Chris Hipkins is testing the patience (and allegiance) of every centre- left voter. We may be now only a few months out from the election, yet Labour is continuing to refuse to say where it stands on a wide range of important issues. It is now claiming a need to see this week’s Budget numbers before putting forward its own agenda. That’s absurd.
For the past two and half years, Labour has been claiming it cannot take any positions on the key issues facing New Zealanders. Now it has plucked out of the air an alleged need to first see what the coalition government is proposing in its last Budget before the election. This is putting the cart before the horse. Is Labour so afraid of its own policies – and so fearful of its inability to defend them – that it has to keep its agenda under wraps until the very last minute?
Any Opposition worth its salt has two main jobs (a) to oppose on reasoned principle what the incumbent government is doing, and (b) to propose alternatives, and make a case to the public that it is a competent government-in -waiting. Instead, Labour has repeatedly refused to propose anything of substance. The public may have been suffering through a chronic cost of living crisis and now, a fuel crisis – but Labour long ago shut up shop.
This week for instance, RNZ’s Ingrid Hipkiss asked Hipkins to explain how in the short term, Labour’s capital gains tax can possibly pay for Labour’s promise of three free doctors visits a year, given that it will take years – if ever – before the CGT begins delivering significant amounts of revenue. Hipkins kicked for touch, again. All will be revealed, in due time.
Sorry, but that’s not how democracy works. Political parties are supposed to engage in a contest of ideas over the whole three years of a parliamentary term. Instead, Labour is trying to stampede the electorate during the last couple of months before Election Day. In all likelihood, Labour is merely postponing its day of reckoning. It is also virtually ensuring that the election campaign will be about Labour and its potential coalition partners, and not about the government’s failures to deliver.
Escaping the straitjacket
Here’s something that Hipkins could be telling us about, regardless of the Budget numbers. Does Labour still support Treasury’s aim of reducing (a) Crown debt and (b) the size of government to below a 30 % ratio of GDP? These twin targets have long been the cornerstones of neo-liberal economic planning, given that the arbitrary 30% constrains what any government can do to address socio-economic inequity, and/or finance key infrastructural projects. These targets opens the door to privatisation.
Unfortunately, Labour has not broken away from the economic model that has held sway in this country for the past 40 years, despite the manifest failures of that approach. At best Labour merely wants to re-distribute the profits of neo-liberalism a little more equitably to those in need – while ignoring how this model keeps on generating hardship and need among more and more people. Will Hipkins dare to release New Zealand from what Bernard Hickey has called the 30/30 fiscal straitjacket? Hardly. As Hickey says:
The Treasury’s 30/30 rule of aiming to constantly reduce the size of Government and debt to below 30% of GDP is adhered to by both National and Labour. It is the Government’s ‘North Star.’ It will dominate in this Thursday’s Budget 2026 through spending cuts and restraint designed to put a sinking lid on the size of Government to meet an arbitrary target.
Under Grant Robertson, Labour willingly signed up to his “ Budget Responsibility Rules” that pledged to keep Labour firmly on the neo-liberal straight and narrow. Nothing has changed since. As a result, Labour really isn’t a centre-left party. It is a soft right-wing party.
India Comes Calling
Reportedly, India’s leader Narendra Modi is likely to visit New Zealand in July. Doubt still remains as to whether New Zealand’s free trade promise to invest $US20 billion in India by 2035 is binding, or merely aspirational.
One thing is clear: India needs foreign investment, because its own successful businesses are continuing to invest their profits abroad, but not at home. As Bloomberg News recently reported:
[Earlier this month]…chief economic adviser V. Anantha Nageswaran said that profits for the 500 largest publicly traded companies had grown by over 30% a year since the pandemic, “but still, our overall capital formation rates from the private sector have been disappointing.”
Nageswaran isn’t the only one complaining. Finance Minister Nirmala Sitharaman publicly wonders every few months why corporations seem so unwilling to invest. She has repeatedly pointed out that she’s lowered taxes, cleaned up banks’ balance sheets, tried to support consumer demand, spent public money on infrastructure — yet is puzzled why companies haven’t responded.
Hopefully someone – maybe Winston Peters? – will raise this issue with Modi when he visits here. Why is India expecting New Zealand firms to invest in India when for the best part of a decade, India’s own corporates have lacked the confidence to invest in their own country? Why is there such a reluctance?
The [Indian] private sector’s reluctance to invest is attributed to high political risk, with companies estimating that local political risk is too high and seeking to diversify geographically to escape New Delhi’s control.
Did our negotiators assess that high level of political risk before signing this country up to a $US20 billion investment promise within the recent free trade agreement? We can call it an aspirational target – they don’t – but as things stand, New Zealand has signed up to help to bridge the capital investment gap from which India’s own firms in their wisdom, have chosen to walk away.
Failing the test
Back to our own political risks of investing in Labour – sight unseen –as an alternative government. Right now, Labour MPs and party hopefuls have too much time on their hands. How else to explain this week’s revelation that Labour’s prospective candidates were being asked whether they’d rather fight a hundred horses the size of ducks, or one duck-faced creature the size of a horse? Basically, that’s how Labour’s finance spokesperson Barbara Edmunds came to describe Finance Minister Nicola Willis as “a duck-faced horse.”
Once this remark had been leaked to the public, Edmunds apologised. However, the really instructive response came from Hipkins. Think of all the things that Hipkins could/should have said, but didn’t. He could have said:
- Barbara Edmunds has already apologised to Nicola Willis, but as the leader of the Labour Party I would also like to offer my apology to Nicola. This is not who Labour is.
- Labour does not judge women – or anyone else – by their appearance.
- A few years ago, Jacinda Ardern was subjected to vile criticisms based on her appearance. We opposed that strongly then, and we do not condone it within our own ranks. Etc. etc.
Instead Hipkins grudgingly described the incident as “pretty regrettable” and told the party faithful to be more careful in future :
“I’ve said to all of our MPs and candidates, it’s a very good reminder that every event is a public event.
Right. So be careful to share your demeaning personal attacks selectively, and only among people you trust. Truly, voters on the centre left are being given every reason in November to cast a protest vote, or simply to stay home.
Rely on the old man’s money
Hat tip to Paul Krugman for linking on Substack to this excellent cover version of the old Daryl Hall/John Oates hit song, which offers a topical image of rich folks on Budget Day:
High and dry, out of the rain
It’s so easy to hurt others when you can’t feel pain