Covid-19: Pandemic politics are on the way out, but a world of uncertainty remains
Luke Malpass is political editor of Stuff.
OPINION: Two polls, two different results for Labour and the Government.
First, last week a 1News Kantar Poll showed the National Party leading Labour for the first time since 2020, with the Māori Party holding the balance of power. A second Taxpayers’ Union Curia Research Poll on Thursday showed the centre-left parties of Labour and the Greens still forming a government – just.
What these two polls have in common is that they show how tight the election race between centre-left (Labour and the Greens) and centre-right (National and ACT) is going to be for the next 18 months.
Among other things, the tightening of the polls hints at what the past two weeks have confirmed: that the politics of Covid are now coming to a close. While the reality of Covid in the community and the Ministry of Health’s response will keep rolling on for several months, affecting households and workplaces, the political currency of the issue is now devalued.
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Covid is here, the rules are minimal and life is getting back to a new version of normal. Political attention is turning to other areas. The politics of 2022 is now not about managing a pandemic, but about governing more generally. And specifically, managing the economy.
A lot of the news that has imprinted itself upon our collective consciousness these past two years will start to fade from view: testing rates, close contacts, MIQ (waiting lists, unfairness, management, closed border), vaccine passes, locations of interest. The list goes on.
Meanwhile, the departure of Simon Bridges has left the National Party with a new finance spokesperson – the irrepressible Nicola Willis.
Willis has long been marked out as a person to watch, but nevertheless her ascension has been fast. Prior to Bridges’ ouster as leader in 2020, she was languishing at No 45 on the National Party list ranking. After Todd Muller’s short-lived ascension, she was promoted to 14. This was followed by a slight demotion under Judith Collins – but a high-profile portfolio in housing – and to then being elected as deputy leader when Christopher Luxon came into the top job. Now she holds the coveted finance portfolio.
Her first performance in Question Time was aggressive, honing in on cost-of-living issues via letters she had received from members of the public. Instead of using the more aggregated and abstract numbers – such as inflation running through 5.9 per cent on the way to 7 per cent –she used stories from struggle street as a way to make it real.
The Government did make a move in this space earlier in the week – and a significant one – slashing the petrol excise by 25 cents a litre. Fortuitously, the price of crude oil also started coming down at the same time.
Labour is determined that it will not be beaten in a cost-of-living battle, but this one will be tough. The global oil price is likely to continue its gyrations – Brent Crude fell from about $130 per barrel on March 8 to just above $100 in the past few days. That’s up from $76 per barrel last Christmas, and $64 at the start of last year.
The move also included an initiative to halve the cost of public transport – with the heavy hint there is more to come in May’s Budget – a way to stave off criticism from the left that it was just encouraging more cars on the road.
Sensibly, for quick relief, the measure was broad-based and easy to understand. From a government that is keen on targeted assistance through often-complicated tax credits, this was a simple tax cut.
The real question is about how long it will remain. On that, Finance Minister Grant Robertson wasn’t really prepared to commit. Essentially the response was: it depends. For a start, it will be there for three months. However, with the general sting of inflation being felt up and down the motu, it's a good bet that it will be extended.
Not even a day after the Government had announced the new measure, Bridges announced his retirement. He will be missed by the National Party. He was a guy who was serially underrated and who – having lost the leadership – took time, reflected and did a fair bit of maturing as a person.
He was one of the most effective proponents of retail politics in Parliament, and had clearly helped to craft the cost-of-living and inflation attack on the Government. But he was also a sometime cultural warrior and handy foil to the slickness of Luxon. There is no ready-made person in National to take over the same job.
New Zealand is about to head into a period of the most uncertainty since the end of the 1980s. There is a conflict in Ukraine that could go in any direction; Covid has crunched supply chains globally, and is now stretching them locally.
In its policy response, New Zealand – as with other countries – has had a massive inflation in asset prices thanks to cheap money policies from central banks, shortages of goods and, in New Zealand's case, a virtually closed-off labour market. Inflation is now the highest it has been in 30 years and, while it is expected to go higher and then drop off in the second half of the year, it will sting – particularly those on the lowest incomes.
While the Government can point to a bunch of measures it is taking to improve the incomes of the least well-off, the more general political problem is expectations versus reality of those not reliant on Working for Families or benefits (although some of their increase will be chomped into by inflation).
It is how much the expectations built up over these past few years – low interest rates, stable inflation, cheap consumer goods – and a failure to see them fulfilled that will make the electorate grumpy.
The other thing to add to all of this is that, prior to Covid, Labour did have a perception problem with competence. It flapped around, until making its bones with Covid. But with the heavy politics of Covid now fast coming to an end, Labour with have to revisit its agenda in a politically sophisticated way that resonates with the public.
This will most probably mean ditching some policies, and working out what story it is telling will be crucial. A bit of agility – of the sort shown on Monday – will be required.
The conditions are ripe for an Opposition revival. But National still has structural disadvantages that should not be forgotten: it is relatively small thanks to the 2020 election result, and poorly resourced compared to the Government. And its front bench, while well-endowed with smarts, is not overly experienced.
This showed up during the week when Luxon accused Labour of responding to pressure from the Opposition, the media and the public in making its petrol tax cuts. A Government listening to the public and responding to pressure? Perish the thought. Most people would think that’s a good thing.