Claire Trevett: Coronavirus is Labour's biggest election threat, at the worst time

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson deliver an update on Covid-19 in the Beehive. Photo / Mark Mitchell

COMMENT

When Prime Minister Jacinda Ardern stood up at her weekly press conference on Monday, she must have been tempted to apply the remedy for her biggest problem to a lesser but still vexing problem: Shane Jones.

The recommendation for people potentially exposed to the coronavirus is to "self-isolate" for two weeks.

In Jones' case, that could be extended to 200 days – until after the election.

Jones' recent comments that Indian students had damaged some New Zealand tertiary institutions prompted a phone call from Ardern.

She told him she was disappointed and pointed out that his actions were distracting and unhelpful to the Government.

She then did an interview with the Indian Weekender and made it clear that if Jones was a Labour MP he would have been sacked or demoted.

Of more concern to NZ First was her subsequent comment urging voters to show their thoughts at the ballot box. "You determine who is able to form governments and you have it within your power to decide what you make of those remarks, as well ... I ask of voters to act on their values when it comes to election time."

This could very easily be taken as urging voters to kick NZ First out of Parliament – or at least to ensure Labour could form a government without them.

Ironically, that prospect is precisely why Jones made the comment in the first place.

Jones, too, is dealing with a crisis – an existential crisis for NZ First, and hence his own political career.

Rather than even appear chastened, Jones went to Facebook to proudly share articles on his comments. "Plenty more to come," he promised.

Ardern has to make it through until Parliament rises in early August before she can claim no responsibility at all for Jones' actions and words.

Jones will escape because the PM has to be seen to be almost solely focused on the bigger issue: the coronavirus.

For almost three years, Labour has talked of National's "nine years of neglect", blithely ignoring the fact that National was also dealing with massive and unavoidable drags on the government wallet.

Those came in the form of the Christchurch earthquakes and the Global Financial Crisis – a double whopper.

With coronavirus upon us, Labour is about to find out for itself the reality of dealing with such events.

When there is an economic crisis, tough decisions have to be made. Those decisions aren't always good for a political party's own promises.

National had to make its decisions: including breaking a promise not to raise GST. National decided it could no longer afford its original tax cuts plan – so raised GST to pay for the tax cuts.

Labour will likely also have to make some. If NZ First has been an anchor on Labour's dreams of delivering change, a big economic shock will be worse.

Labour has dealt with crises – m.bovis, White Island and the mosque attacks. But it is yet to be tested on a big global economic shock.

This is its test.

Until now, Finance Minister Grant Robertson has been wedded to the "Budget Responsibility Rules" he set while in Opposition.

Those promised Labour would stay in surplus and get net debt to within 20 per cent of GDP.

If the impact is significant (and most countries are forecasting it will be) he may have to break those rules – or cut spending in other areas to pay for measures that stimulate the economy.

Thus far, Labour's primary focus has been on the health response. That is necessary, but not for too long.

Addressing the economy cannot wait until the Budget at the end of May.

Businesses are not going to keep staff on purely in the hope the Budget will provide relief.

They need certainty soon.

There is, of course, work underway in the Beehive to work out how to do this.

The Government is weighing up the possibility of a pre-Budget package of measures.

The Provincial Growth Fund, for example, may well be used to provide short-term help to some businesses and some work has been done on that.

The advantage of that fund is that it can be mobilised quickly.

Robertson may also have to revise decisions on some other Budget bids to help pay for it all – he may even have to jettison a few planned election-year sweeteners.

These are the tough choices referred to earlier.

While there is some cause to wait to see just how bad the fallout will be, there is also the risk that the perception will set in that the Government does not know what to do.

National has already started trying to seed that by pointing out measures such as wage subsidies that it thinks the Government should already have announced.

Via a tweet last week, it also sought to capitalise on its own record (though some would argue it was mixed) through the Global Financial Crisis and Christchurch quakes. It is hoping that if voters are facing economic uncertainty they will opt for National.

National Party leader Simon Bridges has tried to depict Labour's response so far as confined to urging people to wash their hands for prolonged periods. He has pointed out that National's first moves were to prop up people's pay so they did not lose their jobs at all.

Labour's was to remove a stand-down period for the dole after people had lost their jobs.

National has also decided to bring forward the release of some of its five-part economic plan. The first part is coming next week, expected to be measures to cut the regulatory burden on small business.

The most anticipated part of its plan – and the one Bridges has promoted as important to stimulating the economy - is the tax cuts part.

That will not come for some time.

National has gone back to the drawing board to assess whether it now needs to boost what it had planned, and whether it can afford to. But it will not make that decision until the actual impact is clearer.

That is because tax cuts are very expensive and once National has released its plans, it can hardly withdraw them purely because things were not as bad as thought.

In the meantime, businesses wait.

Industries such as forestry, the airlines and tourism are the immediate hits, but the flow-on effects will worry the Government.

The last thing it needs are lay-offs and small businesses collapsing as tourism grinds to a halt and people decide to stay home instead of going out.

Then it affects everyday workers – workers who will go to the polling booths in September.

Ardern has taken it upon herself to try to keep the domestic market going at least.

She has encouraged people to go out and about their lives as usual.

Go out for dinner, go to that event. The latest advisory that one of the confirmed cases was at a Tool concert will not help her cause here.

They also fly in the face of the measures being taken by governments both here, and overseas.

Travel bans, import bans, talk of quarantining entire towns, cruise ships quarantined for two weeks.

It is little wonder normal people are looking at all of that and thinking "everything is not hunky dory".

Governments insisting people go about their normal lives in the face of such measures is a bit like Hugh Laurie in Avenue 5 urging the passengers on his space cruise ship to stay calm – and then adding they should listen to his actual words, not the tone of panic with which he says them.