The median voter is a hypothetical person – a statistical artefact – whose preferences lie midway between the major political parties. Whoever captures the median should theoretically win an election, so strategists and marketing directors across the political spectrum obsess over who these people are and what they want.
In the 2010s, there was much talk of “Waitākere Man”, a tradie in West Auckland who once supported Labour but defected to National because of all the Māori rights and feminism (plus ça change).
In 2023, the median voter was a woman on a middle income with young kids, hence the fixation on childcare subsidies by the major parties.
Medians are sometimes deprecated as “low-information voters” – they don’t pay much attention to political dramas and policy announcements, especially this far out from an election.
The grand contest of ideas that activists and MPs live by is like barely heard supermarket muzak to them; a babble of voices in a distant room. They usually switch votes on the basis of leadership and their personal economic circumstances.
This should be good news for Labour, but the meltdown in Te Pāti Māori has made Chris Hipkins’ job next year a lot harder. He can’t rely on TPM’s six seats; if things get worse he might need to rule them out entirely. But there are no polls that show him forming a government without them.
Winston Peters has disqualified Hipkins (but not Labour). His only hope for victory is to capture roughly 170,000 votes off National during the next 12 months. This will require a shift to the political centre that will make many in his party uncomfortable.
Whoever leaked the details of Labour’s capital gains tax – ruining the announcement of its most pivotal policy – was almost certainly a dissatisfied party member enraged by the abandonment of the wealth tax championed by the left.
Every political party struggles with this tension between the grand aspirations of its members and the cool pragmatism of the strategists.
Hipkins needs to be extremely pragmatic, given his circumstances, but factions in his party are still bitter about his policy bonfire from 2023. Te Pāti Māori might not be the only party fighting a civil war heading into an election year.
Labour’s CGT is like a piece of minimalist art: a few deft lines tracing the outline of what a tax policy might look like. It is a tax on capital gains that excludes almost all forms of capital. Instead, it is a way of disincentivising investment in property. If you buy a bach or a block of flats and its value merely rises with inflation – no real gains at all – you’ll still need to pay 28% tax when you sell it.
The sin tax
In an ideal world, the policy wouldn’t raise much revenue: it would shift capital out of property and into the productive economy: shares, equipment, patents, brands. It’s a sin tax, but instead of punishing smoking or drinking, it is castigating property speculation.
In a less-than-ideal world – ie, the one we live in – many New Zealanders will respond by maxing out the value of their family home, which will be exempt (alongside farms).
But the shift away from a property bubble to a real economy will be slow and painful, and this is another credible attempt to drag the nation – like a goat in the road, hissing and spitting and digging in its hooves – towards a more prosperous economic model.
National’s response landed somewhere between a temper tantrum and a nervous breakdown (Nicola Willis: “Labour’s new tax is an attack on all Kiwis”).
There’s a George Orwell essay about his time in the Colonial police in Burma. One day he was called on to shoot a rogue elephant, but when he arrived at the scene the animal was calm, placid, harmless. A large crowd had gathered to watch the British policeman carry out the task. Orwell felt compelled to shoot the elephant rather than lose face and be judged a coward in front of the local villagers. The creature died in front of him, in agony.
Obliged to block
National has talked itself into a similar position. It has spent so many years warning voters that modernising the tax system will wreck the economy that it feels obligated to block any reform, no matter how minor. Better that the economy slowly dies in front of it than that the party of fiscal responsibility admits it was wrong.
Labour sweetened its CGT with a promise of three free GP visits a year. This is a universal benefit. Why not restrict it to lower-income families? Because that would exclude the median voters it’s trying to bribe.
This is Labour’s great sin. It should make healthcare cheaper and more readily available – one of the goals of National’s Health Minister, Simeon Brown – but you can’t market that as an election promise.
So instead Labour is giving a scarce resource away for “free” under the pretext the new tax will pay for it.
It’s a cliché of politics that there are two campaign messages: “time for a change” and “don’t put it all at risk”. It’s early days, but Labour’s version of change looks more like the technocratic centrism of the Helen Clark-Michael Cullen years than the ecstatic transformations promised by Jacinda Ardern.
National will run a negative campaign, warning that taxing property speculation will somehow destroy the country, and some median voters could be persuaded that “Labour isn’t ready yet: perhaps Christopher Luxon deserves another three years?”
But National will need to offer something positive alongside that. Median voters are distracted but they aren’t stupid: if the government continues on its present lumbering trajectory, putting it out of its misery will be a risk they’re willing to take.
