Matthew Hooton: Still waiting for Jacinda Ardern’s ‘transformation’


It can’t be easy being part of the Labour base — the 600,000 left-leaning voters who stayed loyal right through the John Key and Bill English era, even during David Cunliffe’s 2014 debacle.

For nine years, the 600,000 dreamed of a Government able to be more ambitious on issues like housing, poverty, inequality and climate change than Key, English and even Helen Clark’s cautious managerialism allowed.

For the next three years they comforted themselves that Jacinda Ardern and Grant Robertson’s true plans were being thwarted by Labour’s failure to develop implementable policy over its nine years in opposition, by the assumed Winston Peters handbrake, and then by the immediate economic, fiscal and health emergency of Covid-19.

Four months ago, the 600,000 Labour loyalists rightly celebrated the historic election of Ardern’s majority Government, but again they have been let down.

The Beehive’s current message is that Labour must keep its goals on hold in deference to the roughly 500,000 former National voters who joined Ardern’s coalition in October.

Adding further insult is the Prime Minister’s Waitangi edict that her Government will not be “transformational” after all, but “foundational” instead. If the change in language is assumed to mean anything, it seems Ardern sees her mission as no longer to deliver change, but to lay the basis for it in the future. Thus, the importance of things like the new school history curriculum.

Ardern claims incrementalism leads to policy that sticks, but history is not with her.

Whether the anti-nuclear policy, the economic reforms, benefit cuts, good faith bargaining, Working for Families, interest-free student loans or Key’s tax switch, what makes a policy enduring is how long it is in place before the next change of government.

The policies that a Government procrastinates over until its third term are the ones most likely to be reversed. Ask English what happened to social investment or his last-minute 2017 tax reforms.

Since Ardern became Prime Minister, taxpayers have spent more than $300 million on working groups trying to develop the social-democrat programme Labour failed to shape in opposition. The permanent and left-leaning Wellington policy advice establishment has also been on hand.

If successive elections since 1993 have delivered a combined message, it is voters unequivocally rejecting small-government, free-market liberalism and endorsing the politics of kindness, pragmatic idealism, transformation or foundationalism — or whatever Ardern chooses to call standard Scandinavian social democracy on any given day. Her only excuses for inaction are now short term political considerations or lack of nerve.

Yet this week’s Budget Policy Statement (BPS) is again broadly one English, Steven Joyce or even Judith Collins could have happily produced. Echoing any of those three, Robertson’s big boast was that debt in 2034/35 will now be $60 billion lower than feared at the peak of the Covid crisis, or just 36.5 per cent of GDP — and perfectly respectable under the circumstances. With a tail wind, Robertson can expect his operating account to move into the black by the middle of this decade.

More extraordinary than that fiscal turnaround — for which Ardern’s Covid leadership can pretty much take all the political credit — is that she and Robertson plan to basically just bank the $60b.

In his BPS, Robertson announced new operational spending allocations of just $225 million a year compared with December, funded out of tax increases, and no increase to his $7.8b multi-year capital allowance through to 2024.

The Government’s fiscal prudence may please the half million National voters who joined Ardern’s coalition last year. But the 600,000 Labour loyalists might ask why, given Ardern was comfortable for debt to go $60b higher to face the Covid crisis, she won’t act with similar boldness to address the housing and poverty crises — or even the climate change challenge.

They could be forgiven for thinking the Ardern Government has defaulted to roughly the business-as-usual model of the last 25 years.

Hence, the Government remains sanguine about the effects of lower interest rates and money printing on house prices and inequality that it was warned about a year ago.

With Ardern now against houses getting more affordable in nominal terms but instead backing “sustained moderation”, Robertson’s so-called rolling maul of housing initiatives is picked to include little more than a further increase in the bright line test.

More radical ideas such as limiting how many houses investors can own or rating properties on their potential, rather than current use, are not on the table.

A rescue for first-home buyers through the repeal of the Resource Management Act and reform of consenting processes may take until 2025. Relatedly, achieving greaterefficiency in water allocation is now on the go-slow.

There will be no action on the Climate Change Commission’s advice this year, with the Government wanting until Christmas to consider it after another round of consultation.

In Ardern’s own area of personal responsibility as her own Minister for Child Poverty Reduction, the data expected on February 23 will most likely show stagnation, but will be more than six months out of date.

It may not be until February 2023 that we see the full effects of the house-price inflation and the destruction of low-paid jobs caused by Covid. By then it will be election year.

This year’s Budget is not Robertson’s last chance to make a difference on the issues he and Ardern say motivate them, and which Labour loyalists have dreamed of being addressed for so long.

After all, Clark and Michael Cullen’s landmark Working for Families was part of the second Budget of their second term. Ardern and Robertson will have one more chance in 2022 to make worthwhile their teenage decisions to commit their entire lives to politics.

But this year’s Budget is their second-to-last chance to do anything meaningful before they enter the slow erosion of their popularity and ability to act that afflicts all prime ministers in their third terms, including not just Key and Clark, but Jim Bolger and Robert Muldoon before them.

If Labour loyalists are hoping Ardern and Robertson get round to leaving a legacy in 2025 or 2026, they would do well to remember that whatever big moves are in those Budgets will almost certainly be repealed by an incoming National Government — however fantastical that notion may sound right now, and even if its leader may not yet even sit within its parliamentary ranks.

And then Labour loyalists will have to spend the following nine years again wondering what might have been.

– Matthew Hooton is an Auckland-based PR consultant.

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