Why the capital gains tax decision was a Labour win

: How long will the Greens and NZ First continue to stand alongside Jacinda Ardern at Waitangi?
 

If you had asked many National supporters and MPs before March 15 how they would win government next year, they would tell you two things.

They would assure you that the stardust would sooner or later fall away from the Prime Minister and then they would give your their theory of the wasted vote.

Under this scenario, both the Greens and NZ First would poll less (but not too much less) than five per cent and thus not return to Parliament.

Because their vote would not count (i.e. be wasted) the election would become an old-style first past the post drag race between National and Labour with a winner needing only a vote in the mid to high forties.

March 15 and the capital gains tax has plainly changed all this.

For a start the stardust factor is now intense - even among Nats.

A National MP tells of a meeting of his “SuperBlue” group; that is National Party members who get super; and how they spontaneously applauded when he praised Jacinda at a recent meeting.

As is now widely being reported, National MPs are asking themselves how Simon Bridges might fare in a campaign against Jacinda. Their ultimate answer to that question will determine his political future, but so far the answers appear to be largely in the sceptical or negative column.

Simply, she has redefined politics for the meantime by placing values now at its centre.

That by itself is not enough to guarantee longevity in public. After all, it's what Obama did in the US, and a value-less politician, Donald Trump followed him.

But the problem National has now is that to fulfil the second part of its grand strategy; to eliminate NZ First and the Greens; means engaging in day to day transactional politics; exactly the style of politics which clashes with values-laden politics.

Thus, for example, National decided to oppose the UN Compact on Migration because they believed that would win over some NZ First support even if in doing so raised questions about how committed they really were to believing in a New Zealand open to the world.

The bigger problem was that the Prime Minister has decided to play them at their own game.

After Christchurch, she and her advisors could afford to take the view that she had enough political goodwill to be able to afford to lose some.

And so the capital gains tax decision was pure transactional politics.

Undoubtedly there will be some diehards on Labour’s left who yearning for the days of the Alliance will move across to the Greens as a consequence of their abhorrence of the cynicism behind the capital gains tax decision. 

So where’s the problem with that?

All it does, surely, is to strengthen a fragile Greens vote and insulate them from National’s wasted vote attack.

It should keep them above five per cent and thus return them to Parliament.

For NZ First, the decision has been easy to portray as a win; an example of how without Winston, a Labour-Greens government would veer off to the left.

And it pays to remember another political truism here. 

The University of Auckland’s legendary political scientist, the late Bob Chapman, the mentor of Helen Clark, always insisted that New Zealand elections were won in the centre.

That was because of the inherent conservatism of the New Zealand electorate.

Indeed Chapman even argued that apart from two brief periods during the  Seddon and Savage administrations, the New Zealand voter was consistently for the status quo.

The libertarian columnist, Matthew Hooten, has another version of Chapman’s argument.

Hooten says that to win an election, parties have to move the "median voter" across the centre line; in other words, to persuade some voters to abandon the status quo.

That is why NZ First is important.

It soaks up centrist “could be National, could be Labour” votes. It is a safe haven for those frustrated with the big parties.

If you look at the electorates where NZ First is strong – mainly provincial North Island – they are the same electorates that Social Credit drew support from back in the 70s and 80s.

What stands out is that Social Credit’s vote peaked when voters move out of National to it; it was the party for those who didn’t like National but didn't entirely trust Labour.

It’s the same story with NZ First.

Now, with the capital gains decision, it has tangible evidence to point to its claim to potential voters that it can knock the rough and wild edges off a Labour-Greens government.

That argument may prove even more attractive to potential National voters if Labour stays well ahead in the polls up to election day.

Looking at an inevitable Labour government, those possible Nats may decide to reign in Labour by voting for Peters.

(Watch for Labour to spin "internal polling" showing it well ahead as we move closer towards the election to try and encourage this. 

That is not to say that the hard part for the government is over.

In fact, it may be only beginning.

What seems clear is that money is tight.

Ardern recently defended the government’s resistance to pay demands from teachers by saying she understood their frustrations.

 “I understand the frustration of teachers and principals—I do—because there are a large number of needs in education,” she said.

"But from the Government's perspective, we're also facing a range of competing needs in areas that I know teachers care about too. "

Health Minister David Clark has been equally firm with DHBs who have been chronically unable to live within their budgets.

"I will be monitoring the performance of all DHBs closely for the remainder of the financial year and will consider a range of governance options to strengthen and improve performance if necessary," Clark said in a letter to DHBs in January.

And last week he effectively sacked the board of the Waikato DHB and replaced them with a Commissioner after they forecast a $56 million deficit for the current financial year.

In the background, there are murmurs about the delay in releasing the Defence Capability Plan with its call for replacement aircraft and eventually ships for the navy.

Though a spokesman for Defence Minister Ron Mark assured POLITIK the plan was on its way; critics like the former army officer and blogger, Simon Ewing-Jarvie are suggesting there are financing problems.

And on the longer-term front, cost blowouts in the Auckland Central Rail Loop raise questions about the viability of the government’s long term investment programme.

Ardern is still not off the hook over Huawei and the Kiwibuild shambles continues to drag on.

In short, government is going to become harder as it inevitably does once the first flush of “new government” euphoria wears off.

And so the question despite the challenging outlook is whether March 15 and the Capital Gains Tax back down are such huge injections of political capital into the government and its support parties that they might carry through to election day.

It would be surprising if they didn’t. But it could be a close run thing.

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