Momentum is everything in politics, but it is very fragile. There are times when unexpected actions can produce big shifts and changes in the political landscape. In 2017, for example, the Labour Party appeared headed for another hefty defeat in that year’s election until the abrupt decision of its then leader to step aside just weeks before the election. That decision changed the political landscape and set in train the events which led to Labour being anointed by New Zealand First to form a coalition government just a few weeks later. 

Likewise, momentum can be stalled by happenings that are unexpected. A political leader on a roll may suddenly find themselves caught off-balance by a loose comment or action from a colleague that requires their full and immediate attention, and detracts from their momentum. National leader Christopher Luxon may well have felt that way in recent days. 

As the six-months anniversary of his rise to the leadership of the National Party came round Luxon had reason to be more than satisfied with the party’s progress under his leadership. After all, it had gone from electoral basket-case, where any thought of winning an election had seemed fanciful, to being, according to recent opinion polls, at slightly better than even odds to form a government after next year’s election. 

An important aspect of Luxon’s performance to date had been the perception that the internal divisions which had previously plagued the party were over, and that National’s sole focus now was on persuading people it was ready to lead a government next year. With the mounting cost-of-living crisis, polls were showing it was now winning the critical “best economic manager” argument. Momentum was very much in its favour. 

But then came the United States’ Supreme Court decision overturning the landmark Roe v. Wade abortion decision of 1973. Because of Luxon’s personal views on abortion there was initial interest in what he thought of the decision which he was able to bat away with assurances that, his personal views notwithstanding, there would be no change in New Zealand’s abortion laws if he were to become Prime Minister next year. 

Unfortunately for him and his political momentum that was not the end of the issue. An ill-advised social media comment from a National MP, was hurriedly removed, causing a former National MP to react angrily. Suddenly, the abortion issue was centre-stage in New Zealand too, in a way it had not been for many years, and Luxon found himself having to defend National’s position as though an immediate attack on New Zealand’s abortion had been foreshadowed. 

For an increasingly besieged Labour Party this was a godsend. Its political momentum has all been downhill in recent months. Neither the Budget nor the Prime Minister’s overseas tours appeared to be doing it any political favours, and the former Covid19 Minister’s admission that last year’s lockdown went on for too long confirmed the gnawing feeling that the government was getting out of sync with voters. 

The Deputy Prime Minister went into overdrive, claiming that Luxon was not telling the truth on abortion. According to Grant Robertson, not only would abortion laws not be upheld, but also a number of other progressive social changes would be at risk, if Luxon became Prime Minister. The lack of evidence for any of these claims did not matter – what mattered more to Labour was putting National on the back foot, having to defend itself, rather than attack the government for its shortcomings. 

And, for the time being, the strategy has succeeded. National is once again having to defend itself against accusations of disunity in its own ranks, sowing doubts once more about its reliability if in government. While the particular issue of the social media post is a storm in a tea-cup which will die down soon, if not already, it has exposed a vulnerability in National which Labour will continue to exploit, especially if its own political fortunes continue to deteriorate.

Probably the most annoying thing for Luxon is that he risks being damned if he does, and damned if he does not when dealing with the issue. Were he to have done nothing and ignored the social media post he would have been accused of both supporting the post and the Supreme Court decision, hence his decision to have the post quickly removed. But in doing so, he has incurred criticism that he is intolerant of diverse views being expressed within National (somewhat ironic in the circumstances.) 

Overall, this diversion was the last thing Luxon and National need right now. The party has been making good progress in recent times – endorsed by the more than solid Tauranga by-election result – and talk of a potential National-led government next year is becoming more serious. Luxon is off on his first overseas trip as Opposition Leader to look at various policy options that might be applicable to New Zealand. 

His absence should have been the time for National to consolidate its recent progress, ahead of what Luxon might have to say on his return. Now, though, it is more likely to be a time of making sure no more National MPs commit faux pas that disrupt its progress. And, all the while, like the angry political vulture he has become, rather than the amiable and relaxed figure he used to be before the polls turned sour, the Deputy Prime Minister will be waiting to pounce and scatter the entrails. 

While real, the knock to National’s momentum over the last week, is nowhere near terminal, and should not lead to over-reaction. At the same time, National should be mindful of what happened to it in 2019-20 when wheels loosened and fell off the chariot at regular intervals, not just stalling but ultimately completely reversing its political momentum at the time. It cannot afford a repeat in 2023, if it wants to be a serious contender for government.

 

 

 

While much of the focus this week has understandably been on our forthcoming inaugural Matariki Day, it is also National Volunteer Week. This is the time we recognise the contribution volunteers make to so many aspects of our communities. In many ways, the coincidence of its timing with Matariki is appropriate – both are about acknowledging people, what has been happening, and looking forward to the future. 

Volunteering is a long-standing aspect of our national character. It has often been joked that when a group of New Zealanders gets together the first thing they do is form a committee to undertake some local project or other. The community working bee is a legendary example. 

A recent report prepared by the Department of Internal Affairs has highlighted the contribution and depth of volunteering in New Zealand. According to the report, just under half the population – 49.8% to be precise – are regular volunteers with organisations in their local communities. It is estimated around 115,000 not-for-profit organisations benefit from, or rely on, the services of volunteers, and the estimated economic value of their contributions is around $4 billion annually. 

As chair of the Board of the United Fire Brigades Association, the organisation which represents volunteer firefighters, I know first-hand of the contribution volunteers make to the operation of emergency services in New Zealand. Our emergency services simply could not operate without them. There are more than 690 Volunteer Fire Brigades throughout New Zealand, comprising around 85% of the total national firefighting force, and covering more than 90% of our landmass. The Department of Internal Affairs report assesses the contribution of volunteer firefighters being worth around $660 million a year – slightly more than the annual budget for Fire and Emergency New Zealand. 

The sacrifices volunteer firefighters make to their family lives and their work to keep their communities safe are extraordinary and the service they provide extensive and varied. The wider impact that has on their personal lives and their families is too often overlooked and unacknowledged. National Volunteer Week is an occasion to recognise those sacrifices and to thank them – and their families – for being willing to serve their communities. 

Attending structure fires is a smaller part of firefighters’ work these days – more likely, they will be providing first responder services at motor vehicle accidents or undertaking wider emergency services work. For example, volunteer firefighters were at the forefront of search and rescue efforts after major civil emergencies like the Christchurch and Kaikoura earthquakes. Volunteers from the Picton and Blenheim Fire Brigades were prominent in the response to last weekend’s horrific road crash in their area. 

The important thing about all our volunteers is the selfless nature of their contributions. Their dedication to the task at hand is their primary consideration, whatever the circumstances. From volunteer firefighters to those working in community facilities, the theme of service to the community is constant. So much so, that much of what we take for granted in our local communities would not happen, were it not for the input and contribution of volunteers. 

Yet our volunteers seek little by way of recognition in return. Some years ago, when Minister of Revenue, I tried to introduce a small tax rebate to recognise voluntary time contributions. My rationale was that those who donate money to charitable organisations can claim a tax rebate on their donations, so why not apply that same approach to those who donate their time to serving the community? My plan failed, not because of any political opposition, but because volunteers objected, saying that such a scheme would compromise the spirit of volunteerism. They were insistent service should remain its own reward. 

Although I understand that, I nevertheless remain firmly of the view that we do not do enough to recognise the contribution volunteers make to our communities. When I was an MP, I set up the annual North Wellington Voluntary Service Awards to recognise voluntary service in that part of Wellington which I represented. That awards scheme is still in place, and to date we have presented 187 awards, marking several thousand hours of voluntary service to the local community. They are a small, but significant, way of recognising our local volunteers and thanking them for their efforts. 

While the Department of Internal Affairs’ report highlighted the varied contributions of volunteers to many aspects of the lives of our communities, it also drew attention to some looming challenges. Although volunteer involvement remains at a high level, for a variety of reasons, the number of people coming forward as new volunteers is shrinking, posing future challenges for services heavily reliant on volunteers. 

The United Fire Brigades Association has been working with Fire and Emergency New Zealand on various ways to attract the next generation of volunteer firefighters, and to inculcate the spirit of volunteerism more widely in school leavers and young people generally. We continue to encourage young men and women, urban and rural, who have an interest in serving their communities to think about joining their local volunteer fire brigade. 

The strong commitment to volunteerism across so many strands of New Zealand’s activity speaks volumes as to the type of people we are. National Volunteer Week is an opportunity to acknowledge that variety of contribution across the country, to thank our volunteers for their quietly determined efforts on our behalf, and to encourage them for the future. 

Whatever they do, and wherever they do it, our volunteers are our national lifeblood. We should all take the opportunity this National Volunteer Week to thank them, whenever we can, for the unstinting service they provide.

 

National has dismissed Chris Hipkins’ appointment as Minister of Police as “window dressing for the public.” According to its Police spokesperson, Mark Mitchell, National considers Hipkins’ appointment owes more to the fact he is the government’s “fix-it” man, being brought in to tidy up a portfolio where things have not been going well, than a signal of real change, because Labour is still “soft on crime.” By contrast, according to Mitchell, National is “deeply passionate about” taking a strong response to current mounting gang activity. 

He may have a point. After all, the Prime Minister’s announcement of Hipkins’ appointment focused more on the need to get the policing “narrative” (euphemistic Labour language for its spin message) back on track, than new policy initiatives to deal with the law-and-order issues people are currently concerned about. The one message she should have taken on board from all the criticism of the government’s perceived soft approach to policing over the last eighteen months is that people are tiring of the “narrative” – they simply want serious, workable solutions which will keep them and their families safe. 

Unfortunately for National, its own policy response to what is happening at present has fallen into the same “window dressing” trap. Its “narrative” is focused more on reinforcing its credentials as tough on law-and-order, both to keep its own more conservative voters onside, and the even more hard-line ACT Party at bay. The centre piece of its recent policy announcement was to ban completely the wearing of gang patches in public, because that would prevent gangs from swaggering, and intimidating the public the way they do at present. 

But the wearing of gang patches is already banned in government buildings, courts and hospitals, with apparent minimal effect, so it is hard to see a more widespread ban achieving much more, let alone being complied with. In any case, the public will quickly tire of the Police rushing up to corner dairies to arrest gang members wearing their patches while they buy cigarettes or convenience foods. 

National also wants to make it illegal for a gang member with serious convictions to access firearms or be on a property where firearms may be. While it sounds good and tough, it is essentially reactive, and will be very difficult to enforce. Equally problematic are National’s proposed dispersal, notices, whereby a gang member (presumably not wearing a patch and therefore so much harder to identify correctly) can be ordered to leave a public area for up to seven days. Most impractical and unenforceable of all are National’s proposed Consorting Prohibition notices (reminiscent of apartheid-era South Africa’s notorious banning orders) whereby a “known gang offender” can be banned from associating or communicating with other gang members for up to three years. 

The superficiality and potential unenforceability of these measures is breath-taking. Together, they look like “window dressing” in the extreme, designed more to bolster National’s law-and-order credentials than make an effective impact. 

While Labour has clearly misread the depth of public anxiety about the increase in gang activity and the threat to public safety random drive-by shootings pose, the answer does not lie in kneejerk, neo-populist solutions of the kind National is now proposing. In what may have been intended as only a throwaway line, The Prime Minister, earlier this week, said the government would welcome any ideas National has about resolving the current gang problem. It might therefore be a smart move now for Hipkins, early in his new role, to call National’s bluff, and invite Mitchell to join him in trying to develop a durable and workable bipartisan response. 

Having railed for so long at what it regarded as Labour’s inadequate response, “deeply passionate” National would find it very difficult to turn down such an invitation and still be taken seriously. For its part, Labour would have to swallow its “we always know best” pride if it were to listen to other options. Sadly, both parties have spent too much time looking in their respective ideological mirrors to ensure they have the “right” positioning on the issue, and not enough time listening to the public about what it would like to see done. 

Meantime, the drive-by shootings, and other gang activities look set to continue while the politicians throw names at each other. While that carries on, little in the way of meaningful solutions is likely. Yet Hipkins and Mitchell can show real leadership by setting aside their differences and working constructively together to reach purposeful solutions. But only if they are both of a genuine mind to do so.

 

 

       

 

When he announced the government’s response to the recent independent review of PHARMAC Health Minister Andrew Little boldly declared that “the days of the independent republic of PHARMAC are over.” His words were warmly welcomed by many patient advocacy groups, tired of battling for years to get timely access at an affordable price to the medicines their clients required. However, he will need to tread very carefully to ensure that his words do not come back to haunt him. 

Until the late 1980s, there were few controls on the prices charged by pharmaceutical companies for making their medicines available in New Zealand. The government simply paid the ever-escalating medicines bill, and it was no surprise that, as medicines became more complex and sophisticated, pharmaceutical expenditure got completely out of control. 

In 1988 the government took the dramatic temporary step of removing laxatives and antihistamines from the list of fully subsidised medicines. The inevitable ensuing public outcry allowed the government to attempt to frame the public argument that the cost of pharmaceuticals had risen out of control and needed to be reined in, while at the same time ensuring that New Zealanders had reasonable and affordable access to the medicines they needed. 

Although the public did not buy the government’s argument, the then Department of Health agreed to appoint an official whose primary task was to negotiate better pricing arrangements with the pharmaceutical companies. However, that move quickly proved ineffective. So, in 1993 the government established a stand-alone agency, PHARMAC, to determine based on independent clinical assessment the medicines that should be funded, and then to negotiate with suppliers the price to be paid. In its early years, PHARMAC launched what it described internally at the time as a “jihad” against the pharmaceutical companies and their pricing policies, which probably cost New Zealand in terms of medicines availability over the medium term. 

PHARMAC not only used its funding policy to determine which medicines would be made available, but also negotiated directly with the pharmaceutical companies on pricing. At the same time, PHARMAC’s establishment neatly removed the issue of medicines supply from the sphere of direct political influence. This enabled successive Ministers of Health to say that decisions about medicines availability and funding were made on the best available independent clinical advice, without and involvement from politicians. The government’s role was now limited to setting PHARMAC’s annual funding level. 

Nearly thirty years on, though, creaks were beginning to appear in the PHARMAC model, so a review was timely. With more new and innovative medicines becoming available to treat more conditions, PHARMAC was increasingly struggling to meet the rapidly growing patient demand. Even though funding levels have been sharply increased under the present government, many patient groups still felt they were still missing out, and that New Zealand was slipping behind comparable countries in the provision of medicines. 

The changes recommended by the review, most of which have been accepted by the government, have been intended to refocus PHARMAC in a kinder, gentler way, more in tune with the medicines’ environment of today, than the 1990s. Hence the Minister’s bravado comment and the general support of the various patient groups for the changes that have been announced. 

However, these changes will still mean medicines’ acquisition and supply is a matter of rationing, with PHARMAC and its clinical advisers still determining which patients’ needs and medicines should have greater priority within their funding resources. The demand for new and innovative medicines, which will become ever more expensive as they become more sophisticated, will almost certainly intensify. Unless this government and future governments continue to double the PHARMAC budget every four to five years, which in these straitened financial times seems unlikely, the situation will quickly return to where it was. 

Unless, of course, the government’s longer-term plan is to fully fund all medicines that are clinically approved for New Zealand, no matter what their cost or comparative efficacy. There would then be no need for PHARMAC at all, as all that would be required for a medicine to be available in New Zealand would be clinical approval by Medsafe. The government would be left to just pick up the tab and pay whatever price the pharmaceutical companies demanded. And just like it did in the 1980s, the government’s pharmaceutical bill would quickly balloon out of control. 

There are no present signs this is the government’s intention, which means that PHARMAC will continue to play a rationing role, albeit from a higher budget baseline. Inevitably, over time, situations will occur where it is forced to make choices, or where it needs to stand firm in the face of a public clamour for a medicine that may not be justified on efficacy grounds. The public grumbling about PHARMAC will gradually return. 

The missing link in all this which has been overlooked in the revamp of the national Medicines Policy has been establishing the optimum range of medicines that should be available in New Zealand, consistent with our national health priorities and the health needs of our population. It would then be for PHARMAC and the government to jointly work out the best way they could be procured and funded, and the relative needs of New Zealanders met fairly and equitably. 

Without that, medicines policy looks set to continue to operate in a vacuum, with PHARMAC, however kinder and gentler it may be portrayed, still left to make the hard decisions. In that environment, proclaiming that “the days of the independent republic of PHARMAC are over” seem set to come back to haunt this Minister and his successors as hollow, inaccurate and simply wrong. 

 

Time may well prove Christopher Luxon right in his boast that National will form the next government because of Labour’s handling of the cost-of-living crisis. But it is far too premature, and borders on smugness, for him to make that claim today – almost eighteen months before the next election is due. 

Over the last few weeks, according to a rolling average of the polls, the National/ACT bloc has edged slightly ahead of the governing Labour/Green grouping. However, that edge has not yet translated into a clear majority for National and ACT, even though the polls are showing them far more likely to be able to form a government than Labour and the Greens. While the trendlines all year so far have been showing National steadily rising and Labour falling away, it is still too early in the election cycle and the margin too slim between the respective blocs to draw any conclusion other than next year’s election looks likely to be a close contest. 

Just as Labour’s triumphalism in the wake of its stellar 2020 election result started to wear thin as Covid19 lockdowns dragged on and on in the latter months of 2021, so too will any perceived early gloating by National that it is on its way back to power. Both parties need to remember that election results reflect the judgement of voters, not the self-assessed performance of political parties. 

Therefore, when Christopher Luxon next claims Labour’s handling of the cost-of-living crisis is set to deliver National the reins of government next year he needs to appreciate that will only happen if voters want it to happen, not because National says it should happen. While voters certainly have little tolerance for, or patience with, governments they feel have let them down or failed to perform, they also have an equal intolerance for political arrogance or parties drawing premature conclusions on their behalf. 

Right now, the sharply rising cost-of-living is hurting many households across the income spectrum. Drawing attention to the way in which the government has dealt with the crisis so far, and what other steps might be taken, are legitimate political responses, but using it the way Luxon did was a little gauche. However, that paled into insignificance compared to the fierce over-reaction of the Minister of Finance. 

Grant Robertson took excessive umbrage at Luxon’s brag, saying he was using a serious political issue, affecting many hundreds of thousands of people, for his own narrow political advantage. Robertson conveniently and hypocritically overlooks that Labour took the same approach before the 2017 election with its attacks on the housing crisis it saw had developed under National. Indeed, it is hard to recall a situation where politicians across the spectrum have not tried to use difficult national situations to their own political advantage! 

But by his over-the-top response to Luxon, Robertson has simply escalated the issue and given credibility to National’s position that there is a serious cost-of-living crisis, which Labour has no answer to. It is just like 2017, when the more intensely National denied Labour’s claims of a mounting housing crisis, the more convinced the public became there was one, and that the then National-led government was not up to dealing with it. 

In both situations, the best thing the government parties could have done was ignore the Opposition’s claims, not stoke their credibility by attacking them with the ferocity both displayed. Labour today, like National then, has fallen into the trap of thinking that demolishing the other side’s policies is a credible substitute for their own failings in government. 

But, as far as voters go, they are more interested in what a government is doing about a problem, than its criticism of the Opposition. While Luxon’s comments will have come across to some as cocky and premature, Robertson’s heavy response will have confirmed for others that the National leader hit a raw nerve. Had Robertson kept his mouth shut, what Luxon said would probably have been forgotten by now. But instead, the loquacious Finance Minister has ensured his government’s handling of the cost-of-living crisis will remain high in the public mind right through till the next election, whatever may happen in the meantime. 

This week’s TVNZ/Kantar poll showed 63% of respondents think the Budget cost-of-living package should have included beneficiaries and superannuitants. That, coupled with Labour dropping a further 2% in its own support level should be sufficient warning to the government that it presently faces an uphill battle persuading people it is doing enough on the cost-of-living front. Dissatisfaction with its performance, and the gap between the parties, will only increase if Labour’s response to criticism of its performance continues to be turning on the critics rather than addressing the issue. 

But National must be careful too. While the political trendline is moving in its direction, it is not yet cemented in place. There is a fine line between firm, determined opposition giving rise to mounting confidence of a successful outcome at the next election, and complacency and arrogant over-confidence. National will quickly come unstuck if voters see it assuming an election win is all but assured before any votes have even been cast. The party should not forget that voters, in New Zealand and elsewhere, have an uncanny way of reminding political parties it is they, not the parties, who decide election outcomes. 

While Luxon’s determination to see National re-elected to government is commendable, and the turnaround in the party’s fortunes since he became leader impressive, he cannot allow his enthusiasm to get ahead of itself. Throughout the next eighteen months his maxim needs to be “more haste, less speed”.

 

 

The popular test of the success or failure of Grant Robertson’s fifth Budget will be its impact on the soaring cost of living. 

In today’s climate little else matters. Because governments come and governments go – about every six to seven years on average since 1945 – getting too focused on their long-term fiscal aspirations is often pointless, especially so at a time when middle-income households and below are far more worried about just continuing to make ends meet. The main mission of this Budget, therefore, had to be addressing that concern. 

In that regard, Robertson has taken a huge gamble in the Budget – predicating his moves on Treasury forecasts about inflation and wage growth. According to Treasury, wages will outpace inflation from the start of next year, although they do add the caveat to their forecasts that inflation could be around for a little longer. On that basis, the usually cautious Robertson has gambled that his household assistance packages can come to an end by then. Yet over the years Treasury’s forecasts have invariably been overly optimistic, which creates a massive political risk for Robertson.   

As predicted in my Stuff column before the Budget, both the 25c a litre suspension in the fuel excise tax, and the 50% subsidy on public transport fare have been extended, but only for two months. Once they expire, a special $350 cost-of-living payment will be made in three equal tranches (equivalent to about $27 a week) to around 2.1 million people earning under $70,000 a year, but not those receiving the Winter Energy Payment. 

However, when the fuel and public transport subsidies and the cost-of-living payment end in November. rising costs will then be set to quickly gobble up any of the gains made by households in that time, since inflation is unlikely to have fallen significantly by then. If Treasury’s predictions are correct, Robertson might just have done enough to bridge the gap until wages get ahead of inflation again, but even that is highly dubious. However, if Treasury has got it wrong, then not only will Robertson’s gamble have failed, and households face a bleak Christmas, but the government will pay the price politically at the election next year. 

As foreshadowed, the Budget’s commitments on health are bold – a record $13.2 billion new expenditure over the next 4 years. Much of this is structural and will not be immediately visible to the public – $550 million to clear District Health Board deficits; $168 million over four years to establish the Māori Health Authority, for example. But there are two areas where the additional spending will be visible and welcome – the extension of the low-income earner subsidy for Dental care from $300 to $1,000 per person, and the $191 million boost to PHARMAC over two years to fund more new medicines. 

However, the trade-offs beyond the immediate support measures in the health funding announcements (the increased Dental subsidy and more funding for PHARMAC) and the longer-term, structural, and operational changes the Budget outlined are unlikely to impact upon enough people to offset rising costs of living through into next year. Having previously ruled out tax cuts and increases to family support payments like Working for Families, Robertson has effectively backed the government into an unwelcome corner. It is not clear what cards he has left to play. 

At the same time, he has, however, set out the challenge to National and ACT to indicate what areas of spending they would cut if in office, but unfortunately for him he has set some easy targets for them. For example, for about the same amount as he is allocating over two years for the merger of Radio New Zealand and Television New Zealand, he could have extended the public transport subsidy and the fuel excise suspension for almost four months, rather than two, which would have provided more immediate relief for stressed households. 

In his Budget speech Robertson acknowledged that “the here and now matters but so too does tomorrow.” The burning question now arising will be whether Robertson has got the balance right and done enough to reset Labour’s political compass for the next election. The immediate answer is no – his gamble on inflation starting to go away by November and currently struggling households apparently to get by without more government help after then seems overly optimistic and doomed to fail. 

Nevertheless, the government deserves credit for its commitments to improving and upgrading the public health system and its announcements earlier this week about meeting its climate change obligations. But the comparatively modest (though fiscally expensive) moves to help New Zealand households through the cost-of-living crisis seem likely to push those achievements into the background. Politically the Budget will not have kick-started the government’s flagging fortunes, but nor will it have sealed its fate either. 

That will come in November when Robertson’s lolly-jar finally runs dry.

 

 

     

 

 

Words matter, especially when uttered by politicians. History is littered with examples of careless or injudicious words uttered by politicians coming back to haunt them, often at the most awkward of times. 

During the 1987 election campaign, when electoral reform was a hot issue, Prime Minister David Lange promised to have a referendum on the electoral system if his government was re-elected. The pledge certainly delighted electoral reformers, but stunned his colleagues, because Labour’s election policy promised no such thing. Because of internal divisions on this, like so many other issues at the time, Labour MPs were to spend the next three years fudging and avoiding the Prime Minister’s commitment, with the referendum eventually being held during the term of the National Government which followed. 

National’s Jim Bolger caused a similar problem over superannuation in 1990 with his categorical “no ifs, no buts, Labour’s surcharge will go” promise. While Labour’s unpopular superannuation surcharge was repealed in 1991, National’s replacement was even harsher. And who will ever forget American Presidential candidate George Bush senior’s 1988 promise “read my lips, no new taxes” which was quickly overturned once he became President. Words matter, and voters not only remember what was said, but take unkindly to later attempts to redefine both the words and the context in which they were uttered. 

When she rejected the Tax Working Group’s recommendation for a capital gains tax in 2019 Prime Minister Jacinda Ardern was honest and unambiguous. “We have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.” To her credit, she has stuck to that position subsequently meaning that, given National’s historic opposition to capital gains taxes, the issue is off the political agenda until at least the next Labour-led government after Ardern. 

While the Prime Minister’s honesty on the capital gains issue was refreshing and did not attempt to quibble with words the way some of her predecessors did to justify policy u-turns, the same does not necessarily go for her position on wealth taxes. At first glance, her initial response was similar to her stance on capital gains taxes. 

When asked about a wealth tax in a television debate during the 2020 election campaign, the Prime Minister said unequivocally "I have made my position and the Labour Party position absolutely clear. We have ruled it out. This is not up for discussion. It's not in play. There is no need for the hypothetical. It won't happen" and "I won't allow it to happen while I am Prime Minister." 

As with capital gains, that should have been the end of the matter. The Prime Minister had made her call, and like their predecessors in 1987, her colleagues had to live with that decision.

Indeed, the issue only reared its head again because of an awkward response from the Prime Minister to media questions about whether Labour would introduce a wealth tax in the light of work being done by the Minister of Revenue to ensure wealthy New Zealanders pay their fair share of taxes. Rather than bat the question away by referring back to her absolute 2020 comments, the Prime Minister curiously and clumsily answered by saying that the question was hypothetical because Labour had yet to develop its tax policy for the next election.

After nearly every commentator concluded this less than clear response meant Labour was clearly looking at a wealth tax if re-elected in 2023, the Prime Minister sought some days later to clarify her remarks, saying “I have no intention of introducing a wealth tax here in this term and we are doing no further work on it. Of course, we have always said our policy is not to introduce that and that is our position, nothing has changed.”

Rather than resolve the issue, the Prime Minister’s ruling out of a wealth tax for this term of Parliament only fuelled speculation. Whereas previously Ardern had ruled out a wealth while she was Prime Minister, now she was doing so only up until the next election, strongly implying that plans are afoot for something along these lines if Labour is re-elected.

Media commentary earlier this week suggesting that because the Prime Minister’s 2020 comments were a “blunder” she should not be held to account for them was not only utterly patronising but also evoked eerie memories of Lange’s 1987 comments. Worse, it suggested a new low standard of accountability is being set where it is not what a Prime Minister says that matters, but rather what they meant to say, or worse, what the media thinks they should have said, that counts.

It is unlikely this is what the Prime Minister intended. Having fluffed her initial response a couple of weeks ago, she was more than likely just trying to recover the situation. But if she really wanted to kill the wealth tax issue she should have taken a leaf out of her capital gains and 2020 wealth tax debate books and said simply “there will not be a wealth tax while I am Prime Minister.”

After all, words still matter, and as Churchill famously said, “the short words are the best and the old words best of all.” The Prime Minister should remember that, and that in the absence of simple and clear words people will often draw all manner of unwelcome conclusions.

There is still time for the Prime Minister to uphold her 2020 promise. However, the more she fudges doing so, the more people will become convinced there is a covert post-election agenda. For a government now swaying dangerously close to the ropes, that is amongst the last things it would want. But short, still unuttered, words could yet resolve that.