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Home / New Zealand / Politics

Claire Trevett: National leader Chris Luxon's off-piste moments and who is winning the inflation wars

Claire Trevett
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Claire Trevett
22 Apr, 2022 05:00 PM7 mins to read
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National Party leader Christopher Luxon says the Government is 'addicted to spending'. Video / NZ Herald

OPINION:

As we head into the economic winter the Prime Minister warned us about back in summer, National Party leader Christopher Luxon is getting in some early skiing practice by going off-piste.

Five months into his job as leader of the Opposition, Luxon is fast learning the news cycle gives with one hand and takes with the other.

The giving came for him from the quarterly release of inflation figures, showing an annual 6.9 per cent increase in inflation for the year to March.

Opposition parties tend to make hay while the blizzards blow, so it was a welcome Arctic blast for Luxon.

The taking came from himself. He had to resort to his second mop-up in two weeks after his musings got away on him – this time on cancelling Labour Day to pay for Matariki; last week on removing all subsidies from public transport.

Of all the problems afflicting businesses, mooting the cancellation of a public holiday is not exactly the most promising policy platform to fight an election campaign on.

Sure enough, within a day Luxon claimed he was simply speaking in jest and had no intention of jettisoning either Matariki or Labour Day. At this rate, by Wednesday he'll be promising to add another public holiday.

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Luxon gets some grace for being a rookie - he doesn't yet have an encyclopaedic knowledge of government, or even his own party's policies. His blunders have also obviously been mis-speaks rather than actual policy on the hoof.

But he stepped up for the job and he won't get too much grace.

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All leaders get to make captain's calls but no caucus likes to be blindsided by captain's calls too often: they have to be reserved for special occasions and something that actually matters. Jacinda Ardern's came in the decision to give up all hope of a capital gains tax on her watch.

Luxon's mentor John Key also regularly found himself off-piste, whether by accident or design. He usually laughed it off and it did him no harm.

To an extent the license for it depends on popularity and how good the person is at the parts of the job that really matter. So Judith Collins was excoriated during the election campaign for somehow getting herself embroiled into sharing her views on obesity, for example.

But it is, at the least, a distraction. Luxon's latest will have passed most people by and be long forgotten by the time of an election campaign. But election campaigns are a different story because it drags attention away from the points a leader is supposed to be prosecuting.

That is why Labour dusted off the Labour letterhead to fire off press releases about Luxon's comments on Matariki and subsidies for public transport. Using the Labour letterhead rather than ministerial letterhead is a signal it is a party political response rather than a government response.

It was the first splutterings of the election campaign. Labour knew Luxon had no intention of acting on what he had said. It was trying to seed a perception - that Luxon was gaffe-prone.

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The aim of that is to try to dent Luxon's credibility on other, bigger issues.

The biggie in that regard is his credibility on issues the election will actually be won or lost on: the economy and people's back pockets.

Thus far, the polls indicate Luxon's ability to hold his own on the economy is his most valuable attribute.

In both the Taxpayers Union Curia poll (National's pollster) and the Talbot Mills Research poll (Labour's pollster) this week, National has now overtaken Labour and Luxon is well into the 20s and closing in on 30 as preferred PM – heights none of his recent predecessors reached. Meanwhile, Ardern has dropped into the 30s.

The rise of National and Luxon has been parallel to the cost of living rising to the top of the issues that are concerning people – and to Luxon's focus on that.

Covid-19 has dropped well down the rankings of issues of concern – there will be little capital for Labour in that now.

National Party leader Christopher Luxon. Photo / Jed Bradley
National Party leader Christopher Luxon. Photo / Jed Bradley

And Luxon's on-piste moments this week came from the inflation debate.

The three words Luxon said this week that are most likely to help him out in the election were "spend, spend, spend".

That related to the impact government spending has on inflation - the one thing the Government can control. It is aimed at seeding the perception Labour is a high-spending government which won't be able to cut its cloth to counter inflation. It is a well-worn line used by National leaders over the ages.

Luxon has taken aim at high government spending as an inflationary factor for some time - and that argument got more grist from the Reserve Bank Governor Adrian Orr's speech to the International Monetary Fund about the struggles central banks had wrestling the Cerberus of Inflation back under control when it had high government spending to feed on.

Political debates on inflation are simplistic.

They involve the Opposition blaming it solely on the Government, claiming that because it ate the apple of temptation and spent up large on fripperies, the price we are all paying is expensive cheese and gib board.

The Government meanwhile blames Russian President Vladimir Putin and Covid-19, and claims its rivals will be mounting austerity raids on public services to pay for tax cuts for the rich.

Similar arguments circled in 2011 after the global financial crisis, when then PM John Key smote his brow and said there was little he could do about a petrol price increase of 17 per cent because of international oil prices. The then leader of the Opposition Phil Goff was blaming National, rather than global factors, for its GST increase that he had no intention of reversing.

This time around there is truth and exaggeration in both. The Budget will reveal whether Labour is spending money on fripperies – Robertson has already said a large chunk of the $6 billion allocation for shiny new things will go on health services under the health reforms. He has also pointed to forecasts inflation will drop from the middle of the year, as a reason not to do anything drastic now.

As for austerity, no modern political party has dared venture down the austerity path – not even Act (unless you're a public servant in a department Act thinks is a bit useless, in which case brace yourselves).

Beyond tax cuts, Luxon has not set out exactly what National would do to counter inflation or where it would cut spending, beyond a few projects National never liked anyway such as light rail in Auckland.

But nor does he have to yet. The full alternative plan will (and must) come later in the electoral cycle.

For now he wants all of the focus to be on what the Government will do rather than arguing about the fine print of National's plan.

The virtue of being a second term Opposition is you can't be blamed for inflation – and whether or not it is the Government's fault, it is very firmly the Government's problem.

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