Govt still needs to beat the gloom
The Government’s school phone ban, which became official at the start of term two, was ridiculed during last year’s election campaign by some opponents for being trivial, and by more for being impossible.
It’s a mark of how entrenched beliefs can become over a short period of time that even a year ago the idea of banning devices which represent the perfected technological end point of personal distraction from classroom situations was as unthinkable as closing New Zealand’s borders and shutting down the economy seemed in early 2020.
Yet the early results of the policy implemented by Education Minister Erica Stanford, including schools which adopted the measures from the start of the year, have been overwhelmingly positive.
Principals have talked of playgrounds in a manner akin to conservationists describing the native birdsong returning to bush after a predator control project, as newly alive with chatter and laughter. Teachers and students have, occasionally begrudgingly, recounted better levels of concentration in class.
It’s one of a number of high-profile wins the Government has racked up since its first 100 days finished, including the return to “structured literacy”, a technical name for the novel idea of actually teaching children how to read. So why has its polling declined?
Last week a 1News-Verian poll and a leaked Talbot-Mills corporate poll showed the governing parties either neck and neck with, or falling slightly behind, the combined support of the opposition parties. The general trend sees National holding steady or falling, with ACT dipping, and NZ First falling perilously around the 5% threshold, which the party has never reached after each of its oneterm stints in MMP governments.
The obvious caveat to this gloomy scenario is that polls are not just merely a snapshot in time, but also a hypothetical one. An election will not be held today or, barring unforeseen catastrophe, at any point until late 2026.
For the Government though, the poll results increase the pressure on Finance Minister Nicola Willis’ first Budget, at the end of the month, in what are the toughest conditions to deliver a Budget since the early 1990s. That’s because the Government’s polling troubles cannot be put down to a lack of runs on the board.
That’s not to say it has all been smooth sailing. Prime Minister Christopher Luxon has struggled for clear air away from his coalition party leaders, reflected in his personal ratings. For Winston Peters and David Seymour, the trend suggests diminishing returns for their tubthumping on Treaty and race relations issues; perhaps because of public fatigue, or more simply because there are limits to the satisfaction to be gained from opening a speed camera fine from the New Zealand Transport Agency instead of Waka Kotahi. But the driver of the stalled polling is overwhelmingly economic pessimism, and the continued cost-of-living crisis. While some economic indicators have improved, there is no real let up in the public mood.
Christopher Luxon likes a “turnaround job” but by its nature inflation is very rarely turned around, only slowed, meaning that baked in price increases continue to wear on families and individuals until their own incomes rise; less likely with flatlining economic growth, shrinking GDP per capita, and rising unemployment.
This could help with the reception of the Budget, and its centrepiece income tax cuts.
Historically, tax cuts have underwhelmed the electorate. The $20-25 per week income tax cut that has become an almost mandatory fixture in New Zealand elections between 2005 and 2023 has much less real value (thanks, again, to inflation) than it did two decades ago.
However, the grind of price rises and high interest rates has worn on the public without even symbolic respite. While the amount of the tax cuts may be predictable, the reception from voters could surprise on the upside if it puts some distance between historical increases and real income.
There is still the question of how to pay for the tax relief. Spending cuts, via public service layoffs, have been well received by voters so far according to polling.
Willis has promised “fees and levies” will be part of the mix to recoup revenue, such as the previously announced increase in vehicle registration fees. The bind is that the broader the base of fee payers affected, the more revenue the government will recoup, but the less tangible difference there is between a user-pays fee and a tax increase. Targeted levies or taxes, for example confined to certain industries or sectors, could be passed on to consumers, exacerbating cost of living pressures.
The public’s window of tolerance for poor economic conditions has narrowed since the early 1990s. The balancing act for producing a Budget that can lift the public mood in the current environment will be extremely difficult. But, as New Zealand schools have shown this year, anything is possible.