On Saturday, the Labour-led government suffered a defeat of Biblical proportions, some of it self-inflicted. Years ago, veteran political blogger Jesus Christ had tapped into Saturday’s public mood pretty accurately, with this soundbite at Revelations 3:15-17:

I could wish you were cold or hot.. [But] because you are lukewarm, and neither cold nor hot, I will vomit you out of my mouth.

Meaning: Labour should have gone down fighting in defence of a programme of radical wealth re-distribution. Better that than perish in this sorry fashion, for lack of political courage and commitment to the party’s values and traditions. A more radical agenda could have included a capital gains tax, a wealth tax, meaningful anti-trust action against the virtual cartels being run by banks and supermarkets, a windfall tax on their profits, making Working for Families income supports available to beneficiary families, funding Kiwibank so that it can compete significantly with the Aussie banks etc etc . In 2020, Labour was given a mandate to do all of those things, and more besides. Instead it had a fatal collapse of nerve and on Saturday, the voters punished it accordingly.

No doubt, Labour will set up an internal working group to assess where it all went wrong. On past performance, this effort will probably conclude that taking a few bucks off a basket of fruit and veggies at the supermarket and $5 off prescription charges at the pharmacy was a riskily radical response to the cost of living crisis. Besides, since all incumbent governments around the world are being punished for the post-Covid cost of living crisis... No one really did anything wrong, so thanks everyone for all the hard work. Labour’s campaign manager Megan Woods didn’t get where she is today by displaying a capacity for self-criticism.

Labour’s grim results were most evident in Auckland, where a swathe of former Labour strongholds (Mt Roskill, Mt Albert, Te Atatu, New Lynn etc) were either lost outright to National, or retained only by slim margins on the night. In all, Labour lost seven electorate seats to National, and at this point – before the special votes have been counted – Labour holds only six of the 21 Auckland electorates.

To the left of Labour, the party bled support and lost seats to Te Pāti Maori and laid a platform for a complete TPM takeover of the Maori seats in three years time. Labour also lost seats and left wing supporters to the Greens, who won Wellington Central and Rongotai. As with TPM, there is no reason to think those voters will automatically return to a Labour Party that spent its second term being pathologically averse to taking political risks.

The consequences were felt directly, and indirectly. A strong performance by freshwater ecologist Phan Lam in Banks Peninsula for example, has left Labour’s Tracey McLellan trailing her National opponent on election night. This example underlines how left wing voters were seeking genuine action on climate change, and did not want farmers and their lobby groups to have a virtual veto on government policy in this area. Under the new government, farmers are being given an extra five year holiday before they have to do something about climate change – and only so long as that response doesn’t require them to make any significant changes to business as usual down on the farm.

Similarly, left wing voters also wanted Labour to take radical action to strengthen the social safety net. Again, only the Greens and TPM provided hope in that area. Right now, Act and National are already working out how to turn their beneficiary-bashing rhetoric into policy prescriptions.

Judging by historical precedent, the large number of special votes and votes cast overseas (about 570,000 votes in all) are likely to make the final outcome slightly less painful. The centre left may claw back a seat or two – including Banks Peninsula - but that will not resolve Labour’s self-engendered identity crisis. Currently Labour’s cupboard is bare of obvious leadership talent. Arguably, looking under the caucus sofa for a charismatic leader able to pluck victory out of thin air in 2026 shouldn’t be the party’s priority right now. Surely, the party first has to recognise its failure to carry out the radical left wing surgery that the country’s various ills required - and for which a Labour government ended up prescribing only the Panadol of incremental solutions.

After a compassionate interval to allow Chris Hipkins to do the decent thing and resign, Labour should pick a leader committed to scrapping the party’s fatal attraction to so called Third Way economics ie. free market economics with a human face. For example: instead of bragging about how many free trade deals Labour has signed, maybe Hipkins should have been offering re-assurances that these free trade deals will not cost jobs, and erode working conditions. Shoppers, for instance, know that “free” trade means they have to pay London prices for goods we produce here.

Fixing an identity crisis

To survive and flourish in future, Labour has to commit itself to radical wealth re-distribution, and to urgent action on climate change – which will require making agriculture pay for their pollution, and not simply hand the emissions bill over to taxpayers.

To put it mildly, there is a shortage of personalities in the Labour caucus blessed with the ability to attract swing voters to the Labour cause. Chasing that illusion is not an option open to Labour in the foreseeable future and it really shouldn’t be Labour’s primary concern right now. Of the talent available… Kieran McAnulty has ruled himself out of leadership contention for the foreseeable, and Grant Robertson is not only past his “use by” date, but has been more part of the problem than part of the solution, starting with his decision to bind Labour to Blairite budget constraints.

IMO, David Parker is the best option among Labour’s surviving roster of senior MPs who might have the will and the ability to shift Labour back in the leftwards direction necessary. As Revenue Minister, he asked IRD to do the research (ultimately in vain) to enable Labour to embrace a wealth tax.

Plainly, Parker is not a dynamic leader able to win elections by the power of his personality. Currently though, Parker seems the only potential leader able to sort out Labour’s pressing existential problem of deciding what its purpose is, besides waiting for its next turn in the Beehive - from which it can then disappoint its core followers all over again.

Rebuilding will require Labour to aspire to offering more than a kinder, gentler version of market economics... After first checking with the focus groups and internal polling to see if that’s alright with the captains of commerce, the credit rating agencies, the Reserve Bank, the business lobbyists, the farmers and everyone else who managed to put the frighteners on Labour so successfully after the party won unbridled power at the 2020 election.

Over on the right

While the centre-right profited handsomely from the widespread public desire for a change – any change – from a status quo that the majority of voters had come to profoundly dislike, there’s a 78 year old elephant in the room. Will National treat New Zealand First leader Winston Peters as a “nice to have” addition to the new government arrangement? Or will National accept that Peters is going to be a “need to have” ally, if only to ensure that the new government can safely steer its legislative agenda through Parliament over the next three years?

Currently, National/Act does have a governing majority, but only by the merest whisker, with the special votes likely to erode that safety margin either directly - or even indirectly, by increasing the size of the parliamentary overhang. Quite reasonably, Peters seems happy to wait until early November when the final count of the special votes will make the strength of everybody’s bargaining hand crystal clear.

In the meantime, David Seymour – no democrat, he - wants National and Act to get on with reaching agreement on their plans for government reform, even before the special votes are counted and before they have a complete mandate to do what’s on their wishlists. Good luck with adopting that attitude to NZF. The notion that Peters can be kept sidelined at the other end of the tent before being hauled back in to rubber stamp whatever Act and National have already decided to do is amateur hour politics. That’s not the way to show Peters the respect he craves and demands.

It should be clear even to Seymour, that when Peters says (as he did this morning) that some of the promises made by the centre right on the campaign trail are now “confetti” that he doesn’t plan on being yoked to any far right economic agenda that would destroy all those responsible, once things begin to turn out badly.

Perversely, the horse-trading over competing policies and the baubles of office will only add to the desirability of having Peters inside the tent in some capacity from the outset. No doubt, Peters will extract a price for any “help” he provides that enables the Luxon-led governnent to govern with certainty. National and Act will not get “help” from Peters without making such compromises.

Peters has a tactical advantage. National and Act’s oft-stated preference has been to govern as a duo, which probably means Peters would have some “outside government” status whereby he promises confidence and supply in return for concessions. Problem being, such an arrangement would front-load all of New Zealand First’s gains while it then proceeds for the next three years to be held jointly responsible for whatever extremes LuXon and Seymour will enact, once left to their own devices.

To avoid that fate, Peters needs the kind of concession that would keep on giving, while also leaving him room to criticise the government policies (starting with tax cuts) that NZF strongly opposes. It's going to be hard for Peters to be both a government critic, and one of its key fellow travellers.

National, for its part, might want to have Peters firmly inside the tent so that (a) he can be jointly responsible for the new government’s programme, while also (b) serving as a handbrake on some of Act’s electorally poisonous pet projects. Left unchecked, Act’s ideological fervour and brutally simplistic policy solutions to complex social problems could easily drag National down with it.

Amid all the public expressions of mutual bonhomie, a certain paranoid tension will endure between the centre right parties about each other’s true intentions, and this fog of distrust will be swirling around the coalition talks. In reality, the coalition talks won’t begin in earnest until after November 3, and (nominally at least) the bargaining will also have to take into account the likely win for National in the November 25 by-election in Port Waikato. So buckle up - its going to be a bumpy ride.

Footnote One: Christopher Luxon will now wear the mantle of being the nation’s leader – and if need be, can exert the power that comes with it – as he attempts to make reality conform to National’s slogans and soundbites. He’s promising to govern for all New Zealanders, including everyone who didn’t vote for him. Good soundbite.

That noble sentiment though, is hard to square with the centre-right’s publically stated plans to freeze the minimum wage for three years, to re-introduce 90 day fire-at-will employment trials, to reduce personal grievance protections against workplace harassment, to give landlords a multi-billion dollar tax break by letting them write off the interest payments on their rental properties, to allow landlords to evict tenants with needing a reason, to invite people to rob their future by using their Kiwisaver savings to pay their housing rental bonds, to spend extra billions on Defence, to impose a five year lifetime limit on welfare support for the jobless, to lower corporate taxes, impose cashless welfare cards on long term beneficiaries, to create more charter schools able to expose kids to unqualified teachers, to permanently lower the tax burden on the wealthy, to scrap Fair Pay Agreements, to abolish the Maori Health Authority, to spend millions on sending young offenders to punitive boot camps known to fail, to bring back Three Strikes, to escalate the culture wars over gender fluidity, to re-open the export trade in live animals, to reduce the sentencing discretion of judges, to raise the retirement age, to give farmers an extra five year holiday from changing their climate damaging practices, to remove sanctions on dairy farming’s pollution of our lakes and rivers, and to reduce healthy homes protections.

New Zealand is going to be subject to change alright. It is going to involve a Great Leap Backwards to the early 1990s. Right on cue, Ruth Richardson has re-emerged into daylight.

Footnote Two: Ironically, Labour’s massive loss of electorate seats means that a large number of its list candidates will now be able to remain in Parliament. Hipkins has presided over an election defeat as shattering as the one that National endured in 2002. On that occasion, Bill English stayed on for 16 months afterwards. While Hipkins is liked personally, it is impossible to imagine him leading Labour into the next election.

Footnote Three: One early stumbling block in the coalition negotiations will be the referendum on Treaty principles that Act says is its bottom line, and which Luxon has already ruled out. Perhaps some sop – setting up a constitutional working party to re-evaluate Treaty principles? - would be enough to salve Act’s hurt feelings.

Footnote Four: The sentimentally inclined will find it fitting that in the twilight of his career, Winston Peters is willing to fly back under the wing of the National Party where he began his political career. Ironically, Peters left that political home in 1993 in rebellion against the very same neo-liberal policies that Christopher Luxon and David Seymour now seem determined to resurrect.

Peters must be feeling déjà vu at the prospect of (a) being back roughly where he started, and (b) still having to deal with the same ideological differences with his new partners, as he did when battling it out with Ruth Richardson 30 years ago.

Back then, Peters knew that PM Jim Bolger was a pragmatist who had more in common with him than Bolger did with a zealot like Richardson. That’s not going to be the case this time around. Peters is going to find it harder to score significant gains, without becoming a captive to a globalisation agenda that he – and the NZF faithful – personally despise. For a guy wishing to ensure that New Zealand First will have a future once he’s gone, that’s a problem.

© Scoop Media