Labour needs new leader, economic reforms to regain trust - Richard Prebble

The Labour Party, led by Chris Hipkins, faces calls for renewal after electoral defeat and policy setbacks. Photo / Getty Images

THE FACTS

• Labour’s rating of 29% in a 1 News–Verian poll this month was down 3% from April.
• NZ First leader Winston Peters has ruled out working with Labour leader Chris Hipkins in any future Government coalition.
• The Australian Labor Party currently holds the Federal Government and all the mainland states and territories.

Last week I explained how the coalition can win: avoid disunity, and someone must tell Christopher Luxon that PM doesn’t stand for project manager.

This week the harder question: how can Labour win?

When I was appointed by caucus to Labour’s campaign committee after the 1978 loss, the party was in a mess.

The MPs were in denial that Labour had failed in Government. We had a leader the electorate had rejected. The polls pointed to another loss.

The first step in any successful change is to correctly analyse the problem to be solved.

Polling we commissioned showed that on seven out of eight key issues, voters preferred Labour’s policy.

But as New South Wales Premier Neville Wran told us: “The eighth issue is economic management. You will never be entrusted with the country’s cheque book until you are economically credible.”

Wran thought we were a bunch of losers and did not try to hide his opinion.

We sought advice from the Australian Labor Party (ALP) because it is the most successful Labour party in the world. Today, Labor holds the Federal Government and all the mainland states and territories.

The ALP is Australia’s natural party of government with a reputation for economic competence combined with a social conscience.

Bob McMullan, the ALP’s legendary campaign manager, said every election is a choice between leaders. “To win you need a leader you can promote.”

McMullan told us to ignore the loony left. “If you follow their advice, you will lose. The left will hold you responsible. If you ignore the loonies and win, they will never say that you did not follow their advice.”

Labour’s position today is worse. Instead of a hard review of why it lost, Labour’s MPs went on a PR “listening tour”.

They are in denial that their Government was incompetent. Labour inherited an economy that was growing, with price stability, low debt and balanced books.

It left behind a recession, a cost-of-living crisis, a growing deficit, fiscal cliffs of unfunded promises and rising debt.

Chris Hipkins’ record is one of repeated failure. When he was Minister of Education in 2022, Term 1 attendance dropped to 46.1%.

His claim that New Zealand was at the “front of the queue” for Covid vaccines was false. His decision, against officials’ doubts, as Covid Minister to make vaccination mandatory created social division without stopping the spread.

Hipkins failed as Prime Minister. This column urged him to call an immediate election and seek a mandate as Canada’s new Prime Minister, Mark Carney, has successfully done. Instead, Hipkins clung on, lost ministers and then lost the election.

In the 1 News–Verian, post-Budget June poll, Labour slipped to 29%, trailing National on 34%. Its extreme partners, the Greens and Te Pāti Māori, are frightening voters.

Labour’s strategy appears to be to issue no policy and hope the coalition implodes. That’s not a plan. That’s wishful thinking.

Yet Labour has a real opportunity. Finance Minister Nicola Willis’ Budget has been described by former National finance minister Ruth Richardson as “fiction”. National plans to spend 42.7% of GDP, spending and borrowing more than Labour.

As Richardson says: “From a central government perspective, it’s clear we have a crisis.” She means the demographic time bomb. National looks credible only in contrast to Labour, not in relation to the country’s real challenges.

Labour has had the answers before. Norman Kirk’s savings-based superannuation scheme. The architect was Sir Roger Douglas. If it had continued there would be no superannuation crisis.

Singapore’s savings-based health system is among the world’s best.

Douglas and professor Robert MacCulloch have produced a practical plan to shift New Zealand to a savings-based model.

National won’t deliver reform. Labour could deliver the reform the country needs.

That would require new leadership.

One striking difference between the ALP and New Zealand Labour is how they handle defeat. In Australia, defeated leaders resign and let the party renew.

In New Zealand, Labour leaders hang on. This slows renewal, traps the party in yesterday’s battles and leaves voters wondering what the party stands for.

No one is ever ready for leadership. An MP with the right character, now in Hipkins’ shadow, would grow into the job.

With a new leader, Labour could campaign on savings-based super and health. Labour could distance itself from the Greens and Te Pāti Māori.

Winston Peters never ruled out going with Labour, just with Hipkins. Peters is a strong supporter of savings-based super.

Act was formed by Douglas to deliver savings-based superannuation and health.

Labour, led by an economically literate leader, committed to the Treaty that Governor Hobson wrote, with a programme to introduce savings-based health and super, could form a Government with New Zealand First and Act.

A fiscally sound Labour Party could become the natural party of government, like its Australian cousin.