraints of the job he seeks.
His inability to recognise the problems his reckless fiscal promises would cause reveals that he lacks foresight.
He does not even have the X factor of John Key or Ardern that will be needed to maintain social cohesion through the difficult economic times ahead.
In short, he has none of the attributes required to be a successful prime minister.
Today, in Q4 2023, his party is polling no better than in Q1 2022 when he first committed to tax cuts.
Even among National supporters, a third don’t prefer him as Prime Minister.
Still, he soon will be. We must all wish him well to do better than Ardern, who I rightly described as a flake, who might win the election but whose Government would fail, just weeks before Peters gave her the top job in 2017.
- Matthew Hooton has over 30 years’ experience in political and corporate communications and strategy for clients in Australasia, Asia, Europe and North America, including the National and Act parties and the Mayor of Auckland.
