Over the past 36 hours, Christopher Luxon has been doing his best to portray the centre-right’s plummeting poll numbers
as a mark of virtue. Allegedly, the negative verdicts are the result of hard economic times, and of a government bravely
set out on a perilous rescue mission from which not all of its MPs will be coming back alive: “What we’re here to do
isn’t always easy and nice, but we’re here to make the tough and necessary decisions...”
Right. Tough and necessary decisions like a $3 billion tax handout to landlords. Like cutting the access that hungry
kids have to school lunches. Like raising the cost of public transport for children and young people etc etc.
Perhaps someone needs to tell Luxon that when poll numbers go bad, its not a good idea to suggest to people that they’re
too fickle and soft to grasp the government’s higher mission. In reality, the fact that those bad poll numbers are
coming so early in the government’s first term would suggest that the public grasps only too well what this government
is doing, and is increasingly opposed to it.
None of this seems to be making a dent in Luxon’s superiority complex. Less than a year ago remember, Luxon was claiming
that New Zealand had turned into a “negative, wet, whiny and inward looking country.” Basically, we’re not good enough for him. We really need to shake
our ideas up, and stop whining to the pollsters.
So far though, the public has been given plenty of reasons to complain. The Luxon government has shied away from making
any tough and necessary decisions about the environment, about climate change, and the loss of bio-diversity. Instead,
it has pandered to polluters, to the fossil fuel industry and to mining interests, which have been promised access to
Crown land. It is promising to build more and bigger roads, while cutting access to electric vehicles.
In similar vein, the Luxon government has tilted the balance of power even further in the workplace and in the housing
market, in favour of employers and landlords. So far, Luxon’s government has taken no “ hard” or “necessary” steps to
address climate change, to make farmers pay their way on global warming and waterways pollution, or to reduce social
inequality.
At the same time, it also doesn’t appear to have a single positive policy idea in its head. All it seems able to do is
to scrap, cut, abolish, repeal, and defer - and hope that something or other will arise from the rubble. None of this
gives the public any reason to think that this government is on its side, during these hard economic times. If anything
as Bernard Hickey says, the government’s austerity policies are only serving to make the recession deeper, and longer lasting than in other comparable countries going through their own post Covid adjustments.
Luxon talks a lot about his government doing what it was elected to do. Yet it has a little or no mandate for the
programme it has been pursuing for the past five months. During the election campaign, did anyone hear a peep about the
scrapping of the smokefree legislation? That’s been the least of it.
Essentially....at the last election, the National Party sold the public a menu, but ever since it has proved itself
incapable of making a meal. On social and economic policy, Luxon is following an agenda largely devised by the ACT
Party, which won only 8.6% of the vote at the last election. On Treaty issues, Luxon is deferring to David Seymour and
to Winston Peters, who seems obsessed with taking revenge on a Maori renaissance that left him behind 40 years ago.
Mind you, when National does make a substantive decision that’s all of their own making, you rather wish they wouldn’t.
Long after this government is history, we will be regretting the day that Finance Minister Nicola Willis decided that
second hand, unfit for purpose Cook Strait ferries would be good enough for this country’s most vital internal link for
trade and tourism.
Finally....but National really knows how to run an economy, right? Not so much, actually. Nearly a decade ago, the rest
of the world concluded that cutbacks to government spending and other forms of financial austerity were a road to
nowhere. Today, the disastrous Tory government in the UK is the only other remaining true believer in the austerity
gospel. This year, as our recession has deepened and unemployment is tipped to rise, Luxon, Willis and the rest of the
Cabinet brains trust have decided that this is an ideal time to actively throw thousands more people out of work.
Worse probably lies in store. As this column recently pointed out, the NZ population is ageing rapidly, and developing
chronic, multiple, and costly health needs. Yet rather than expand capacity, the government has imposed further cuts of
$105 million on an already stretched public health system. It has frozen overtime and deferred signing
contracts....thereby driving even more of our trained specialists and nursing staff overseas in search of more stable,
and better paid options. All of this in order to finance a round of tax cuts and handouts to landlords that will deprive
New Zealand of the revenue it needs to meet those rising health needs in future.
And so the coalition clown car careens onwards, full speed towards the May Budget.
Footnote One: Although this week’s poll was only one poll, there is little reason to think of it as an outlier. At this point, both
ACT and New Zealand First must be mulling their options. Under MMP, junior parties commonly face a grim future if they
remain yoked to an unpopular governing party.
From the outset, Seymour has been pursuing a path of critical independence from National - but this path will be al but
extinguished in a year’s time, when Seymour officially steps into the role of deputy PM, and becomes more directly
linked to the National Party programme. At that point, one survival option could be for Seymour to mount a take-over bid
for the leadership of the centre-right.
If anything, the immediate outlook for New Zealand First is even worse. In a year’s time however, Peters will have more
room to carve out a different path. He will have ceased to be the deputy PM. After the midpoint of 2025, Peters will be
relatively free to blame the government’s unpopularity on the loss of his own wise counsel and stewardship. NZF’s
survival will require it to run hard against National.
In sum, now is the easy part. Neither of the future survival plans of his junior partners bode all that well for
Christopher Luxon. If his government occasionally looks dis-united at present, we – to quote Bachman Turner Overdrive –
ain’t seen nothin’ yet.
Footnote Two: Good to see that National’s no nonsense policies on crime have stopped ram raids.
Footnote Three : Reportedly, rents are rising at an annual rate of 8.3%. On Trade Me estimates, that’s an extra cost on average of about $2,600 a year. Roughly speaking, about half the
population are renters. They would therefore need to get an extra $50 back in the tax cuts, merely to stand still with
the rate of rent inflation alone, not to mention other cost of living impacts. Moreover, for many families living in
metropolitan areas, the loss of transport discounts (for children and young people) will wipe out whatever they may
stand to receive from the tax cuts.
Footnote Four. In a brief interview on Breakfast TV yesterday morning, Luxon five times mentioned the “mess” his government has
allegedly inherited from the Labour government. Over the past 36 hours, Willis and other Cabinet ministers have repeated
the same refrain. It is pure spin, warmed over from last year’s election campaign.
In reality last year, the international rating agencies maintained New Zealand’s sky high credit rating. Last August
Fitch endorsed New Zealand’s AA+ credit rating, while praising the country’s “robust
governance standards”:
The 'AA+' ratings reflect our view that the [Labour] government's commitment to return to surplus will put gross
government debt/GDP on a downward path in the medium term, despite more near-term fiscal expansion. Macro-financial
risks arise from high household debt and a recent widening of the current account deficit, in the context of
already-high net external debt, but the risks are manageable, given sound macro management.
Similarly, and in mid-October last year, Standard & Poors Global Ratings was reported as saying that the country's AA+ rating, which was upgraded in 2021, reflected the [Labour] government's handling of the
pandemic, low debt, discipline and economic growth, and there was no reason to change. “New Zealand’s excellent
institutions, wealthy economy, and moderate public indebtedness” would balance out any risks associated with the
country’s current account deficit, high levels of external and private-sector debt and volatile property prices, over
the next two years.”
All up, that isn’t a recipe for a “mess” or a rationale for resorting in panic to draconian austerity measures. Last
year, we were doing better than most of our peers. S was forecasting that New Zealand’s deficit would narrow over the next three years, and that net general government debt
would stabilise at a level that was “modest compared with that of most highly rated sovereign peers.”
Meaning :there is no evidence for Luxon’s claim that (under Labour management) the deficit, or public debt, or the
borrowing programme was out of control. In fact, the rating agencies seemed far more worried that the cancellation of
Three Waters would throw the costs of water infrastructure projects back onto local councils already saddled with
sizeable debt burdens. The “inherited mess” excuse simply doesn’t stand up to the readily available evidence.Significant Roads to Nowhere
Given the depressed political climate, this old song from the ‘80s seems more and more timely:
For similar reasons, the latest single by Annie Clarke (aka St Vincent) from her new album All Born Screaming, also rings a bell: