Prime Minister Chris Hipkins. Photo / Mark Mitchell
OPINION:
Prime Minister Chris Hipkins’ policy bonfire yesterday is exactly what the Labour Government needed to do. It sends the most powerful signal yet that with Jacinda Ardern’s departure, a new direction is being embarked upon – one that is less concerned with ideological pet projects, and more with delivering the things that matter to the public.
Ditching or kicking down the road policies that seemed half-baked around media mergers, hate speech laws, biofuel mandates and social insurance was the right thing to do politically. These are policies very few voters care about, so they won’t be missed by many. The big question is what Hipkins will replace the jettisoned policies with.
Very broadly, the first big policy reset continues the theme that this Government is less about woke politics and more about working people and focusing on the cost of living crisis. That’s an oversimplification, but largely it will come through that under Hipkins, this is a more no-nonsense administration focused on traditional Labour concerns.
Hipkins once again used the phrase “bread and butter” to explain the focus of his Government and this reset, and in his press conference, he repeated the phrase “cost of living” numerous times.
Increasing the minimum wage at the same time as axing other policies was a very smart move. The $1.50 increase is quite substantial, and the message underlines his attempts to reposition Labour as being more about working-class concerns and the economy.
Left-wing commentator Chris Trotter say the minimum wage increase “was the new Labour Leader’s pièce de résistance. Nothing could better signal Labour’s return to its political roots – a movement dedicated to the welfare and uplift of ordinary working-class New Zealanders. For these voters, Hipkins’ turn away from wokeism will have been the ‘bread’ of this afternoon’s announcements, but his announcement of a new $22.70 per hour minimum wage was, unquestionably, the butter”.
Usually, when governments carry out U-turns, they attempt to underplay how significant the change in direction is. They are normally viewed as a sign of weakness – an admission of an error, diminishing the credibility of the politicians in charge. And usually, it’s their opponents who emphasise the significance of the shift.
Yesterday, it was the other way around. It was Labour emphasising the magnitude of these changes, and National playing them down, suggesting they were minor and merely being deferred until after the election.
So this U-turn isn’t embarrassing for Labour – quite the opposite. It will be read as a sign that the Government is listening. It is likely the public will reward Labour for this U-turn, and Hipkins has given voters a greater reason to trust his judgement. It underscores that Hipkins is the new broom, fixing the mistakes of the previous leader (even though Hipkins has been in the inner circle of leadership the whole time).
Hipkins needed to underline that the 2023 Labour Government is different to the failing Ardern government of last year. So far, he has managed to differentiate himself and show that he is ruthless, listens to and acts upon public feedback, and is able to make tough decisions.
Peter Dunne argues today that Labour effectively wants to give the impression that they are a brand-new Government, and therefore there’s no need for change in October: “Hipkins is aiming to pull off a change of government within a government. He hopes this will stave off any need for that to happen at this year’s election.”
This gives Hipkins momentum, and he will therefore be able to stamp his authority further and make some even bigger changes in the near future – such as substantial changes to the Three Waters reforms, and pulling back from the co-governance agenda.
There was no consensus amongst commentators on how big Hipkins’ policy bonfire was – for example, broadcaster Rachel Smalley said “the party’s direction hasn’t so much pulled a U-turn … more a backflip and a triple somersault”. In contrast, Peter Dunne argues the reset has been completely over-sold, and the policy areas are still being overseen by “the same ministers who championed and staunchly defended the Government’s unpopular policies”.
But most commentators do agree that yesterday’s announcement heralds further change. As Luke Malpass puts it, “the iron laws of political arithmetic surely mean there will be more to come”.
The Herald’s Thomas Coughlan says there will now be greater anticipation about other Labour pet projects that might be cancelled: “This places almost all of the Government’s policy agenda in limbo until Hipkins is able to draw a line under the refocusing and move forward. This needs to happen sooner rather than later. It’s not tenable for there to be question marks hovering over everything from light rail, to the fuel tax review, to the Lake Onslow hydro scheme, to the future of local government review.”
Some on the political left and in progressive institutions such as unions and NGOs have expressed disappointment today with the demise of the hate speech laws and social insurance proposals. But the more that the public hears such complaints about Labour’s U-turns, the more this will actually help Labour.
Some commentators haven’t been convinced these policy changes are enough. Even a substantial 7 per cent increase in the minimum wage needs to be weighed against the rate of inflation at the moment. Such workers will be merely standing still – so Labour couldn’t really have justified giving minimum wage workers anything less.
BusinessDesk’s Dileepa Fonseka points out today that, although a big increase to the minimum wage is useful for those at the bottom, it’s “a poor form of wealth redistribution mainly because it targeted people on the minimum wage rather than people on low incomes. While these two groups might sound like the same thing, they are not… A significant proportion of people on the minimum wage were actually teenagers living in relatively well-off households”.
And what about climate change? Dropping the half-baked biofuels policy might be sensible, but it will need to be replaced by something more substantial - otherwise, Labour is simply failing to fulfil its promise to make meaningful progress on emissions.
Also, at this stage, most of these policies have been deferred rather than dumped. Social insurance and hate speech laws have been parked but not ditched entirely.
In reality, these policies are probably dead in the long-term as well, and it was only diplomacy that stopped Hipkins from pronouncing them as completely gone. But it does leave the door open for attacks from opponents about whether those issues will be revived in the future.
National will be particularly keen to push the idea that a vote for Labour is a vote to bring these deferred policies back during a third term of power. Thomas Coughlan puts this well today: “If Hipkins isn’t careful, the election could turn into a referendum on these half-binned policies. If the Government is convinced they are truly harmful to its electoral prospects, it may be forced to bin them entirely.”
Similarly, Stuff political editor Luke Malpass says: “That still makes it potent territory for National to campaign on. The jobs tax? Could be next term. Hate speech? More consultation.”
It’s hard to see Hipkins’ policy bonfire as anything other than pure pragmatism – he’s ditched distracting and fringe parts of the policy programme with the aim of winning a third term. But will this kind of realpolitik be enough to enthuse voters?
Getting rid of unpopular policies is a start, but the question is, what he will replace them with, if anything? Labour now appears to be emulating National’s “small target strategy”, in which they have very few substantial policies in the hope that this will reduce what they can be criticised over.
But the problem for Labour is that they have been in office now for nearly six years, yet have carried out very few big reforms. What have they got to show for their time in government, and what reform programmes will they implement if they keep on ditching key parts of their work programme? Can Labour properly differentiate itself from National?
As Dileepa Fonseka argues today, “adopting your opponent’s agenda carries the unfortunate side effect of making it look like you’ve left the people who voted for you high and dry”.
Fonseka also comments on the cynicism involved: “Perhaps Hipkins wagers that if it comes down to a contest of two parties with virtually indistinguishable agendas, the public will prefer his own, and judging from recent polls he may not be wrong. Thursday’s mass jettisoning has the makings of creating an environment for not just a small target election but a micro-target one. Those who wanted better have every right to feel annoyed.”
It’s going to be a very empty election campaign if all the parties suddenly start dumping their policies as soon as they come in for criticism. So, yes, it’s good that Hipkins has listened to public feedback and is re-orientating towards the cost of living crisis – but he’s going to have to deliver something of substance that convinces the public Labour has a plan beyond U-turns.
