Thursday 9 February 2023

Prime Minister Chris 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. To succeed, his policy reset had to do more than just take presently unpopular items off the government's agenda. It had also to reassure wavering voters that Hipkins is leading a genuinely different government from that which preceded it. 

To achieve that, Hipkins had to convince voters his reset was a genuine, substantive policy shift, not just shifting some difficult issues off the immediate agenda, and that they will not resurface after the election, albeit under different guises.


Hipkins’ biggest problem remains convincing a sceptical public that the same Ministers who have promoted the government’s unpopular policies, can now be trusted to not only withdraw them, but also not to restore them, in the event they win the election. After all, these are the same Ministers who championed and staunchly defended the government’s unpopular policies, many of which were their pet projects, until he became Prime Minister. They are also the Ministers who airily dismissed public criticism of what they were doing as simply ill-informed.


The Prime Minister announced the first, and by his own admission, the most significant parts of the reset yesterday. Some unpopular policies have been dropped, but most have merely been deferred to another day.


The biggest casualty is the outright scrapping of the proposed RNZ/TVNZ merger. This has been a key feature of Labour’s programme since 2017, consistently and increasingly ferociously promoted by Broadcasting Minister Willie Jackson. Without it, he and the former Prime Minister frequently argued, Radio New Zealand would struggle to survive. To the general public, the policy was never a core issue, with criticism limited largely to media and academic circles. Therefore, dropping it was a low-cost option for the government, with minimal immediate public impact. But it has severely dented Jackson’s credibility. To soften the blow and appease Labour’s influential Maori caucus, Jackson was, incredibly, promoted by Hipkins to the government's front bench in last week's reshuffle.


The deferral of the proposed income insurance scheme came as no great surprise. The ambitious and fundamentally worthy plan was first announced in February 2022. But its design and development was taking considerably longer than originally envisaged, and its original 2025 implementation date was looking more and more unlikely. Increasingly strong opposition from  business interests and the National Party has left its future was looking very uncertain, even if the government is re-elected. Deferring it at this stage “until economic conditions improve” was therefore a logical decision.


The decision to kick proposed hate speech legislation - even the watered down version announced late last year - off to the Law Commission makes sense, on the face of it. But the government's proposals, including the original highly controversial plans promoted by former Justice Minister Fa'foi in 2021 are already under consideration by the Law Commission, so it is hard to see what is new here. The government simply seems to have at last recognised the deep unpopularity of its plans and found a convenient receptacle in which to park them.


Hipkins has always said his prime focus is on the reducing the cost-of-living burden on New Zealand households. He says the reset was about giving the government the space to do so. For the foreseeable future, though, the canning of the RNZ/TVNZ merger, the indefinite postponement of income insurance, and the sideways shift of hate speech law will have no discernible impact on household budgets, although they do remove some awkward items from the government’s political agenda.


The cancellation of the biofuels mandate, which required the promotion of biofuels to reduce greenhouse gas emissions and would have led to increased fuel prices for consumers will have a more direct impact on households. Like the extension of the fuel excise tax reduction, it will keep fuel prices lower for longer, but at the expense of the environment. With dramatic, damaging adverse weather events due to climate change becoming more frequent, these moves will be seen by many as inconsistent with the government’s long-term climate change mitigation strategy. In the present circumstances, it will  increase cynicism about the sincerity of Labour’s climate change commitment. Auckland voters, cleaning out their flooded houses and properties at present, may well be scratching their heads about how seriously the government now takes climate change.


By far the most controversial issue facing the government at present is Three Waters. Many were hoping the Prime Minister, having dropped Nanaia Mahuta as Local Government Minister, would have dropped Three Waters altogether. While that was never going to happen, Hipkins’ announcements regarding Three Waters’ future were vague and ambivalent. Yes, it needed changes, he said, but things could not go on as they are, so he has asked the new Minister of Local Government to look at ways Three Waters could be modified, and further announcements could be expected later on. That is hardly likely to satisfy Three Waters’ most vehement critics. Nor will it persuade more moderate doubters that the government really understands, or is even interested in, the strength of local feeling there is in preserving local control of water assets.


Hipkins has said there will be more policy refinements over coming weeks, but that this tranche represents the most significant ones. Given that, yesterday’s announcements are more a tinkering of existing policies than a bold reset. With the exception of the RNZ/TVNZ merger, most seem to set to resurface if Labour is re-elected in October. Hipkins’ assurances that dropping them gives the government the space it needs to address the cost-of-living pressures New Zealand households are facing currently is all very well. But in the absence of specific policies to do so, that claim is just a convenient excuse.


What is now clear is that this reset was really about giving the new Prime Minister an excuse to push some of the government’s more unpopular policies away into the back room until later.


Since 2017 the Labour government has consistently been better at selling its plans than achieving them. Nothing much seems to have changed so far under Hipkins. Like so much of the government’s programme, his policy reset promised far more than it delivered.





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