2025: what's up in Aotearoa New Zealand?
Economic prosperity and nationhood are the big issues.
The new year in New Zealand politics is well under way. Prime minister Christopher Luxon took the initiative with a cabinet reshuffle and a speech focusing on economic growth.
The Labour Party had a caucus retreat. There was the customary gathering, attended by politicians, at Rātana Pā in honour of Tahupōtiki Wiremu Rātana (1873–1939). Parliament reassembles on Tuesday, and Waitangi Day is only a week away.
I was happy to be invited by Radio NZ’s Wallace Chapman to discuss what’s ahead in politics with panelists Peter Dunne and Sarah Perriam-Lampp (from 6’30” in the audio.) Here are some further thoughts:
In his state of the nation speech on 23 January, prime minister Luxon said, “If we want a better standard of living, we have to go out and make it happen.” No one owes us a living; we have to earn it. (At the bottom of this column, I’ve summarised in bullet-points his main policy ideas, in case you’ve missed them.)
Economic recovery and growth are at the top of any government’s priorities at times like these. The Luxon government need to get some economic points on the board this year if they’re to approach the election with a positive story to tell. People want to see results such as: prices under control, interest rates down, people finding good jobs, cool things happening, and bureaucrats helping rather than hindering.
The new Public Service Commissioner Brian Roche commented in the NZ Herald (paywalled) about the amount of public servants’ time spent in meetings and consultations, and about “improving the quality and timeliness of our decision-making”. But “a lot of what we try in terms of policy is impeded by assumptions [rather than analysis] that ‘this will breach the Treaty’.”
That brings me to the next big issue for 2025: te Tiriti o Waitangi.
New Zealand made great strides over the last four decades investigating and redressing past injustices against Māori, under the aegis of the Treaty/te Tiriti. Treaty settlement bills, with formal apologies, get passed unanimously by parliament. Even the ACT Party votes for them.
Many people believe, however, that applications of “the principles of the Treaty” in public administration (i.e., co-governance) went too far, especially under the previous Labour government. This occurred without public consent, but nonetheless effected gradual constitutional change. Disquiet over that contributed to Labour’s defeat in 2023.
Is it time, then, that parliament clarified and codified those “principles”, as proposed by the ACT Party? Should statutory references to them even be repealed, as proposed by the NZ First Party?
Or should parliament stay out of it? Haven’t judges already done a perfectly good job of parsing the statutory phrase “principles of the Treaty”? Jurisprudence since 1987 has developed, for example, the principle of a partnership of good faith between Māori and the Crown.
The present government’s Principles of the Treaty of Waitangi Bill seeks to codify the principles in a way that’s consistent with fundamental equality of rights, rather than with equity or recognition of colonisation and consequent disadvantage. Moreover, this controversial bill neglects to mention the ongoing exercise of tribal authority and self-determination.
The bill will take up a great deal of political airtime at least until mid-year. The debate may seem fruitless as the bill is destined to fail, but it may at least further raise public consciousness of matters fundamental to nationhood. It brings out into the open a profound difference of opinion that’s simmered along at least since the foreshore and seabed controversy of 2003 – and it stages a public debate that politicians had swept under the carpet in 2005 and in 2013.
2025 is a “Honey, we need to talk” moment. The Treaty debate can’t be ignored, and the best place to have it out is Parliament, the highest decision-making body in the country, with the duly assembled representatives of the people.
Treaty issues are also, of course, a can of political worms. As part of the price of forming a coalition, the prime minister lifted the lid off it, but he seems to believe he can shut it again by defeating the bill at the second reading – and so get the matter off the agenda well before the next election. But can this nationwide argument ever be brought to a close? Does blocking the parliamentary process stop the argument in society at large, or does it only encourage it to simmer?
Will Luxon be dogged by this right up to the next election? Opponents will relish pointing out how he was pushed into this by a junior coalition partner.
The PM’s determination to “kill the bill” only makes him look weak to those who support it. For those against it, the PM looks more like a reckless Machiavelli who has knowingly sacrificed social cohesion for the sake of gaining power. After all, he did say that the matter would be “divisive”.
The sponsor of the bill, David Seymour, sounds confident that this is just one more stage in a long debate, and that the cause of freedom, as he sees it, will prevail.
The NZ Labour Party meanwhile, if they want to win back some centre voters, will need to calibrate carefully how they express their opposition to the bill. Sticking to the principles as they see them, rather than attacking Mr Seymour, may be wise. Could Labour even make a gesture towards national reconciliation by reaching across the aisle to Luxon, or will they just seek to profit from polarisation?
As a warning for left-wing parties from the US, minority groups whom the Democrats said they represented broke against them last year in numbers large enough to defeat them. A turn away from centre-left parties is occurring internationally and NZ Labour could pay heed.
The early signs are that Labour leader Chris Hipkins has noticed this and is downplaying identity politics and focusing on the economy.
Labour need a credible economic policy, and that means more than just a new tax to make things fairer. Luxon has implicitly thrown down the gauntlet to Hipkins. And Labour needs to show a pathway to boost Kiwis’ prosperity, as they recover from shutdown, recession, inflation and rising unemployment.
“Growing the economy in a way that ensures that everyone benefits” was a key point made openly by Hipkins to his caucus, along with investment in public services and (a favourite topic of mine) restoring trust in public institutions.
While the Luxon government needs to implement its economic policy this year, the opposition Labour Party will begin to clarify its alternatives. Labour can take some heart from the fact that two recent polls have put them one percentage point ahead of National, possibly indicating the start of a shift in public opinion. Is National’s slump in the polls caused by the “divisive” Treaty debate that their leader has unleashed, or is it more of a reflection on the country’s economic stagnation? I have yet to see data that distinguishes those two effects.
If we think of Kiwis voting with their feet, however, StatsNZ reports a net migration loss of 48,000 New Zealand citizens in the year to November 2024, which suggests little confidence in the NZ job market and reflects poorly on the government. There was also a decline in non-NZ citizen migrant arrivals, and hence a decline in net immigrant numbers.
Neither major party is in pole position, however, and it’s a long time till the election.
What about the leaders? Neither Luxon nor Hipkins looks likely to face a serious challenge to the leadership of their respective parties at this point. If this remains unchanged, election 2026 will present voters with microwaved leftovers – which never please when overdone. The Chris vs Chris debate of 2023 will get reheated anyway.
Hipkins may be set to follow in the footsteps of Bill Rowling who became PM in mid-term after Norm Kirk’s death in 1974, and who subsequently lost not just one, not two, but three elections in a row to National’s Robert Muldoon. On the other hand, Hipkins probably won’t want to cite the precedent set by National leader Keith Holyoake who took over as PM and then lost an election in 1957, after less than three months in the job, but came back to win in 1960 and to lead the country for 11 years.
Around the democratic world these days there’s a lack of confidence in leaders on either side. This was noticeable in the high numbers of “double haters” in the US in 2024. In the UK, people were very disappointed in Rishi Sunak, but Keir Starmer didn’t inspire them either.
A fresh approach to political leadership is called for, but emulation of Donald Trump is not the answer in NZ, unless you’re aiming for a niche on the right. According to surveys, support for Trump has grown in NZ and Australia, as his norm-busting leadership style becomes normalised in many people’s minds. But that support is still only a minority.
A global political earthquake is occurring in the West, felt most strongly in the US with the second Trump presidency and his domination of the Republican Party. Right-wing commentators have also been crowing about, for example, the rise of Nigel Farage’s Reform UK party in recent polling. Many Britons are tired of what they perceive as dishonesty and corruption in their traditional major parties.
This is not to be taken lightly. For a historical example of what can happen, just look back at the electoral demolition of Italy’s (genuinely corrupt) Christian Democrats and the Communist Party in the early 1990s, coupled with the rise of media baron Silvio Berlusconi and his jingoistic Forza Italia pop-up party. Later, the online 5 Star Movement rose and fell, and then Italy shifted to the right, putting Giorgia Meloni in charge today.
In a similar display of destructive volatility, French political heads rolled on the left and the right in 2017 with the emergence of Emmanuel Macron and his boutique party En Marche! It’s ironic that this party was rebranded as Renaissance (Rebirth) but now it’s a spent force. Marine Le Pen’s Rassemblement National recently gained the largest share of votes.
The tension in Germany is high ahead of their election (on 23 Feb), as thousands turned out to protest against the anti-immigrant AfD party which is coming second in opinion polls on about 20%. The AfD’s campaign launch included a live video appearance from their new-found buddy, Elon Musk. His endorsement could backfire on both, however. It’s ideologically inconsistent for the nationalistic AfD to seek support from a South African American plutocrat who’s all in favour of immigration – when it works for his business. Anyway, did right-wing Germans really need Elon to tell them to be proud of their culture? For his part, Musk’s political interventions are haphazard and opportunistic, rather than strategic, and his oratory is halting and pedestrian. He may have a short political shelf-life.
New Zealand and Australia haven’t been hit by that kind of volatility and populism, as there aren’t such serious disruptors – yet. But be careful what you ask for…
The policy solutions Mr Luxon offered are a mixed bag:
Remove barriers to competition. Luxon mentioned “powering up KiwiBank to take on the Aussie banks” – which may be a forlorn hope.
Reform the Resource Management Act – something the Key government wanted to do but couldn’t pull off.
Fix health and safety rules. But will that mean more workplace fatalities?
Do more mining. The environmentalists don’t like that.
Attract more tourists. Ditto.
Boost gene tech for agriculture, aiming for high-yield crop variants and solutions to agricultural emissions.
Fresh investments in wind, solar, hydro, geothermal, and natural gas. With the exception of natural gas, that sounds very renewable, and not at all like “drill, baby, drill”.
Streamline processes for foreign investors, which means stopping bureaucrats from saying “no”.
Increase the role of science and technology in the economy. Somewhere, buried deep in the Kiwi brain, is a brilliant idea that’s going to make the country rich. We just have to coax it out with a promise to share the royalties.
Hitching the wagon to the old mantra of economic growth (ignoring the externalities) and trickle down fallacy as the only option. Tried, tested and failed. Could smaller and smarter rather than bigger and dumber be an option or is that beyond the imagination of the economic policy establishment?
You have alluded a couple of times to the notion that the two major parties might come together vis a vis the Treaty, an idea that I have been promoting for more than a year (see my opinion piece in today's ODT). If, led by their Maori caucuses, NaT & Lab could agree on a formula for the Treaty that encompasses both its historical imperatives and the reality and needs of a contemporary electorate, the two extremes Act & TPM would have nowhere to go. Further, a groundwork might be laid from which the courts could take guidance, rather than making it up as they go along. I have put this notion to MPs, with a very positive response from National, but nothing from Labour MPs.