It is a time-honoured ploy for a new government to paint its predecessor as fiscally incompetent and irresponsible. This is often done to allow a new government some leeway in implementing its promises, on the grounds that first cleaning up the mess it has inherited was a more important priority. There have been times when it has been used as a reason for abandoning new and not particularly well thought out policies altogether. And, occasionally, there is even a measure of truth in a new government’s claims.

Over the last week the new Minister of Finance has repeatedly attacked her predecessor for various unfunded fiscal liabilities the new government has discovered on taking office. Other Ministers have been hinting at similar issues within their own portfolios. However, the previous government has denied all the allegations, saying that all the so-called unfunded risks were accounted for in this year’s Budget. The previous Minister of Finance has gone so far as to say the real problem is that the new Minister does not know how to read the Budget documents properly.

This political argument will likely continue for some while yet, potentially even after the release of next week’s Half Year Economic and Fiscal Update (HYEFU), and the government’s mini-Budget to follow.

In the meantime, there have been two important pieces of broader economic information this week which have added some fuel to the already smouldering fire.

The first was an extremely negative report from the Auditor-General on the former government’s huge post-pandemic $15 billion national infrastructure programme to kick start the economy. He found that government had been warned frequently of the risks to value for money associated with many of the specific infrastructure projects. These warnings included advice from the National Infrastructure Commission that “large scale infrastructure projects are not effective mechanisms for economic stimulus due to the time needed for planning, design and procurement.” Treasury had advised it had “low confidence” the projects could be implemented quickly. The Auditor-General said that a lack of both due process for the authorisation of spending, and providing information to Parliament and the public, meant it was difficult to see whether the government was getting value for money from the projects.

But Ministers in the former government had chosen to ignore the advice and the warnings, and to proceed regardless, leaving the Auditor-General to express his concern “that significant spending of public money continues to occur without appropriate processes for ensuring value for money and transparent decision-making.”

A similar picture of fiscal laxity emerges regarding Kiwirail’s proposals to upgrade Cook Strait ferry services. In 2018 the previous government had approved a $1 billion programme for new ferries to replace the current ageing fleet, as well as associated port terminal upgrades. It had subsequently been advised that the cost of the project was likely to be nearer to $3 billion and had agreed in principle to meet at least part of this cost blow-out. Kiwirail sought additional funding of nearly $1.5 billion from the new government to meet the increased costs. Almost 80% of them were to do with building new terminals in Wellington and Picton, rather than the new ships themselves. Unsurprisingly, the new government has declined to meet the additional funding request. For its part, Kiwirail has said it will now wind down the ferry replacement project and review its Cook Strait operations.

While both the national infrastructure programme projects and the upgrading of the Cook Strait ferries are complex matters, relying on commercial and engineering judgements beyond the capability of any government, their management requires a level of overall government financial supervision and accountability that was apparently lacking in both instances.

As it tries to rectify the problems it has inherited in these cases, the new government will obviously take every opportunity it can heap blame and pour scorn on the credibility of its predecessor. That is the nature of politics. But at the same time, it will also need to take steps to avoid repetitions in the future. The Auditor-General’s report recommended that there should be “regular public reporting on the progress of all significant investments that have had or that require Cabinet-level consideration”.

Such a move would be a useful step forward, but to be truly effective, it will need to be supported by an early-warning system that alerts Parliament, not just the Cabinet, to emerging risks, so they can be scrutinised and potentially mitigated. Otherwise, there is no guarantee similar situations will not occur in the future. 

That brings Dunne’s Weekly to a close for 2023. It will return in the New Year. But, in the meantime, best wishes to all readers for the Christmas period, and for a happy and successful New Year.

 

New National MP James Meagher broke the long-standing convention that Maiden Speeches should be non-controversial. His speech not only raised a few eyebrows but also would have struck some raw nerves. 

Meagher described himself as a "walking contradiction" – “a part-Māori boy raised in a state house by a single parent on the benefit. Now a proud National Party MP in a deeply rural farming electorate in the middle of the South Island." He went on to chide parties of the left that they "do not own Māori", "the poor", or "the workers", and that "no party and no ideology has a right to claim ownership over anything or anyone".

 

Meagher has put his finger on what appears to be an ingrained issue within parties of the left. While they genuinely seek to uplift the poor and disadvantaged out of poverty and hardship, and have a proud record of doing so, they have never been able to accept that many then go on to be successful in life, without the continued assistance of the state. For example, much of Labour's antagonism towards Sir John Key was because he was also raised in a state house by a single parent, and then went on to be an extremely successful money trader, well beyond what should have been his aspirations. 

 

It is the same with Māori. Again, Labour has a proud record of supporting and looking after Māori, but it has never been as strong on supporting Māori aspiration or participation. I recall asking Ta Pita Sharples, after the Māori Party signed its confidence and supply agreement with National in 2005, why they had done so, given their years of support for Labour going back to the days of Tahupōtiki Wiremu Rātana in the 1930s. "It was simple," Sharples said, "National asked us." He said Labour had always been happy to have Māori "in the room" but "never at the table".

 

The left seems to believe that while people should be supported to live good and rewarding lives, they should not seek to go beyond that, or get aspirations above their station. In their view, those who receive State support at difficult times in their lives should not only be forever grateful but should also not use that support to become independently successful later. People like Meagher and Key are uncomfortable reminders to the left of how people can triumph over difficult circumstances to flourish.

 

I have always believed that the basic responsibility of any government is to ensure that every citizen has an equal opportunity to succeed, regardless of their circumstances. But too often, governments have become too focused on preventing failure, ahead of promoting opportunity. And that simply leads to greater dependency. The challenge that Meagher is setting out is for the new government to trust people more to make their own decisions, but with a decent safety net in place for those who cannot or fail in the process.

 

Parties of the left are often overly protective in this regard, to the extent of stifling opportunity for many by promoting excessive conformity. Their efforts to guard against social failure, frequently lead to resentment of those who succeed. At the same time, those on the right on the spectrum often go too far towards the other extreme and appear insufficiently sensitive to those in real need.  

 

However, the new National-led coalition government has pledged to restore the social investment approach, advanced originally by Sir Bill English, to develop a much more sophisticated way of identifying those who are disadvantaged or at risk. At its heart, social investment is about applying rigorous and evidence-based social services policies to improve people’s lives, rather than continuing the broad-brush, one size fits all, approach of the last few years. Labour had abandoned social investment concepts because of their preference for universal, untargeted approaches to social assistance.

 

Social investment draws on the findings of long-term studies – like the Dunedin Health and Multidisciplinary Study that has been ongoing since the 1970s – as the basis for policy development. Its aim is to ensure that, to the greatest extent possible, the government’s investment in social services is always directed to where the need is most identified, and where such intervention has its highest chance of success.

 

A proper social investment-based approach to social services may well weaken the political left’s long held, self-claimed mortgage on compassion for the disadvantaged that Meagher has highlighted. But far more importantly, it will shift attention to a more direct approach to disadvantage and inequality in all its aspects because of its reliance on empirical data over emotion and prejudice.

 

For a government that says that need will be the overwhelming determinant of access to government services and support, social investment will be a vital tool. It is therefore significant that Finance Minister Nicola Willis is also Minister for Social Investment. All eyes will now be on her and Budget 2024 to see how the policy is to be implemented, so that those like Meagher are no longer seen as “walking contradictions”.

 

 

Dame Jacinda Ardern observed after she stood down as Prime Minister that "Government isn’t just what you do, it's how you make people feel". While an interesting insight into how she viewed the purpose of government (and, some would argue, an explanation of why her government seemed focused as much on appearance as on substance) it is also nevertheless a very pertinent reminder to Christopher Luxon as he begins his term as Prime Minister. 

Ardern's message that policy change, however well designed or intended, ultimately only succeeds if people feel it is in their best interests is an especially relevant consideration for the new National-led government as it commences its term and embarks upon its “100 Day Action Plan”.

 

The Plan contains 49 actions which National says were key elements of the election campaign that it wants to get started on. It is a mixture of repealing legislation passed by the previous government – like the Auckland regional fuel tax, the so-called “Ute” tax, and Three Waters – and new policies like banning the wearing of gang patches, allowing the sale of cold medicine containing pseudoephedrine, restoring 90-day trials for all businesses, and extending free breast screening to those aged up to 74.

 

The overall impression the government is seeking to establish is threefold. First, that it is a government of action, getting on with the job it was elected to do. Second, that it means business by moving quickly to drop policies of the previous government that it did not support. And third, that it can be relied upon to carry forward the policy programme contained in National’s coalition agreements with ACT and New Zealand First. Overall, and consistent with the Ardern maxim, it wants to establish, if it can, the narrative that it is acting quickly and decisively in the public interest to get the country “back on track” so that people will feel better and more positive.

 

In that regard, it is doubtful that the new government’s first move, good policy though it is, to restore the Reserve Bank’s monetary policy focus solely on reducing inflation will immediately seize the public’s attention. It is by no means clear that National has yet convinced the public how important it is that inflation be curbed, if living standards are to rise, and that adjusting the Reserve Bank’s mandate is more than just a technical change to the operation of monetary policy.

 

The government’s plans regarding smoke-free legislation are an even more dramatic instance. For the record, the government’s plan is to “repeal amendments to the Smokefree Environments and Regulated Products Act 1990 and (associated) regulations”, not to abandon the policy entirely, as some health professionals who ought to know better, have implied. The amendments it is referring to came into effect on 1 January 2023, with the associated regulations being promulgated in late September. Most of the provisions do not come into full effect until 2024-25, and the restriction on the sale of tobacco products to persons born before 2009 does not take effect until 1 January 2027.

 

There is therefore plenty of time for the government to develop an alternative approach, consistent with Prime Minister Luxon’s stated commitment to continue to reduce smoking rates, if it is of a mind to do so. However, by focusing its early defence of the policy on the need to secure tax revenue from tobacco sales to help the government accounts, and to protect tobacco retailers from potential burglaries, the government immediately lost the argument, at least as far as the public was concerned. To most people, it just looks like winding back forward-looking changes, and nothing more.

 

As was demonstrated dramatically by the Ardern government during the pandemic, measures to protect the public health, no matter whether they work or not, always score highly. Conversely, measures seen to risk public health are dramatic losers, as the negative public reaction, and some of the ridiculous and extreme over-reactions in some quarters to the government’s smokefree policy, have shown. It has gifted its opponents – political and socio-medical alike – the easy line that the government cares more about tax cuts than protecting the public health.

 

Whatever worthy arguments the government may have in favour of its policy – and protecting the tax base is not one of them – it is not going to win over the public unless it can develop and implement alternative policies to reduce smoking rates within the time frame of the legislation it is now set to repeal. Of all the issues governments confront, health is the most sensitive and the most personal, the one people care greatest about. It is therefore the issue where the Ardern maxim has its highest relevance.

 

Establishing a positive public mood is an important contributor to political success, but it needs to be balanced alongside achievement. The last Labour-led government lost the public’s support when it became clear there was little in the way of substantive policy gains to balance its warm and caring approach. For the new National-led coalition, the other side of the coin applies. It will lose public support if it is seen to be too focused on its policy agenda as an end, rather than taking the public along with it, as it makes changes.

 

Getting the balance right – which Labour failed to do – will determine the success or failure of the Luxon government. Its early handling of the smokefree legislation shows it has some way to go in that regard, and that a long rocky road may lie ahead.

 

The last few weeks of coalition negotiations have been reminiscent of the Mainland Cheese advertisement on television, where the cheesemakers wait, and wait, for the cheese to say it is ready.

Now, with the imminent swearing-in of the new three-way coalition government, attention will shift from the process of its formation and the tedium that induced, to the job that lies ahead of it over the next three years. The new government comes to office at a time of heightened international tension arising from the ongoing war in Ukraine, the mayhem and carnage in Gaza, and the fallout from increasing super-power rivalry in our own part of the world. On the domestic front, inflation, high interest rates and an economy hovering just above recession are at the forefront of most peoples’ minds.

The new government will therefore want to hit the decks running, both to demonstrate the viability and credibility of the new coalition arrangement, and to introduce some of its promised immediate legislation. The principal item here will be the Mini-Budget incoming Finance Minister Nicola Willis has been long promising, but it is also likely the government will want to introduce other items of legislation that reflect the key parts of its agreements with ACT and New Zealand First.

That will not be as easy as it sounds. It is possible, but unlikely, that the new 54^th Parliament will be summoned to meet next week. The following week seems more likely. The ceremonies associated with the Opening of Parliament will take up most of the sitting time available during Parliament’s first week. These formalities include the Commission Opening by a panel of senior Judges, the swearing-in of Members, the election of the Speaker, the State Opening of Parliament by the Governor-General with the Speech from the Throne, and the moving of the Address-in-Reply debate in response.

That will leave just two sitting weeks before Christmas. Although the timetable will be very tight, it should allow sufficient time for the government to introduce some legislation, and to pass through all stages any legislation associated with the Mini-Budget especially if the government takes Urgency to extend Parliament’s sitting hours.

But again, things are not quite that simple. The new Ministers do not have any authority to direct their departmental officials to begin work on any of the new government’s plans, until they have been sworn in as members of the Executive Council early next week. This is particularly pertinent to the development of the Mini-Budget.

While it is highly likely that Willis has been working on the content of that statement since the election, she has been unable to seek any Treasury input into its content until she is formally sworn in as Minister of Finance. Although the content of the statement is properly her (and the government’s) political prerogative, it would be extraordinarily unusual – not to mention massively unwise – to proceed without Treasury’s advice and input. Allowing for Cabinet approval of the content of the Mini-Budget, it is unlikely to be introduced to Parliament before the end of the week after next at the earliest. It would be prudent (if a little symbolic given the time available) for the government to then refer any legislation associated with it to the Finance and Expenditure Committee for what would only be the briefest and most perfunctory of consideration, before being passed through all its remaining stages in Parliament in the week before Christmas.

The Mini-Budget will be the government’s first big challenge. It must get it right, so it cannot contain any errors, or loopholes that will be subsequently discovered. This puts additional pressure on Willis, her staff, and officials. Aside from its content – likely to be pared back anyway from the scope initially foreshadowed – the Mini-Budget will be an early test of her credibility as Minister of Finance. Not only the public, but also the financial markets, will be watching in critical judgment, and their broad reaction will help frame the way in which the government is perceived as its term unfolds.

Other key aspects of the government’s legislative programme are less critical at this stage. If ready, they can be introduced to Parliament before the Christmas recess, then referred to the relevant select committees for consideration over the next few months.

Overall, though, the next few weeks through to Christmas will be a chance for new Ministers to demonstrate their capability and intent to the public, and to shape the political agenda for next year and beyond. The government will be keen to leverage off new Prime Minister Chris Luxon’s brand as crisp, competent, no-nonsense, decisive and in charge. Given its unique make-up – New Zealand has never had a three-way coalition government before – all three parties will also be keen to show they can make the arrangement work.

Although the Labour and the other Opposition parties will not be all that relevant to the political process in the lead-up to Christmas and the foreseeable future beyond, the pre-Christmas Parliamentary sitting will provide an opportunity to assess what sort of an Opposition they will be. It will be interesting to see how quickly they adapt to the role of holding the government to account and exposing any shortcomings, and how effective they will be.

After a long political year, and a hectic time in Parliament before Christmas, politicians might be forgiven for looking forward to a decent summer break to recharge their batteries. However, they are almost certainly going to be disappointed – Luxon has already made it clear he thinks Parliamentarians have too long a summer break. He wants things to resume much earlier in January than has been customary.

So, after weeks of political radio-silence where nothing much appeared to be happening, we now seem set for a period of frenetic political activity. The relative quiet of the last few weeks is at an end.

 

 

Over 2,500 years ago the legendary ancient Chinese Taoist philosopher Lao Tzu observed that “a journey of a thousand miles begins with a single step”.

This week Labour began its journey of a thousand miles towards political rehabilitation. Its first step was the correct one to endorse Chris Hipkins as party leader. To do otherwise would have been extremely foolhardy.

Only Hipkins has the mana to manage a battered and bruised Labour Caucus as it begins its long journey to recovery. There is no-one else in the Caucus with the capability of doing that. Hipkins’ retention was the sensible and obvious move, and the fact it was carried out with a minimum of fuss is a positive for Labour.

Similarly, with the elevation of Carmel Sepuloni to be the new deputy leader. While doubts remain about her policy record in government, her confirmation ends the awkward position of 2020 and 2023 where Kelvin Davis was passed over to be the Deputy Prime Minister, while remaining the party’s deputy leader. Sepuloni’s appointment has resolved that and is a vote of confidence in her.

The unanimous endorsement of the Hipkins/Sepuloni team sends a clear message that they will be the duo to oversee Labour’s rebuild, in sharp contrast to the turmoil of Labour’s 2009-2017 period in Opposition when it churned through five different leaders. However, that is not to say that this will be the pairing that takes Labour into the next election.

What happens next will be largely over to Hipkins. While he says he intends staying in the job for the full Parliamentary term, he could hardly have said anything else at this stage. What is more likely is that over the next eighteen months to two years he will quietly reassess his situation and long-term aspirations. It would be no surprise then to see him follow the pattern of other former Prime Ministers and decide to step down from Parliament altogether, at or before the next election.

But as with every step Labour took during its time in government things are never as quite straightforward as they might seem. In this case, the first positive step on the leadership was not matched by nearly as sure-footed a start to the wider question of what the party now stands for and how its future message and appeal to the electorate will be shaped.

Hipkins’ first statement – that Labour would be reviewing all its policies and starting from a clean slate position – was positive enough and the right line to take. But he quickly allowed himself to be trapped into having to explain whether that meant capital gains and wealth taxes – which he had ruled out only a few months ago – were now back on Labour’s agenda.

In short, he made a hash of the explanation. Instead of saying Labour was beginning a ground-up review of all its policies and that it was premature (and silly) to be talking about specific policies at this stage, before the review had even begun, let alone been completed, Hipkins “clean slate” line quickly became these taxes are back on the table.

And that creates huge problems for Hipkins – how can he credibly say these taxes are back on the agenda when Labour is in Opposition, when he so emphatically ruled them out a little while ago when in government? Even the CTU’s economist, usually amongst the most fanatical and uncritical of Labour’s supporters, has warned that before committing to new taxes Labour first needs to establish the case for them, something, by implication, it has not done so far. Instead, all Labour has done has been to give the incoming government a free weapon to continue to beat it with.

This is not to say that tax policy will not be a critical aspect of Labour’s review, nor that it does not need to address capital gains and wealth taxes as part of that. It does – the advocacy for such from future natural partners, the Greens and Te Pati Māori ensures that. But any moves in that direction should be the consequences of a wider policy programme (the Greens, for example, set out very clearly the specific policies they would introduce from the proceeds of a wealth tax), and not just a policy one-off the way Hipkins made them sound.

Nor does Labour need to rush this process. The early confirmation of its leadership gives Labour time and space for a thorough and careful policy review. In any case, the reality of Opposition means that Labour will not be politically relevant for the next eighteen months to two years (unless either ACT or New Zealand First feel compelled at some point to abandon the Luxon government), so it has plenty of time on its side.

In that period, alongside its policy positions, Labour also needs to review its personnel. Ironically, its election drubbing is a partial help in that regard. Half its Caucus now come from the party list, which means they can be replaced without the need for by-elections, should any of them choose to stand down. Already, Andrew Little has announced he will do so, and questions remain about the futures of Grant Robertson, Kelvin Davis, Willie Jackson, and others.

All these MPs could quickly go and be replaced by those next on the list – all first or second term MPs defeated this year.  But that highlights another of Labour’s problems. All those of talent from Labour’s 2017 and 2020 intakes are already in Parliament, thanks to this year’s list. Those next on the list and likely to return if current MPs stand down are unlikely to add anything to Labour’s firepower in Opposition.

So, as Labour’s thousand-mile journey begins, it will need to avoid being swept along by the political circumstances of the moment and show instead extraordinary patience and stamina. Only then has it a chance of success.

 

 This coming weekend the Annual General Meeting and Conference of the United Fire Brigades Association will take place in Wellington. It will be the largest such gathering in the organisation's 145-year history, with more than 600 delegates and observers attending.  

The United Fire Brigades Association represents the 86% of New Zealand's urban and rural firefighters who are volunteers. While Fire and Emergency New Zealand is the operational body responsible for the delivery of fire and emergency services, it is heavily reliant on the volunteers. Volunteer firefighters cover 93% of New Zealand’s land mass, including virtually all the area that has been at risk from recent adverse weather events.

 

To put the contribution of volunteers into perspective, 567 of New Zealand’s 647 fire stations are crewed entirely by volunteers, and a further 34 stations are crewed jointly by volunteers and employed firefighters. Only 46 fire stations, mainly in the four main centres, are crewed entirely by employed staff. The UFBA also represents airport fire services and other urban search and rescue services personnel.

 

I have the privilege of chairing the United Fire Brigades Association. However, by way of disclaimer, the comments in this column are my own views, and do not necessarily reflect those of the UFBA.

 

As the country recovers from the aftermath of the recent Cyclone Lola, and with the memory of the damage wrought by Cyclone Gabrielle earlier in the year still raw for many people, it is worth remembering that the bulk of the emergency response work to those events was carried out by firefighters, the vast majority of whom were volunteers. 

 

This is not new – firefighters have been the primary responders to civil emergencies for many years. In 2014 New Zealand's firefighters received a United Nations' commendation for their response to the 2010 and 2011 Christchurch earthquakes. 

 

Yet the myth persists that there is a vast network of separate civil defence workers out there who step into the breach whenever an adverse event occurs. Government agencies like the old Ministry of Civil Defence and Emergency Management, and the National Emergency Management Agency which replaced it, perpetuate the myth. There is no such standing civil defence army.

 

As we saw with the cyclones in the north and east of the North Island earlier this year, it was primarily firefighters – overwhelmingly volunteers – who responded to the civil emergencies affecting their communities. And it is volunteer firefighters who are often the first responders to other emergencies – like road accidents. Attending structure fires now accounts for only about a fifth of the incidents firefighters attend.

 

When, as Minister of Internal Affairs, I amalgamated the old Rural Fire Service and the New Zealand Fire Service into a single organisation – something first recommended by a Royal Commission in the wake of Ballantyne’s fire in Christchurch over 75 years ago but ignored by successive governments – I deliberately named it Fire and Emergency New Zealand to reflect the wider role firefighters have today.

 

Yet within the bureaucracy there has always been a belief in the need for some sort of overarching emergency structure to provide co-ordination in the event of a national disaster. Hence the retention for many years of the position of director of Civil Defence, now replaced by the National Emergency Management Agency, as an autonomous agency within the Department of Prime Minister and Cabinet. NEMA’s role is to provide “leadership and support around national, local and regional emergencies” and to provide information to local authorities to assist them in their own disaster preparedness.

 

But both NEMA and the local authorities lack any personnel capability to respond effectively to a national or local emergency. That is where firefighters come in. Under the changes I made in 2017, Fire and Emergency New Zealand has nationwide statutory responsibility for fire safety, firefighting, hazardous substance incident response, vehicle extrication and urban search and rescue. There is no need to invent another wheel to run alongside that.

 

Firefighters already provide the emergency response capability the country needs to deal with the range of adverse natural events that might befall it. We have seen that at work in the responses to the cyclones we have endured this year. The clear message from these has been that the speed of the response has been most critical, and the value of local knowledge was of paramount importance. Local need, not national bureaucratic leadership, drove the community response to what was happening.

 

What our emergency response services, especially our volunteer fire and emergency services need now is adequate resourcing and training to deal with the challenges increasing adverse weather events brought on by climate change are posing to the resilience of local communities. FENZ is best placed to respond to those challenges, but it must be adequately resourced to do so.

 

Bureaucrats locked away in the Beehive bunker, “providing leadership and support” in a time of emergency are all very well. However, a far more practical and productive use of their time would be ensuring that our firefighters, urban and rural, volunteer and employed – those who do the real work – have the resources and expertise they need, so that they can continue serving their communities the way they have done for the last 145 years. 

The essence of politics is often described as about the contest of ideas. But really the political process is primarily about the pursuit and retention of power. Without power, it is very difficult to promote, let alone implement, ideas, no matter how worthy they might be.

A good example of this occurred in Wellington last week when a high-level meeting was convened to consider the future of “Let’s Get Wellington Moving” (LGWM), a “vibrant plan” conceived in 2014 to “transform” Wellington’s transport future. It has been projected to cost around $4 billion over the next 30 years, with central government expected to provide around $2.5 billion of that amount. LGWM has been bogged down in controversy over some of its proposals for some time, and little progress has occurred. The National Party has expressed misgivings about LGWM and has confirmed since the election that as the incoming government it will not be supporting significant aspects of the proposal.

Against that background, the pathos of last week’s high-level meeting was obvious. It was called by the city’s Green Mayor and involved Wellington’s two new Green MPs, and one Labour MP, to work out a way to save LGWM. Given the changed national political environment, it was no more than a symbolic waste of time. LGWM’s future will be determined by the new government, not the Mayor and three local MPs opposed to the government. LGWM looks set to be the first of many issues over the next few years when the impotent pleadings of Wellington’s local leaders will run a distant second to the priorities of the National-led government.

In that regard, it is worth noting that that for the first time in almost 30 years, there is not a government Minister holding a Wellington city electorate, making it even harder for the city’s voice to be heard at the highest level. Over the years, Wellington has benefited from having local MPs as Ministers. Major projects like the development of the iconic national Museum, Te Papa Tongarewa, the upgrading of the city’s urban rail services, and the construction, after a century of delays, of the Transmission Gully highway north of the city would not have occurred without it.

Now, with the city facing even greater infrastructural challenges such as upgrading its aging water reticulation system and improving its seismic resilience, the city will probably need to rely on gaining the ear of incoming Finance Minister Nicola Willis, a list MP based in Wellington. Yet she was not part of the Mayor’s recent round-table discussion, a telling example of a lack of political nous, especially since she will have a larger say than the Mayor or any of the local MPs in determining the future of the LGWM project.

Along with the pursuit and retention of power, the essence of politics is also about the art of the possible, that is, recognising current reality and adapting to it. The awkward truth for Wellington is that while it shifted left at the recent election, the rest of the country shifted right. Wellington is now a political outlier and no amount of virtuous clinging to previously held positions is going to change that. Wellington’s leaders need to quickly come to grips with the new political realities and develop the pragmatism required to achieve at least some of what they want. Simply shouting from the sidelines about what “should” be rather than acknowledging what now “will” be, will leave them looking impotent and irrelevant.

Of course, our local leaders should be advocating for the city’s interests, but they ought to be focusing on what is achievable, rather than what they consider is desirable. As LGWM’s lack of progress over the years shows, there is a time when stalled idealism needs to give way to incremental movement on points of common agreement.

Although the winds of political change have rendered Wellington’s three electorate MPs irrelevant for the immediate future, they have created an opportunity for the Wellington City Council. The Mayor and Council should be well placed to become the dominant advocates for the city’s future, with the potential to be taken more seriously by the government than the sidelined local MPs. However, the chronic dysfunction that has plagued the Wellington City Council for about two decades now makes it unlikely that it could ever arrive at an agreed and coherent local position, let alone one that central government could address practically. A classic case of opportunity lost.

The latest revelations that there is a potential $1 billion blow-out in the Council’s long-term budget heighten the sense of financial crisis now surrounding it, which deals a further massive blow to the credibility of the Labour/Greens majority which has controlled the Wellington City Council for some time. So long as that perception remains, the new government, with its clear regard for fiscal rectitude, is even less likely to place much reliance on the Wellington City Council’s future spending plans.

Wellington will only get moving once it has a coherent and financially robust plan to put before central government. This will require much more realistic leadership than holding cosy little meetings between the Mayor and the city’s local non-government MPs to mourn the loss of LGWM as they want it.

It is the reality of who holds political power and who does not, and Wellington now looks set to learn that the hard way.  

In the wake of last week's election some have asked why no consideration has been given to a grand coalition between National and Labour to limit the influence of ACT and New Zealand First. After all, they say, grand coalitions have worked in other countries, so why not in New Zealand, given that the differences between the two major parties often appear so wafer thin?

 

The best current example of a grand coalition is in Ireland where the two main parties, Fianna Fail and Fine Gael, came together in 2020. But this is Ireland's first grand coalition and the reasons behind it are specific to Ireland’s history and circumstances which are not readily applicable to New Zealand.

 

Fianna Fail (the Soldiers of Destiny) and Fine Gael (Sons of Ireland) were formed in the early 1930s following Ireland's 1919-1921 civil war, and the country’s partition in 1922. Fianna Fail was formed by Eamon de Valera after he broke with Sinn Fein (the political wing of the outlawed Irish Republican Army). It favoured a united Irish state, whereas Fine Gael supported the Treaty with Britain that Michael Collins negotiated, and which had led to the establishment of the Irish Free State and Northern Ireland.

 

Since 1932 Fianna Fail has been the dominant party of government. Whenever Fine Gael has been in power it has usually been in coalition with Labour, or more recently, the Greens. Between them, Fianna Fail and Fine Gael have followed a remarkably consistent policy approach. For example, both Fianna Fail and Fine Gael-led governments oversaw Ireland's rise as the economic Celtic Tiger in the 1980s, and then its recovery from the 2008 Global Financial Crisis. The differences between them are far less ideological than existential, and are still primarily based on the events of 1922. Their common enemy throughout has been Sinn Fein.

 

But Sinn Fein has been on the rise in recent years, winning 36 of 160 seats in the Irish Parliament at the last election and becoming the largest party in this year's local Northern Ireland elections. The 2020 election left neither Fianna Fail nor Fine Gael able to form a government without including Sinn Fein, a step, given their history, that was too extreme for either to consider. It was therefore easier for them both to set aside a century's division over what happened in 1922 to form the grand coalition, than to contemplate letting Sinn Fein anywhere near power.

 

The history of National and Labour in New Zealand has been quite different, based on ideology, despite the wafer thin differences between them both today. National was formed in 1936 as an amalgamation of the conservative, rural Reform Party and the more liberal United Party to oppose what both then regarded as the socialist Labour government.

 

But over the years, a more comfortable pattern has developed, whereby Labour governments propose, National Oppositions oppose, and then modify once in government. Christopher Luxon's incoming government is likely to be no different in that regard. That pattern, despite reasonably frequent changes of government (there have been more changes of government here in the last 40 years than in Britain, Australia, or Canada) has left us in a generally stable situation.

 

That means there has so far been no reason for National and Labour to seriously consider working together, and every reason for them to keep on pretending their ideological differences are too great for them to ever think about doing so. (A War Cabinet formed between the two in 1940 to deal solely with war issues had lasted barely two years before National walked out in 1942.) While the move to MMP in 1996 introduced more diversity into New Zealand politics – over 100 parties have been formed under MMP but only 6 have made it to Parliament – the dominance of National and Labour has remained. Although their combined vote share at last week’s election was the lowest for over 20 years, none of the other parties in Parliament currently poses a numerical, let alone existential, threat to their duopoly. So there is no reason for National and Labour to consider working together in a grand coalition.

 

A grand coalition only became an issue in Ireland when a small party with a policy agenda neither of the major parties could accept won nearly a quarter of the seats in Parliament, and it seemed impossible to form a government without them. It would take a similar turn of events in New Zealand to make a grand coalition a possibility. But it is hard to see that happening any time soon. Although they are both parties on the rise, neither the Greens (10.6% of the party vote) nor Te Pati Maori (2.5% of the party vote) look likely to be winning around a quarter of the seats in Parliament in the foreseeable future. So long as they, or ACT and New Zealand First, continue to secure vote shares at around their current levels, there will be no shortage of potential coalition partners for National or Labour.

 

Therefore, like the Tweeedledum and Tweedledee of New Zealand politics they have become, National and Labour will happily carry on their own separate ways as they have done for nearly 80 years. Their staunch belief the differences between them are insurmountable and the lack of any real threat to the system they have established over the years give neither of them the incentive to ever consider a grand coalition.

 

 

 

The last National Party campaign leaflet received in my letterbox this week urged me to "Please party vote National". Unlike the bold promise of "A Brighter Future" under Sir John Key, or Dame Jacinda Ardern's positive "Let's Do This", National's message looked like more like a plea for help than a call to arms.

 

In a way, it summed up the whole election campaign. None of the parties – perhaps apart from Te Pati Māori, seeking to appeal to a distinct constituency – has offered anything substantially different from what is already happening. The election campaign has been far less a contest of ideas, than one of which grouping of parties dislike each other least but think they can manage the status quo best.

 

Labour’s campaign has focused almost entirely on what a National/ACT government might do. Its own achievements over six years in government have been barely mentioned. In part, this is because its delivery of the transformational approach Ardern promised in 2017 has been so abysmal, and in part, it is because Labour’s prospects of being able to continue in government have been diminishing for months now. Even this week as the polls show a slight improvement in Labour’s position, but still not enough to remain in government, the negative attacks continue.

 

National’s campaign has fluctuated from the quiet confidence of a party being a government-in-waiting two or three weeks ago, and not wanting to do anything to upset a seemingly unstoppable wave to power, to something far more hesitant after the own goal regarding New Zealand First. National now realises opening the door to New Zealand First was a major tactical blunder, hence its current panic. Its previous hopes of a clean National/ACT coalition have all but evaporated, and the prospect of New Zealand First attempting to once more hold the country to ransom looms ever larger. No wonder it is now delivering the plaintive and desperate "Please party vote National" message.

 

Key’s warning about the country waking up to “limboland” this coming Sunday now looks set to come to pass. While a National-led government of some type is still the most likely election outcome, it may take some time to finalise. New Zealand First has always delayed entering negotiations until the final election results have been declared. That will not be until November 3, meaning any talks involving New Zealand First could still be underway when the Port Waikato by-election occurs on November 25. If there is a prospect, depending on results on Saturday, of National and ACT not needing New Zealand First after the by-election, they may prefer to drag discussions with New Zealand First out until that time.

 

Ardern’s last-minute message to Labour supporters to “Vote for what you believe in” is far more ambiguous than Key’s blunt warning. She goes on to spell out in her video message the things that are important to her. But, given the current environment of an overwhelming mood for change, her message could encourage those who voted Labour for the first time in their lives in the 2020 pandemic election to cast their votes elsewhere this time around. While her message is closest to expressing a vision for the future that has been lacking elsewhere throughout the campaign, it is probably too little, too late to have a marked effect on Labour’s chances.

 

Labour’s negativity during the campaign and its indifferent record over the last six years inspires little confidence that a new Labour-led government can get on top of the cost-of-living crisis or restore economic growth. Despite a nearly 70% increase in public spending since Labour came to power there remains little confidence it knows how to improve critical public services in health and education.

 

Doubts about National’s tax policy and overall fiscal plans are detracting from its economic credibility. While polls still show National rates significantly higher than Labour on economic management and other key issues, its responses to criticisms during the campaign have reduced those rankings somewhat. In its favour, though, is its discipline. Unlike Labour, where numerous MPs have either dismissed its chances of victory or disagreed with Hipkins’ call not to introduce wealth and capital gains taxes, National’s MPs and candidates have remained focused and on-message.  

 

So, at the end of the campaign it looks like coming down to this. Labour wants your vote to keep National, ACT and New Zealand First out. The concessions it may have to make to the Greens and Te Pati Māori are secondary considerations. National just wants to be back in power and will do “whatever it takes” to get there. What sacrifices it might make to New Zealand First to do so are also unknown, but National says it will be able to manage them.

 

Both Labour and National have fallen into the trap of assuming voters see the world they way they do. They assume their coded warnings and messages to their presumed supporters about the risks of voting for the other side will be heeded in the polling booths.

 

But in an environment where the common theme seems to be a mood for change – however that is defined and whatever form it may take – and where the election campaign has been so staid, these messages and warnings may not be enough to secure people’s loyalty.

 

In the privacy of the polling booth voters may yet have the last laugh.