So changing the leader wasn’t enough. Turns out you still have to change the party.
New Zealand’s charismatic Labour leader, Jacinda Ardern deserves credit for not only saving the furniture, but catapulting the New Zealand Labour party – from the near-death 24% it was scoring in the polls when she was installed as leader in August to 35.8% on election night, and the brink of government after nine years in opposition.
Once the special votes (overseas votes, late enrolments) are counted on 7 October, Labour may gain enough extra seats to still cobble together a ‘left block’ coalition government with the Greens and the populist anti-immigration party, New Zealand First.
The Kiwi election isn’t over yet.
But nearly 36% on the night was well off the 43% Labour were polling a few weeks out from the election at the height of Jacindamania. Whatever happens after the special votes are counted, changing the leader was only worth about 12% extra.
Before she became leader, a mood for change had been showing up in polls, but New Zealanders hadn’t felt that Labour was ready for government.
Then Jacinda turned up at her first press conference, distanced herself from a ‘left block’ coalition with the Greens and promised to campaign as a ‘Labour party’.
In one news cycle she gave traditional Labour voters who would never vote for the Greens, a reason to come back to Labour. Her political courage and authority made her an overnight celebrity.
What went wrong?
Well it wasn’t Jacinda’s fault.
She got blamed for making a ‘captain’s call’ to introduce a capital gains tax (CGT) during her first term if a ‘tax working group’ advised her this was the best way to burst a housing bubble and make homes affordable.
But the problem wasn’t the ‘captains call’, it was the absence of a tax policy for the ‘captain’ to campaign on. Jacinda had only been in the job a few weeks.
Instead she was left promising a ‘tax working group’ when everyone knew she wanted to promise a ‘tax switch’ – reduce income tax and pay for it with a fair tax on capital.
New Zealand is unique in the OECD. Wage earners shoulder the bulk of the tax burden because there is no tax on capital. The centre-right National government had introduced a so-called ‘bright line test’ where you pay some tax if you buy and sell a house within two years.
As far as curbing tax-free speculation on housing, that’s about as effective as taking a plastic knife to a knife fight.
Jacinda knew Labour needed to take on a tax system that makes the person who cleans the house pay more tax than the person who owns it. And a CGT was popular, with nearly 60% support.
But Labour lost its nerve and went into an election they could have won with a leader voters wanted as Prime Minister – with an incoherent policy on tax. They thought they could get away with promising to take the advice of a bunch of experts after the election.
That had the double whammy effect of making a fresh-faced new leader look every bit the politician. The more Jacinda talked up her vision and values, the more jarring it became that Labour was only promising was a ‘working group’ on tax. It was as if the Labour party had morphed into a government department of bureaucrats, promising ‘committees’ and ‘reports’. So much for vision.
On top of that, the lack of policy detail gave the centre-right National party a free hit; ‘Will Labour introduce a death tax, wealth tax, land tax, moon tax, sun tax?’ they asked. ‘And was Labour planning on having Jeremy Corbyn and Bernie Sanders on its ‘Tax Working Group’?’ Labour ended up defending itself from taxes it had no intention of introducing.
It was like they lost confidence in Labour principles, metres from the winning line. They hedged on immigration and trade despite a long progressive tradition of internationalism and nation building through trade.
The message ended up confused; ’We’re pro-immigration, but we’re going to cut it by 20-30,000.’ ‘We’re pro-trade, but we’re going to re-negotiate our Free Trade Agreement with South Korea.’
It left Labour defending immigration while alienating migrant voters by promising to cut it; and promoting the benefits of trade while promising to blow up our trade agreements (It’s no accident that on election night Labour lost votes in electorates with high migrant communities.)
Where there should have been policy detail, there were promises to set up ‘working groups’ and ‘committees’. Where they should have had confidence in Labour principles applied to tax, immigration and trade policies, they tried to have a bob both ways and instead sounded tricky.
National got the most votes of any party. Leader and prime minister Bill English performed better than expected on the campaign trial.
But National don’t deserve to win. They failed to make a compelling case for why a centre-right government is better than a Labour government. They campaigned on their past record, not the future, with a message to voters to: ‘be grateful – vote for us’.
Labour almost won and may still. It should have been a slam dunk.
Whatever happens on October 7, the popular Jacinda needs to make herself unpopular with some in the party so Labour never again goes into an election unconfident of its political mission, or promising a ‘committee’ in place of a ‘policy’.