All talk of a National Party leadership change has evaporated, at least for now.

The Opposition senses the Government has serious problems, with its inept handling of Michael Cullen's Tax Working Group (TWG) report a mere symptom.

Put simply, National has never bought Labour's positioning of Jacinda Ardern as a policy wonk.


In Opposition and as Prime Minister, her approach has not been to tackle complex issues herself, but to emote while outsourcing policy work to so-called experts.

As her plethora of working groups begin reporting, Ardern and her ministers appear as ill-equipped to confront difficult questions as National always suspected.

The management of the TWG report is a case study in incompetence. From the moment its terms of reference were announced in November 2017, it was obvious the TWG would recommend some kind of Capital Gains Tax (CGT).

Since September's interim report, it has been obvious it would recommend a tough CGT and a wide range of other new taxes.

The Government had access to the final report for at least three weeks before it was published.

Despite all this, Ardern and Grant Robertson failed to agree on any confidence-inducing initial position or to achieve even rhetorical alignment with their NZ First coalition partner and the Greens.

Ardern's performances in Parliament and the media have been so woeful that she has either not been properly briefed on Cullen's recommendations or she does not understand them.

She continues to promote the CGT as a panacea for property prices despite Cullen, Robertson and every credible commentator saying it would have marginal effects at most.


She appeared unaware the report also proposed the long list of other new taxes gleefully read out by Simon Bridges in Parliament.

National believes this bungling is not a one-off. The Government's decision late last year to establish another mental health working group to advise it on how to respond to its first mental health working group indicated that it lacks decision-making grit.

It better decide soon what it thinks about the working group recommendation to squeeze all schools into one-size-fits-all education hubs if it wants to avoid that contentious issue hanging around in election year.

Jacinda Ardern answers questions about capital gains tax in Parliament this week. Photo / File
Jacinda Ardern answers questions about capital gains tax in Parliament this week. Photo / File

As the avalanche of working group reports arrive, the Opposition detects panic. Whether or not it was co-ordinated with Labour, the ill-fated attempt by Green MP Golriz Ghahraman to reduce the MMP threshold to 4 per cent in time for the 2020 election was seen by National to reflect grave concern the party can reach the current 5 per cent mark.

National insiders say their polling has NZ First consistently below the 5 per cent threshold, the Greens dicing with death by bouncing around it, and Labour and National locked in a tight battle, both above 40 per cent and within the margin of error of each other.

Aware that lowering the 5 per cent threshold before the election would invite a ferocious backlash, Ardern has ruled out any change before 2023, making the prospect of a two-party parliament after 2020 very real. All National needs is to beat Labour by a single vote and Ardern would be gone.


Bridges' unpopularity continues to be National's main problem but Ardern's flakiness on policy is doing much to mitigate it.

Repeats of the CGT fiasco on every other topic on which working groups will be making recommendations risk knocking off the crucial couple of per cent from Labour's tally to put National back into power.

The growing plausibility of this scenario makes Bridges safe for now. There is no interest within National in distracting voters from Ardern's woes by turning inward. Plus, his prosecutorial style is working against Ardern's lack of depth.

Ardern, though, has an obvious strategy to make all this moot.

It is clear that the Prime Minister's popularity, and that of her Government, has nothing to do with policy or her much heralded "year of delivery". Arden is a symbol of something more ethereal.

While Robertson keeps promising transformation, there is no obvious demand for it by voters, and change brings only political risk.


After 18 months of almost complete failure by the Government on everything from Kiwibuild and child poverty to the relationship with China, it is clear that, for many of her supporters, it doesn't matter what Ardern does, it is enough that she is.

Labour's best strategy is therefore to clear the decks of anything remotely controversial.

New Zealand voters might like their leaders talking about knowledge waves, step changes or economic transformation but they don't want the disruption those things might cause.

Like John Key on steroids, Ardern is well advised to keep well away from anything difficult and, for the next 18 months, just smile and wave.

- Matthew Hooton is managing director of PR and corporate affairs firm Exceltium.