The one it puts in the most uncomfortable spot is Prime Minister Chris Hipkins, who has been on a charm offensive with business and does not particularly need a class war six months before an election.
The next day, Hipkins made that clear in quite unequivocal words. There would be no capital gains tax. No wealth tax. Not in the Budget (and probably not in Labour’s 2023 tax policy, but it hasn’t got to that yet). There would not even be a cyclone tax, despite the estimated $9-14 billion cost of it.
Instead, he set out a way to pay for that which is very close to the way National would pay for it: debt for the big, longer-term infrastructure spending and using existing money for the rest of it.
That was in Hipkins’ first pre-Budget speech of the season, delivered to a business audience in Auckland.
He signalled where the money would go in the Budget: the cyclone recovery, targeted cost of living help, infrastructure, science and tech.
It would, he said, be his “no-frills Budget”.
If they were listening, some quarters of Labour’s support base may well have considered his speech to be one of bitter pills rather than no frills.
It’s not often you hear a Labour leader heaping praise on business and even thanking them, as Hipkins did when he said he knew that many had tried to absorb cost increases to try to keep prices as low as possible for consumers.
And in case those businesspeople didn’t appreciate it, Hipkins spelled out to them what he had done in response to the concerns they had raised in his earlier meetings – most notably the easing of immigration rules to allow them to bring in more workers.
His courting of the business sector had begun in his first meeting as Prime Minister, when he went straight to Auckland and met a group of Auckland Chamber businesspeople.
He has been back to that sector repeatedly – but he is yet to speak at an actual Labour Party event. That won’t happen until the end of May at Labour’s Congress.
While he has also kept up regular meetings with the Council of Trade Unions, they are much lower-key.
It is part of his wider de-Ardernisation, a deliberate shift away from the style and priorities of Jacinda Ardern to his own and an attempt to rebuild bridges that Covid and Labour’s reforms agenda had destroyed - bridges with business and the voters.
That process began with his bonfire of policies and re-jig of the main priorities the Government was pursuing from Ardern’s climate change and child poverty to his own bread-and-butter issues.
His list of top priorities for new spending in the upcoming Budget was starkly different to Ardern’s because of what was missing. There was no mention of climate change, for instance, or child poverty.
His veering has sometimes been taken as an implicit criticism of Ardern’s approach.
But there is some method to what might seem like madness to Labour’s faithful.
With less than six months to go until the election, Hipkins is rebuilding bridges and trying to remove potential obstacles in his path. It takes a long time to build up economic credibility and Labour had lost a lot of ground.
Whether it was warranted or not, many in the business sector believed the Government was not listening to them over Covid-19 and afterwards.
Hipkins is not deluded into thinking that if he bends over backwards and flatters them, big business (or the wealthy) are suddenly going to flock to vote for Labour.
What is he hoping for is that a more constructive relationship with the business sector will flow on to the voters.
General optimism is a key factor in a government’s chances of holding on to power – and business confidence feeds into that.
It is also aimed at helping address one of Labour’s weak spots: it is perceived as a less capable economic manager than National. That has long been the case – barring a short period during the Covid-19 crisis.
Labour does not need to be beating National on that front, but it can’t afford to be so far behind that it becomes fatal. It needs to be competitive.
Since the change of leadership to Hipkins, there has been an improvement in the perception of Labour – this month’s Taxpayers’ Union Curia poll showed Labour has closed the gap significantly when voters were asked which party was best at managing inflation.
National had been 26 points ahead in January. It was now only 11 points ahead.
Hence Hipkins’ swift manoeuvre to self-brand as the “no-frills” guy to try to stifle National’s attacks on Labour as a big spending, wasteful Government. He has started countering that with figures that illustrated Labour’s spending record was maybe not as bad as Luxon was claiming.
He has started using words such as “restraint”.
Some kind of tax reform that penalised the wealthy would not necessarily destroy his moves in that area, but nor would it be helpful. It is not clean, it would buy an unnecessary fight and it would be another distracting topic.
So, there was a long pause from Parker when he was asked if “you” had the courage to undertake tax reforms to make the system fairer. He eventually answered yes, but the flurry of “buts” that followed it made it clear he was taking the “you” as a singular rather than a plural.
Yes, Parker as an individual would. But the Government? Maybe not.
