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An Extraordinary Result

by Don Brash

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This year’s election is one for the history books: it was the first since MMP was introduced in 1996 which resulted in a single party being able to govern without the aid of allies.

What on Earth happened? In early 2020, the first Colmar Brunton poll of the year had National on 46% support, Labour on 41%, the Greens on 5%, New Zealand First on 3%, and ACT on 2%. Had those poll results held good until election day, the combined National-ACT vote, at 48%, would have enabled the National Party to form a government, with ACT’s support (assuming ACT continued to hold the electorate of Epsom). Labour and the Greens between them would have commanded just 46% of the vote, assuming the Greens did in fact get above 5%.

And that would not have seemed a surprising result. The Labour-led Coalition Government had achieved none of the goals it had set for itself in 2017.

The most obvious failure was in housing. The Government had promised to build 100,000 KiwiBuild houses over 10 years. In the first three years of the 10 year plan, fewer than 600 were built. House prices continued to rise at well above the rate at which incomes were rising, and the number of those on the Priority A waiting list for a home more than tripled from 4,054 to 17,493.

The Government had pledged to reduce net migration by 20,000 to 30,000 per year, in part to take the pressure off house prices, but net migration went up, from 54,150 in the year to October 2017 to 88,450 in the year to February 2020 (before Covid-19 arrived).

Another of the Government’s highest priorities, one for which the Prime Minister made herself personally accountable, was a reduction in child poverty. But six out of nine child poverty indicators became worse over the term of her Government.

The Government promised to waive tertiary fees to encourage students to enroll in universities and polytechs – a promise costing taxpayers many millions of dollars – but enrolments actually fell from 63,890 in 2017 to 61,790 in 2019.

The Government promised to build light rail from the Auckland CBD to the airport and absolutely no progress has been made on that – happily from my point of view: it always seemed like a crazily expensive way of getting a small number of people to the airport.

The Prime Minister declared that dealing with the challenge of climate change was this generation’s “nuclear free moment”, and promised to plant a billion trees over 10 years, to have all government vehicles electric by 2026, and have all electricity from renewable sources by 2035. To date, the planting target is woefully behind schedule (with just 4% of the target funded at this point), fewer than 1% of the Government’s vehicle fleet are electric, and the share of electricity produced from renewable sources has barely changed.

But the Labour Party won despite that record of quite dismal failure. What happened? Quite simply, a pandemic happened. That gave the Prime Minister the opportunity to do what she does best – emote. Day after day, the public saw the Prime Minister on TV expressing sympathy and urging the “team of five million” to hang in there. Day after day, she gave the impression of genuinely caring for the healthcare workers who were carrying the brunt of caring for those infected by the disease, and for the hundreds of thousands of people whose employment was suddenly at risk from the closure of our borders and from the enforced closure of many thousands of small businesses.

And I have no doubt that that sympathy was genuine. So despite umpteen egregious failures – to adequately test those most at risk at our borders, to provide sufficient PPE equipment to some healthcare workers most at risk, and to even ensure adequate distribution of ‘flu vaccine – the public overwhelming went along with perhaps the most stringent lock-down in the world. And this despite the Minister of Health himself breaking the lock-down rules not once but twice!

As the Government gained in popularity, National panicked. The caucus first dumped Simon Bridges as Leader and installed Todd Muller. Todd cracked under the strain and resigned. Judith Collins was suddenly thrust into the leadership with just three months to go to the election, faced with the almost impossible task of recreating National’s reputation for safety and stability.

Her challenge was compounded by some careless errors on the part of some of her associates – it’s hard to argue that National is the best party to deal with the economy when Labour was able to point out a $4 billion error in National’s projections – and the leaking to the media of an internal email criticizing her for the announcement of a policy relating to the Auckland Council. Ms Collins suggested that that leak – suggesting dissension within the ranks – cost National 5% of the party vote. Whether that was true or not, it certainly confirmed the view from outside that National was in some disarray, an impression further compounded by last minute confusion over whether the selection of the National candidate for the Auckland Central electorate had complied with the party’s own rules.

For New Zealand, the good news is that the Labour Party is able to form a Government without the need to accommodate some of the more loopy ideas of the Green Party.

But the bad news is that there is nothing about the policy platform of the Labour Party which suggests that the new Government will be up for the challenges New Zealand will face over the next three years.

The Prime Minister says she wants to help small businesses, and has proposed further loans for small businesses. But at the same time, she is waging war on small businesses by hoisting additional costs on them – a still higher minimum wage (and the minimum wage in New Zealand is already one of the highest in the world), five additional days of sick leave, a new public holiday, four weeks of compulsory redundancy and, perhaps worst of all, so-called “fair pay agreements”.

With the “hand-brake” of New Zealand First removed, the Government seems very likely to “solve” the Ihumatao dispute with the use of taxpayers’ money – thus opening again all previous “full and final” Treaty settlements when enough people demand that previous deals be set aside. And with a newly resuscitated Maori Party breathing down their neck, the political pressures to cave into any and all demands will be strong.

New Zealand would have faced a very challenging three years even had the National Party been able to form a Government. It will be even more challenging because they failed to do so.

‘The Labour Party won despite that record of quite dismal failure. What happened? Quite simply, a pandemic happened. That gave the Prime Minister the opportunity to do what she does best – emote. Day after day, the public saw the Prime Minister on TV expressing sympathy and urging the “team of five million” to hang in there.’

Dr Don Brash is an economist and former Member of Parliament. He served as the Governor of the Reserve Bank of New Zealand from 1988 to 2002.

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elocal Digital Edition – November 2020 (#236)

elocal Digital Edition
November 2020 (#236)

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