Soaring inflation is forcing Labour to tuck away pet projects and look instead to a hip-pocket lifeline, writes Jane Clifton.
Mythology and literature have a variety of disposal methods for inconvenient monsters – alas none that seem applicable to inflation.
They can be eaten, as befell the Bible's sea serpent Leviathan and the mutant stone fruit in Roald Dahl's James and the Giant Peach, but any kind of consumption only makes inflation more monstrous.
Aggressive pursuit is lethally dangerous, as per Moby Dick.
Perhaps inflation is more like Jaws: endlessly replicable. It savages extensively before it's vanquished, only to lurk in the deep, ready for its next sequel opportunity.
It is Finance Minister Grant Robertson's fate to be devising a Budget in the interregnum between Jaws' last big feasts – pandemic, supply-chain sclerosis and the Ukraine war – and its next possible banquet, a global recession. If Russia takes a decisive hammering from sanctions, economists worry the world will suffer a thudding downturn. Paradoxically, if Russia succeeds in conquering Ukraine, the world's energy crisis will deepen. Either way, inflation stands to be fed fatter than a Strasbourg goose.
The orthodox remedy for inflation is for governments to cut spending. Alas, cutting spending can flip into creating outright austerity, making recessions into depressions.
Had Robertson an inkling he'd face the most ghastly set of options and risks known to any finance minister since the last world war, he might have begged Winston Peters to inflict his kingmaker power on National instead of Labour back in 2017.
Robertson is just one of many Captain Ahabs, vainly trying to harpoon the great white whale. But our Moby is bigger than their Moby. New Zealand's inflation rate is higher than several of our main trading partners, and our greater market distance and lower population only partly excuses this.
The Government had been looking forward to using unspent Covid emergency money for "nice to have" booster projects such as environmental clean-ups and cycleways. Now, both the focus groups and brute common sense are urging it to dump the "nice to haves".
National's fiscal rider used to be, "Will this spending make the boat go faster?" Now Labour's is, "Will anybody literally die if we don't spend this?"
The Government may even sacrifice controversial capital items, which, although they don't directly feed inflation, give voters the impression of money sprayed about on pet projects while households clip coupons.
Robertson's bind is that nothing he does will likely make an immediate difference, so would the cuts and gestures be worth it? Mightn't he be better off getting some policy and asset-building runs on the board while he still can?
The eternal tipping point between these two positions is what keeps political strategists up at night. Perhaps the balance lies in a queasy lesson from the French election, which has just handed the once-marginal National Rally (formerly the National Front) more than 40 per cent of the vote, even while retaining Emmanuel Macron's centrist party in power. Instead of growing the centre, France's leadership has found to its horreur that it's been expanding the discontented and marginalised – to the point where many were prepared to support an incoherent, racially triggering party as a protest.
New Zealand's National-Labour see-saw has depended on leaders who can consolidate a centre, as with Helen Clark and John Key's administrations. For reasons beyond Covid and inflation, Jacinda Ardern's is now on track to deconsolidate the middle vote.
What seemed initially to the Beehive to be merely tiresome rumplets – the anti-mandate lot, the climate-sceptic Groundswell farmers, the cycleway resenters and those who need anti-histamines every time they hear "Aotearoa" – are now tallying up to an electorally handy vote bloc. Like France's Gilets Jaunes – the hi-vis-bedecked grumpies who burnt furniture in the streets for a slew of unconnected grievances – our grumpies are a ragbag, but one thing unites them: a sense that they've been disrespected.
The Jaunes started off being a quarantinably awkward squad, people with bees in the bonnet and bats in the belfry. But their spirit became mainstream. Polls here suggest discontent is spreading to normally tolerant, moderate folk who feel alienated by policies like water management restructuring, the sinking lid on tobacco, Māori co-governance, cycleways and the ute tax. Though perfectly defensible, these ideas have become dangerous electoral luxuries in this climate of insecurity.
Still, some harpoons can set the inflation whale back a bit. Somewhat under the radar is the Government's decision to ratchet the reform dial on the supermarket duopoly a notch or two beyond what the Commerce Commission recommended. Commerce Minister David Clark has ordered urgent new work on busting open the grocery wholesale market and forcing a retail break-up into discrete new co-operatives or franchise groupings. Clark has even mentioned price regulation – futile when last tried in the 1980s' wage-price freeze, but indicative fighting talk within the Government's new, inflation-wrought bustle.
The Government will be aware of new private stirrings toward this eternally lucrative sector, so that any structural regulation it makes is likely to result in new competition. Already, The Warehouse, which learnt much from a catastrophic earlier foray into groceries, is gnawing at the supermarkets' heels. It has quietly built up its grocery offerings over recent years, confident that even the commission's softly-softly reforms would give it new headroom. It's now trumpeting duopoly-busting bargains.
Even the outlandish option of buying groceries from overseas via Amazon is giving supermarkets a dag-rattle. Their franchisees may see new opportunities outside the duopoly if/when the Government regulates against duopoly membership restrictions.
Labour's rhetoric, that supermarkets should "give back" more of their profits, is newly popular — the commission's work, combined with sudden inflation, having pitched the duopoly from an ambient niggle in voters' minds to an urgent indignity. The ascendant National Party, with its "don't interfere with the markets" mantra, could find little shelf space on the issue.
Still, given the discontent at Labour's inflationary impotence, it doesn't much matter what the Opposition says. It's getting support just for not being Labour, and it will be months before its own anti-inflationary recipe is subject to serious voter scrutiny.
That's lucky, since the ingredients so far indicate inflation has a Cookie Monster-ish appetite. Tax cuts will mean more money for people to spend. Yum. Spending at about the same, only better quality? Even yummier — it all tastes the same to inflation.