These are the perennial political questions that every incumbent government has to face. Do people feel better/wealthier/more secure now than they were three years ago? Not much, it seems. In last week’s quarterly IPSOS poll, the Labour opposition was judged to be a better manager of the cost of living and inflation, and came in only slightly behind National on its perceived ability to manage the wiuder economy. Normally, these are seen as the core strengths of politicians on the centre right.
True, National is still seen to be better at handling crime/law and order issues, but the IPSOS poll indicates that this is a declining concern for the public (down to 21% from 25% in May) and is a major priority only by the 65+ generation. Currently, most people seem more afraid of the gang in the Beehive than they are of the gangs on the motorbikes.
Overall, these numbers suggest that a significant amount of buyers remorse exists out there, and its running at an unusually high level for a first term government still a month shy of its second birthday in office. Not all of National’s poor polling numbers can be blamed on Christopher Luxon’s personality deficit, even though some of his critics in caucus would like to think otherwise.
Charm is an elusive quality in politics. Yet it is hard to see how swapping out Luxon for Nicola Willis would broaden National’s appeal to voters. (In a bygone era, this would be like replacing Jim Bolger with Ruth Richardson.) Besides, if National is looking around for people to blame, what responsibility is the current Finance Minister taking for the government’s sinking poll numbers on the cost of living, inflation and economic management?
The core problem, surely, lies with the policies, not the personalities. Voters can see that ACT’s policies are driving the government agenda and – for decades now – the ACT Party has only ever been a minority cult, no matter how much money Corporate New Zealand has thrown behind it. Only a handful of New Zealanders warmed to ACT policies in opposition, so it shouldn’t be a surprise that the public don’t like being governed by them.
Labour M.I.A.
Even so, Labour should not be feeling complacent. As I’ve argued before, Labour’s current polling is almost entirely a measure of the public’s dissatisfaction with the government. On this basis, Labour should be polling ten points ahead of National. It will need to a cushion of that size heading into election year 2026. Yet by choosing to be solely a receptacle of complaint, Labour is running the risk that next year’s election campaign will about its own belatedly released policy positions and fractious partners. It should be braving that prospect now, and pushing confidently onwards.
After all, that IPSOS poll showed a yawning gap (60-39%!) of respondents think that this country is headed in the wrong direction. People are pining for a credible alternative, but Labour has taken the phone off the hook.
Footnote: To take one of any number of examples, Labour refused yesterday to commit to supporting wider access to free dental care. “We haven’t got to the point,” deputy leader Carmel Sepuloni told RNZ, “where we have policy on this.” Surely, the fact that there isn’t yet a formally ratified election year policy shouldn’t be stopping Labour from saying where it stands – on principle – on the problems that voters are facing, every day.
False economies
Inflation is a bit like the herpes simplex of economics, in that it never seems to go away. Yet wasn’t the surge in inflation and subsequent cost of living crisis caused by the Covid support schemes, by global supply chain blockages, and by oil shocks and grain shortages that have since either disappeared entirely, or been severely diminished? Yet inflation and the cost of living remain stubbornly problematic. How come?
Well…one inflation driver continues to be the predatory pricing by supermarkets, which Willis plainly has no stomach for tackling in any meaningful way. A further cause of inflation was pinpointed by Bernard Hickey in a brilliant column yesterday. In essence, the same government that was swept into power on a wave of “revulsion” at the cost of living, is now perpetuating that crisis by displacing many of the functions of central government onto local councils, and onto private sector providers – who are recouping their outlays via higher rates and user charges. These are both inflationary, Hickey says, and they’re ensuring that ordinary punters get no respite from the cost of living crisis.
Faced with such inflationary pressures, the Reserve Bank is lowering interest rates slower than it would otherwise have done. Yes, the government books may look better now that central government has offloaded some of its costlier commitments, and reduced some of its needs for borrowing. But voters as taxpayers, ratepayers, water users etc continue to be as badly off now as they were when the Covid-era programmes were being painfully unwound.
As Hickey explains:
Initially, inflation fell through 2024 because global oil and food prices had fallen in the previous 18 months. But it has come surging back in 2025, thanks to another burst of global food price inflation and a surprising cascade of new and higher Government and council fees, fines, rates and charges.
This administered inflation is immune to higher interest rates and was caused by the Government’s late-2023 decision to cut capital spending and budget deficits in order to take pressure off inflation and mortgage rates. Instead, this ‘belt-tightening’ created the exact opposite of reducing inflation. Imposing new fees and rates on consumers to replace Government-funded capital investment has added the worst surge in administered inflation in 35 years, as the Reserve Bank pointed out in its Monetary Policy Statement last month.
More of the same is coming down the pike:
A whole raft of new entrance fees, road tolls, congestion charges, water charges, road user charges, user-pays levies, fines are set to be imposed in the coming years as the Government sticks to its strategy of replacing debt-funded public investment with private-funded investment that is serviced by user pays charges.
And finally, the trap closes shut:
In turn, this raises questions about whether the Reserve Bank can avoid running interest rates tighter than necessary and in a way that forces it to raise unemployment to compensate for a structural and ideological decision by the Government. Workers who lose their jobs because of Government cutbacks would be then doubly punished with higher interest rates and an even harder job-hunting task because of the way the Reserve Bank Act forces the Reserve Bank to prioritise CPI inflation of around 2%.
Hard to see why people would want to re-elect the people ( Nicola Willis, David Seymour) responsible for fostering this situation, which is largely a product of their own ideological fixation on reducing the size (and role) of the state. It has nothing to do with what they inherited. This mess has been, and continues to be, all their own work.
Living in a trance
In the 1950s and into the early 1960s, Ferin Husky had a string of country music hits that spilled over onto the pop charts as well – “Gone” “Wings of a Dove” etc. Bob Dylan and the Band even recorded a version of “Gone” on the Basement Tapes.
This next, fairly obscure album cut was recorded late in Husky’s career, but it has since found a cult following. The Aquarium Drunkard website once described it as “narcotic noir.” Love seems to have turned the singer into a sleepwalking zombie. Kids, be careful with this stuff. According to the comments thread, this song made a brief appearance in a film Husky once made, called Hillbillies in a Haunted House, which sounds awesome.