Recent polls have some speculating whether Chris Hipkins could lead the Labour Party back into Government in 2026 and condemn Christopher Luxon to being a one-term Prime Minister.
The possibility is real because the gap between the Coalition and the opposition has roughly halved since the election. They still command a majority but it is getting closer.
And it gets worse. That majority could vanish altogether if New Zealand First were to fall below the 5% threshold, even if the Act Party picked up all of the lost votes.
You can see why the Labour Party has been fairly happy to stick with their leader and embrace his particular brand of cautious centrism. They really may be in with a chance.
Now, I know it is silly to speculate about the next election when the previous one was less than 10 months ago … but let’s do it anyway.
My thinking is that a National-led coalition is most likely to win a second term. This is largely due to economics, rather than politics, and I’ll explain.
Hipkins recently told Newsroom that last years’ election was a vote for change, rather than a vote for the coalition. This is a commonly held view and is probably right.
Household living costs went up more than 20% during the pandemic. While that wasn’t Labour’s fault, it was in Government when it happened and copped the blame.
One possible explanation for the Coalition’s lackluster polling is that they have not been able to fix everyone’s economic troubles overnight. Instead, things have been getting worse.
Unemployment is rising while interest rates refuse to budge. This means some are not just struggling to pay their mortgages, but also worrying they might lose their home completely.
Those who run businesses are likely feeling the recessionary pinch more than they were six months ago, and households are learning that most inflated prices never come back down.
A final wave of inflation has also hit in unavoidable places: massive rate increases from local councils, higher insurance premiums, and ever rising rents. Tax cuts are small in comparison.
Voters can be impatient and quick to assign blame. National and its friends might not have caused any of these problems but they did promise to fix them…
Polling guru Carin Hercock, from Ipsos New Zealand, certainly thought economic problems could be responsible for negative views of the Government.
She said worries about inflation were falling elsewhere but remained “stubbornly concerning” for about two thirds of New Zealanders in Ipsos’ monthly Issues Monitor.
“This lack of movement may be a key factor impacting New Zealanders assessment of the current government performance, which remains comparatively low at 4.6/10,” she said.
A separate survey done by the company found one in four Kiwis were finding it difficult to manage financially, and 25% thought their standard of living would fall in the next year.
Respondents blamed this on the global economy and interest rates—as they should—but also on Government policies and excessive business profits. The survey ran from March to April.
It is not a big assumption to think that poor economic sentiment has been hurting National’s poll numbers as much, or more, than day-to-day dramas around controversial policies.
This might mean Labour’s relatively strong polling is something of a false dawn. Economic conditions could be very different when New Zealanders go back to the polls in 2026.
Treasury expects economic growth will be back, inflation will be on target, interest rates down two percentage points or more, house prices rising, and unemployment past its peak.
National and the coalition won’t have directly caused these outcomes but just as Governments get unfair blame, they also get unearned credit.
Prime Minister Christopher Luxon can campaign on having ‘fixed’ all of these problems and compare them to Hipkins’ brief stint: inflation at 6%, interest rates high, GDP flat, etc.
That could be a difficult attack to overcome. Although, voters may actually be more willing to consider Labour’s more progressive policies if they are not stressed out at home.
What could sink the Coalition is if the economy fails to pick up next year. If New Zealand’s recession drags into 2026, the chances of a one-term government will increase drastically.
88 Comments
While it's a cop out for a new government to blame the last government, in this case it's true.
Just like people who are getting hurt by plunging house prices, the real fault is not the fall, the fault lies back in the outrageous house price rises that came before.
We are in a bad situation as a nation, change will hurt.
Whenever the National party have formed a government it has lasted three terms and four for that of Holyoake’s. Labour on the other hand has only had Clark’s government of three terms and had two of only one term. That history though might not be much of a marker given the introduction of MMP and the associated vagaries of any coalition government. If this coalition can hold together and be returned next time in good order then likely National will again achieve three terms. The problem for the government now is that they have a great deal of unwinding and fixing on their plate and only two & a half years left to settle that down and evidence progress. On the other side though Labour has its own problems internally with a new leader needed soon and as far as a future coalition two prospective partners that look decidedly unstable going on untrustworthy.
A great strength of this site is that it accommodates reasonably civil, opinion, inferences and conclusions. And there, as an example, you have accomplished all three as well as an acknowledgement of fact. On the other hand you could equally opine, infer and even conclude that the National government since first coming to power has been in government for 48 years or so, and commencing another one, as opposed to Labour’s 27 years largely because the latter has too often failed to remain united, performed inadequately and lost the confidence of the electorate resultantly.
What we can conclude Chris, and it is a fact, the last two Labour governments have left respective incoming National party governments with structural deficits due to their economic ineptitude. It’s always difficult to recover from the sort of economic incompetence the country has seen from Labour.
FFS The First Labour Government ran from 1935 to 1949. No doubt a Labour/Greens/Te Pāti Māori government with real transformative policies, tossing out all the neoliberal crap we suffer from, could stay in power longer than that.
And you forgot the 4th Labour government -- two terms.
We now have people trained into and financially dependent on the idea that the money government spends just comes from nowhere. To change it is very threatening to them.
And many people have been led into that trap. They will (are) going to turn nasty. Labour has built a constituency.
Yes indeed. A reporter noted that their last get together was all about how they would like to spend money and nothing at all about where it was to come from. Reminds me of a debate found on Hansard a young MP Robert Muldoon decrying the just ousted Nash/Nordmeyer government, something like - tax and spend, that’s all they know, that’s all they can do. Of course he went on to be a PM for three terms and is much vilified about that now, but he was not always wrong was he.
Well stated. But remember--the Left will bring in a wealth tax next time they are in, resulting in many people who pay a great deal of income tax leaving for Australia. This will include professional people like doctors and dentists. The Greens and Labour will promise "free" dental care, and then promptly cause many of the dentists to leave.
Largely concur.
That said, "wealth taxes", much like CGTs, vary enormously wherever they have been implemented. And in many ways, wealth taxes are the 'new kids on the block' and quite new.
Even the USA has one (of sorts).
https://en.wikipedia.org/wiki/Alternative_minimum_tax
A similar style one would get my support. But as always - spread the net wide and keep the tax rate low. Thus far in NZ, all suggestions of a wealth tax have spread the net far, far, far too wide while the rate has been too high. Any design like that will never get past the majority of voters and rich people are thrilled at that.
Nonsense kiwi. https://www.oecd.org/tax/tax-policy/brochure-housing-taxation-in-oecd-c…
see page 4, most OECD countries EXEMPT capital gains taxes on main residences. Read the report, it will be a revelation to you…..
Perhaps re-reading what k.o. said would be a good idea?
"comprehensive" does not imply a CGT is charged on a main residence.
Did you read the report?
– The majority of OECD countries fully exempt capital gains on main residences, and while there may be justification for such an approach, an uncapped exemption provides vastly greater benefits to the wealthiest households and further distorts the allocation of savings in favour of owner-occupied housing.
– Other forms of tax relief for owner-occupied housing, in particular mortgage interest relief, have been found to be regressive and ineffective at raising homeownership rates. In addition, tax relief for homeowners can lead to higher house prices.
Except they didn't do either of those things ko. You have made that up entirely. They borrowed to fund a structural deficit that has been left by the Ardern|Hipkins Labour Government. Just like they had to after the Clark Labour Government left a structural deficit.
Economic tailwinds? From where do these winds blow? Are Govt going to announce a $80bn investment in industrial policy like South Korea have just done (figures pro rata)? Are we going to see private debt smash through the 150% of GDP barrier meaning we would be reliant on 0% interest rates for any growth? Or perhaps we have a secret factory about to open that will make high value goods that the rest of the world will be desperate to buy - thus reversing our current account deficit for the first time in decades?
The next two years will be a car crash. Lunatics are running the asylum.
Nationals plank is house prices. As long as their house is going up in value, people feel rich.but now, there's more renters ,and first home buyers have been alienated .
But it all hinges on auckland. If they forgive labour for the extended lockdowns etc, national are in trouble. The crl will be open, and people will see the benefit of public transport.road congestion and other tolls will be in, but no Ron's completed.
And let's not forget Freddie, people care about the environment, and it could tip the balance, if inflation worries lessen.
It's 50 50.
Fun fact - every change of Govt in NZ over the last few decades has happened during or very shortly after a reduction in house prices. Like clockwork.
Nah. It’s not 50:50. Coalition will be back with an increased majority. People don’t care about the environment like you and your bubble does…..you’re talking 97:3 against there when the loony policies come into play. There are loads of people around (like me) who care for the environment, and are probably more green than almost all greenies, but we don’t listen to the loony greens. Labour are gone for three terms……at least.
Not sure about crime, but there's some nice graphs in this article around education. Look at what happens to our PISA scores from 2008 onwards. There's a drop again in 2018 under Labour, but I share this in response to your claim that Education will get better under National.
https://www.nzherald.co.nz/nz/politics/pisa-report-nz-school-students-p…
Things all started to go downhill when NCEA was introduced in 2002! Of course I am (slightly) being facetious, but I was in the guinea pig year and utterly loathed the new system (I also did Bursary and Cambridge in a few subjects so had something to compare it with).
Problem for Labour is not that will not get more votes than National, but the fact they need TPM and the Greens to form a government. How likely is that to last?
Most likely scenario is a grand coalition between National and Labour if either party cannot cobble a coalition together (or another general election).
Labour are not in "good shape". It's easy to tick a poll box 2 and a half years out from the election, however no aspect of their personnel or policies are being put under the microscope yet. And that's to say nothing of their links with the nutcase TPM.
The Coalition are doing fine and any angst is the result of the economic situation.
By 2025, National will have taken to blaming immigrants and bludgers for our economic malaise, escalating crime rates, and massive morale-sapping, family-splitting exodus. I hope the country see through that crap and hold them to account for their clueless 'mojo back to the 80s' strategy.
“Household living costs went up more than 20% during the pandemic. While that wasn’t Labour’s fault….”
Really? You don’t think $53B in QE, inappropriate wage subsidies and LSAP had any impact on the cost of living? Zero credibility.
An interesting comparison, Muldoon & Ardern, even though vastly different issues were on hand globally and domestically. It can now be seen that the 3rd Labour government of Norman Kirk’s was energetic and innovative and it is a tragedy such as the compulsory superannuation and the property speculation tax were subsequently repealed. Muldoon gained power and for more than half his time as PM was ok because he in fact did very little indeed. In fact overall think, Think Big and that was about it except for ghastly wasteful interventions such as the SMP subsidies plus trying to ban inflation by rigid wage and price controls. The Lange/Douglas government was dynamic and progressive to an unprecedented degree but the strain of having to undo & reconstitute at speed, Muldoon’s procrastination and restrictions became overbearing and they finally buckled, midstream. Therefore somewhat hypothetically you might suggest, for this particular comparison of the so called worst, that the governments that succeeded Muldoon & Ardern could well think they have some affinity.
No but we let the institutions that manage inflationary pressures use them as excuses when our inflation was already running hot, and instead of hauling them into line, we looked the other way and gave them extended contracts and pay rises.
Labour rewarded failure and blew billions of dollars that should have been used to buy tangible, actual things that would have improved our country. What's even more disturbing is that they'd be the most rational of all their coalition partners the next time around - and they still haven't learned a thing and don't think they did anything wrong.
All over the world it is being reported that young people are now turning Right and embracing conservatism. They are rejecting the Left Extremism that has been shoved down their throats at high school and University.
"It turns out that the kids in Europe are not alright. For the European Union parliamentary elections early this month, voting ages were lowered to 16 in Belgium, Germany, Austria, Greece and Malta. And many of the first-time voters used this newly gained privilege to support local far-right parties.
Far-right parties now have the biggest bloc in the EU’s parliament and their victories are apparently driven, in part, by Europe’s youth vote."
Oh the irony of the NZ Left wanting to lower the voting age!
You dont think that the schools in Europe and the US are not doing the same? If not more? Its the entire system that the kids are rejecting, and thanks to social media the message of the Right will be spread, seen, and absorbed. You don't need careful analysis when the ADHD generation responds better to being bombarded with constant 30 second bites of simple messaging.
Funny how NACTNZF supporters say this govt is a result of mmp working . Its not .
Its the result of how two experienced minor parties ran rings around an inexperienced major party. and the media putting the pressure on to form a govt quickly. Both minor parties got policy wins that 90 % of voters did not vote specifically for.
True and in true partisan style those views on MMP invariably depend on whether or not it delivers their particularly favoured government.To illustrate that in a sense, in 2017 WP & NZF were for one side the saviour that enabled such a government. Come 2023 WP& NZF are the devil for enabling an opposition government.
A large part of that would have been the (global) economic conditions. If the right can’t turn this around then the shoe will be on the other foot. I tend to agree with this article though that the economy will be on the mend by then and that the right will win the next election.
The only poll that matters is years away. If the last Labour cabal of jealousy and racist separatist policy gets in again, there will be a mass exodus west. It will be lead by all the immigrants from SA that have arrived in the last twenty years. They have seen that model unfold in their home country.
Australia will happily defer its mass Asian and Indian immigration to NZ if all the hard working tax paying kiwis migrate there.
"And it gets worse. That majority could vanish altogether if New Zealand First were to fall below the 5% threshold, even if the Act Party picked up all of the lost votes."
- Good the sooner the coalition is gone the better.
"My thinking is that a National-led coalition is most likely to win a second term. This is largely due to economics"
- No. The economy would favour Labour if the economy follows the budget projections. Unemployment will be higher in election year 2026 (4.8% than election year 2023 (3.6%) Real gdp/capita will be lower by 2026 vs 2023 as well. [budget docs].
"National and its friends might not have caused any of these problems" -
- Yes they did. They wrote the budget. $3bn to landlords, inflationary fiscal impulse, more borrowing, and almost no cost-of-living relief for the poor.
"A separate survey done by the company found one in four Kiwis were finding it difficult to manage financially, and 25% thought their standard of living would fall in the next year."
No kidding
- a) 300,000 in energy poverty (& $15/month rise probably coming)
- b) 480,000 foodbank customers per month (that's the whole population of NZ per year)
- c) very high rent/income ratios (while the net inbound immigration is at its highs)
- d) $5 prescription charges back
- e) out of control local government spending with massive rate increases
- f) ETS likely to increase as National has said it wants to mainly use mainly ETS price for climate change. It has also now stolen the ETS revenue for general expenditure as it no longer ringfenced for climate mitigation.
there has been very few 1 term governments, that and it is roughly even between left and right governments which as a country we will not let last longer than three terms before most of us get grumpy and vote them out
- first Labour (1935–1949)
- First National (1949–1957)
- Second Labour (1957–1960)
- Second National (1960–1972)
- Third Labour (1972–1975)
- Third National (1975–1984)
- Fourth Labour (1984–1990)
- Fourth National (1990–1999)
- Fifth Labour (1999–2008)
- Fifth National (2008–2017)
- Sixth Labour (2017–2023)
- Sixth National (Current)
The National Party formed out of necessity as an amalgamation of the United & Reform parties to oppose the fine first Labour Government led by PM Savage. That was in 1936 & of course WW2 provided six years or so of a rather large complication to usual election concerns, so much so that a war cabinet coalition was formed. PM Fraser succeeded Savage and it wasn’t until 1949 that Labour lost power. Very different set of circumstances to that of today. But nonetheless, that first Labour government was a very fine government and to follow, only Helen Clark’s fifth, has had anywhere near the same lasting power.
National are doing the hard parts now, by resizing the public service.
I hope nothing to do with the treaty is on the table at the election because it will mobilize a lot of one issue voters and they won't vote centrist. When we veer too far left or right bad things happen.
The government's problem partially stems on the fact they wasted months unwinding all the previous government's policies instead of enacting their own, constructive policies. They're only beginning to do that now, so there will be a lag between their own policies and any polling boosts.
What is the plan with the coalition? it appears to be the reduction of the govt deficit. But the deficit is not that high that it should cause great concern. So what else? Tax relief for property investors is a policy that reskews investment back to the sector that is the major cause of inequality and generally low investment in the rest of the economy. Deincentifizing the move to electric vehicles but helping the fossil fuel vehicles. Wanting to drill baby drill in a country with small resourses. Ignoring climate change. Dumping on their medication promise and failing to improve our medications list. All this suggests sector capture - property investment, fossil fuels + mining + road users - so a mishmash of favours to the 1980's.
While I agree that we needed to find efficiencies in our public services, I don't agree with the government's unsophisticated hack and slash approach. Requiring a blanket 6.5% saving across all Departments, fails to take into the account the individual context of each agency and sector, and provides an arbitrary target for everyone to meet. Some agencies are historically underfunded, and any significant cuts are going to seriously impact people. I have friends in work in Government, one of my friends in MBIE's space policy team said their group is having zero cuts. Meanwhile, the public health team at the Ministry of Health is being disestablished, and the policy teams at OT are being cut from 5 to 2 policy teams. Meanwhile MFAT has zero cuts, Treasury and the other elite agencies, barely any actual redundancies. Health, Education, where there is already massive underfunding is facing brutal cuts. Just a consequence of having this arbitrary target with zero assessment of what capability is needed to deliver on their work programme, or whether this will even be possible.
How is the reintroduction of interest deductibility not basically introducing moral hazard for investors? Allowing investors to deduct interest as an expense (and thus reduce profit and thereby tax liability to zero) is basically shifting the true cost of borrowing from the investor on to the taxpayer. Since it's not coming out of their pocket, it's less likely to be a concern.
"Household living costs went up more than 20% during the pandemic. While that wasn’t Labour’s fault, it was in Government when it happened and copped the blame"
Come on Dan. I know this is an opinion piece but you really shouldn't say something so wrong, so confidently.
The following choices by Labour have had a large impact on cost increases:
1) Increasing the minimum wage consistently at a much higher rate than inflation, or growth in median/average nominal, or real wages. On the latest data we now have the 4th highest minimum wage relative to the median wage in the OECD. While raising the minimum wage can help address equity goals, and poverty issues for lower income groups, it also creates high cost pressure across the economy as other workers demand rate rises, let alone the added pressure on retail and hospitality, who employ lots of people near/on these wages so face disproportionate cost pressure when minimum wages increase. Cost pressure -> price increase.
2) Reinforcing the duopoly through covid restrictions. Goes without saying really, the competitive fringe in the provision of groceries, butchery items, fruit & vege etc... got squeezed out during covid due to choices made by the government around who was allowed to open. You may think these choices were justified for other reasons, but concentrating further an already concentrated market as a result adds cost pressure to households.
3) Fighting the reserve bank through highly stimulatory budgets over the 2021 - 2023 period while Orr was trying to raise rates. Honestly, look at any press conference given at an MPS by Orr during this period. He constantly says in an exasperated tone, 'we need fiscal policy to work with us, not against us'. Robertson's response is to reduce the price of petrol, arguably the most inflationary thing you can do as it increases aggregate demand further into unsustainable territory (thus higher inflation) more than anything else since it flows through.
This list is just pulling out the obvious, and is non-exhaustive. But come on.
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