Can Ardern and co right the drifting ship?
When Jacinda Ardern announced her Cabinet reshuffle at the start of the week, one word that she used was particularly revealing: narrative.
This is a term that, primarily, political insiders use. It effectively describes whose version of events is carrying the day in the court of public opinion.
And Ardern used it to talk about why Poto Williams needed to be replaced as police minister. The public is worried about gangs and guns, and Williams simply did not seem to have the toughness or the urgency required in this new political environment.
Translation: it wasn’t working and looked bad, so we changed it.
Now there’s not necessarily a problem with this – politicians change things for little more reason than appearances all the time, but a problem can arrive when there are a series of things that so transparently look like they are just being changed for the sake of appearances.
Take the Budget – and the three monthly payments that max out at $350 for people earning $70,000 or less to help with cost-of-living pressures. It wasn’t nothing, but it wasn’t much and was trying to look like it was doing something about inflation. Then there was the Three Waters announcement in April to get rid of the bogeyman of ‘‘privatisation’’, which no-one was really worried about. Then there Williams’ demotion.
Now all of these things tried to fix political problems – and Chris Hipkins’ appointment as police minister is highly likely to be a good appointment – but some measures just seem a bit token.
This is now shaping as a key risk for the Government. The difference between government and opposition is agency. As the government you are the agent: you can change things and decide your destiny. Opposition leaders are ultimately just people: they have rhetoric, research and argument but little else.
Yet it feels like, when it comes to pressing domestic matters, the Government has partially surrendered what makes it different: its agency. Partly, this is because the issues are big and ultimately global in some way.
Inflation is being felt around the world, and, by the way, Reserve Bank governor Adrian Orr is mostly in charge of that. The spate of gun crime is as a result of Australia exporting criminals and a crime wave, shortages are the fault of global supply chains, interest rates a result of inflation. And of course all of these things are in large or small part blamed on Covid-19. There are limited things the Government can do about these.
The Cabinet reshuffle should inject fresh life into the ministry: Kris Faafoi’s retirement will now make room for the impressive Kiritapu Allan in justice. Willie Jackson’s appointment to broadcasting will make that space more interesting, although it appears there will be no change to the ill-considered TVNZRNZ merger. Kieran McAnulty’s appointment to associate local government minister is not before time and may help with Three Waters. Moving Speaker Trevor Mallard onwards will also help.
It is also likely a hangover from Covid19. Politicians – and Cabinet ministers in particular – are just knackered. For much of last year and early this year the focus for Labour was on doing what it had promised despite Covid, yet that has led to a lack of political agility.
There are now two sitting weeks remaining before the three-week winter recess, an annually mucky period for most governments. But Labour will have to seriously think about a more general political reset, especially in the economic space, when it returns.
A reactive sluggishness has set in, which seems to have grown a mind of its own. The best example this week was the decision to get rid of pre-departure testing for people coming to New Zealand. There will still be a lengthy declaration form to fill in (the purpose of which is also unclear) but testing has gone.
There were a couple of notable things here: the first was that the Government didn’t seem to think it was a big deal – but of course it was. The possibility of being stuck overseas is a pretty big risk and downer for travelling. And then there was the idea that it still served a useful sort of purpose – when it appeared obvious for months that it wasn’t really.
Pre-departure testing is a small example of the bigger political problem.
In the 1970s and 1980s New Zealanders were used to the sorts of privations, uncertainty and high costs that Covid has visited upon us. But except for housing, the public is not now used to it.
And so it is anyone’s guess how the public will respond to the historically mild, but recently harsh interest rate hikes. Or the fact that you can’t go to Bunnings or Mitre 10 and get some sheets of Gib for a project, let alone a bigger renovation. Or the fact that, each quarter, wages fall further behind the cost of living.
There is now the risk that Labour could preside over a remarkable combo – inflation and a recession. Thursday’s GDP numbers showed a contracting economy. Most likely the country is in a recession – which will be confirmed in three months.
Labour points to the low unemployment rate as a measure of success. It is, and we can expect the Government to continue playing hard on it.
But without some sort of political reset, the Government will continue to find itself in the same position that it did before the Budget: grappling with how to ease the cost of living without breaking the bank or pretending it has more control over it than it really does. Or that at the very least show that it feels people’s pain.
This was the line that Finance Minister Grant Robertson – who has been very upfront about the fact there are limited things the Government can do about cost-of-living hikes – was trying to tread with the Budget.
In March, the Government did did do something pretty substantial by slashing the fuel excise. Unfortunately, thanks to the continued uptick in global oil prices under continued pressure from the war in Ukraine, that has been gobbled up plus some. But imagine where petrol prices would be without the 25c reduction. At my local suburban petrol station a litre of 96 petrol is currently $3.40 but would now be $3.65.
National and ACT are now circling like piranhas, looking for each new bit of bad economic data, drawn to it like blood in the water.
As the situation worsens, the Greens will also get more into criticising the Government, although clearly that party will have a different prescription to National and ACT.
There are slivers of daylight for Labour: the PM is looking and sounding more relaxed and confident since coming back from overseas, and she will continue to travel this year, balancing out the domestic aspects of the job with realworld international issues as well.
She will likely travel to Europe in the next few weeks. If New Zealand can lock in a free trade deal with the European Union, it will further burnish her international credentials, even if trade policy has never directly decided an election.
None of this is to say the Government is being idle – far from it – but a lot of the things it is working on –climate change, Three Waters, Resource Management Act reform, the public broadcasting merger, social insurance scheme, health reforms – are not public facing, or the benefits won’t be felt for years. Economics is the main game.
Today’s Tauranga by-election – which National should win in a canter – probably won’t tell us much. Regardless of the result, there is now a clear and present danger of drift setting in for the Government.