Danyl McLauchlan analyses the past week in politics in an online exclusive story.
Friday: Labour MPs spout false claims
This week saw a string of false claims by Labour MPs and the party’s social media team: Willie Jackson warned that National and Act would lower the minimum wage; Andrew Little announced they’d fire all the teachers and sell all the schools. The social media team ran attack ads warning that National would scrap Labour’s policy to deliver half-price public transport for disabled New Zealanders, a policy that does not actually exist. Right-wing activists gleefully accused Labour of “spreading disinformation” – normally a subject of considerable panic among the left-wing intelligentsia, who worry that right-wing disinformation is destroying democracy.
The point Labour was trying to make – in the most inept way possible – is that a National-Act government would be very radical compared with the past 20 years of centrist MMP governments. And this is true. But the Labour-Green-Te Pāti Māori government would also be radical, albeit in a very different direction. Just this week Te Pāti Māori launched a justice policy that would eventually lead to prisons being abolished.
Saturday: Act Party loses another candidate
The Act Party lost its fifth candidate in eight weeks today: Brent Miles, the candidate for King Country, withdrew for “personal reasons”. Previous candidates pulled out or were stood down after it emerged they’d made objectionable social media comments about Jacinda Ardern or vaccines. Both Act and National have struggled to undertake due diligence when vetting their candidates. This did enormous damage to National’s credibility during the last election, and Act seems to have been punished this year: the party was averaging 13% a few weeks ago, but the recent batch of polls saw it lose support to National, putting it back at around 10%.
Sunday: David Seymour make odd allegiance announcement
Poll numbers might explain Act leader David Seymour’s odd announcement that he might support a potential National government on confidence but not supply. This would allow National’s Christopher Luxon to advise the Governor-General that he had enough votes in Parliament to form a government, but if Act didn’t support the government’s budgets, they wouldn’t become law.
There’s some doubt about whether this is constitutionally legal. Seymour’s argument is that it would simply be a new iteration of MMP, which has seen different governing arrangements over the years. But it would be a very fraught, unstable way to run the country if the government needed to haggle with Act every time it wanted to spend some money.
And that is precisely Seymour’s point. All through the John Key years, National governed with the support of minor parties – United Future, Act and the Māori Party – that didn’t have many seats, or much political leverage. There is a theory in some quarters of the National Party that they lost the post-election negotiations with New Zealand First because the idea of a true power-sharing coalition simply wasn’t conceivable to National’s leadership.
Over the past few weeks, Luxon has ruled out a number of Act Party policies. From Act’s perspective, National still doesn’t understand that, on the current numbers, it would be the partner in a coalition government. So, Seymour is saying: after the election, Act will have a lot of seats and a lot of power. And if National doesn’t cede that, it won’t really have a government.
Monday: Migration at record levels; Labour slips in polls
The Department of Statistics announced record levels of migration this year until July: a net gain of 96,000, with most migrants coming from India, the Philippines, China, South Africa, and Fiji. In a financial update published later this week, Treasury admitted we’d be in recession if we didn’t have such high net migration. It’s probably inflationary, especially in the housing market. And we’re losing large numbers of New Zealand citizens – primarily to Australia.
The TV polls aren’t any more accurate than the other political surveys, but they often have more impact, simply because more people see them. And polling results often shape voter behaviour. (Some political scientists think they should be banned, alleging they turn politics into popularity contests rather than a contest of ideas.)
The Newshub-Reid Research poll was another in a string of terrible results for Labour, putting the party at 26.8% against National’s 40.9%. If it wasn’t so close to the election, Chris Hipkins would consider stepping down at this point, elevating another MP in an attempt to “save the furniture”.
Sometimes when a major party declines in popularity during an election campaign, it loses swing voters to its primary rival, and once it’s apparent, the party isn’t in contention to win, it will shed a second shell of support as people who want to vote tactically in response to the shift in the campaign desert them. We’re seeing former Labour voters shore up New Zealand First to act as a handbrake on National-Act, and support the Greens, presumably because they like them more.
Tuesday: Government opens the books
Back in 1990, National won a landslide victory against the Labour government, whose radical economic reforms seemed to have failed catastrophically. Shortly after his victory, Treasury met with the newly elected Prime Minister Jim Bolger and informed him that Labour had badly misrepresented the state of the government’s books and the nation was very close to bankruptcy.
So, the new Finance Minister Ruth RIchardson amended the Public Finance Act, compelling Treasury to publish the pre-election economic and fiscal update, affectionately known as the PREFU, which reveals the true state of the government’s finances. There have been rumours that this year’s PREFU would show a serious decline in tax revenue – and tax is down, but not frighteningly so. And there’s been some controversy about the $4 billion in spending cuts announced by Finance Minister Grant Robertson a few weeks earlier. Due to these cuts, the government’s books are predicted to return to surplus in 2027, so Robertson can claim he has been a sober and prudent custodian of the nation’s books. But it would be very out of character for Robertson to abide by the spending limits he’s just announced – so it’s questionable how seriously anyone should take these estimates.
Even if Robertson – or a new finance minister – sticks to these spending constraints, the PREFU forecasts are predicated on the assumption that nothing else will go wrong over the next few years. There won’t be a slowdown in China, or another major weather event, market crash, surge in oil prices or other unforeseen event. So long as nothing bad happens in our increasingly unstable world, we’ll probably be okay.
Wednesday: Another poll in favour of National and Act coalition
TVNZ’s high-profile Varian poll shows National and Act able to form a government – but only just, and New Zealand First is above the 5% threshold. Luxon has refused to rule Winston Peters in or out, on the grounds that he’s “not in Parliament and not above the threshold”, but this is no longer a credible position. Luxon probably doesn’t want to go into government with Peters, because nobody does, but it would give him enormous leverage negotiating with Act if he could threaten to form a government with Peters.
The poll also reminds us that New Zealand could easily elect a parliament that cannot form a credible government. A Labour-Greens-Te Pāti Māori-New Zealand First alliance is simply not a viable arrangement. But given the antipathy between Seymour and Peters, it is hard to imagine a National-Act-New Zealand First coalition lasting more than a few weeks. We might see the post-election negotiation last a very long time, and we might even see a second election.
Thursday: Economists find hole in National’s tax policies
2023 is a high-velocity campaign with a lot of things are happening quickly. No one has a good theory for why this is, but very significant policy announcements – like Labour’s free dental plan – enjoy a day or two of media coverage, then vanish from the discourse, replaced by something new. The two policies with staying power have been Labour’s GST exemption for fruit and vegetables, and National’s big tax and transfer policy, because both these promises made many of the nation’s economists very angry.
National has refused to release the modelling for its policy: the set of numbers and assumptions that would allow it to raise $700 million a year by taxing foreign buyers on their purchases of New Zealand properties worth more than $2 million. On Thursday, a trio of economists – Michael Reddell, Sam Warburton and Nick Goodall – who have done their own modelling, based on CoreLogic’s house price data, estimated National would raise between $212.7 million and $286.8m a year, leaving it about half a billion dollars short every year.
Unlike the CTU’s chief economist, Craig Renney – a former advisor to Robertson – none of these critics are politically aligned. Instead, they – and a number of other economic commentators – are worried the government’s books are not particularly healthy, despite the optimism of the PREFU, and that National would have to borrow heavily to fund its tax cuts and transfers, none of which have much economic logic behind them to start with.
National simply insists it is confident in its numbers.
