Analysis: With New Zealand First flagging in the polls, what policies might a Labour or Labour-Green government resurrect?
This past term of government has been a bumpy ride.
When Labour or the Greens attempted to speed forward with policies to overhaul the tax system, reduce emissions or address issues with the criminal justice system, Winston Peters was poised at the handbrake, bringing things to a grinding halt.
Now, however, Peters and the rest of New Zealand First face a tall order to return to Parliament, polling at well below the 5 percent threshold needed to earn a spot in Wellington.
“Look, there are things that we weren’t able to progress in the last iteration of government that, as a Labour Party, we would look to progress,” Jacinda Ardern told reporters on Wednesday, when asked whether she would advance policies quashed by NZ First.
With the handbrake out of the picture, what could a Labour or Labour-Green government accomplish?
Many of the Government’s policies have sought to transition New Zealand from a country reliant on polluting cars to one where people commute by electric vehicles and public transport.
The flagship policy in this regard was light rail in Auckland.
The plan to build light rail down Queen Street and Dominion Road and, ultimately, to Auckland Airport was a major promise from Labour’s 2017 campaign. The first stretch of the project was meant to be completed by the end of next year. Instead, construction has yet to start.
In part, this is because two competing bids were presented – one by the New Zealand Transport Agency promised a simple light tram through central Auckland, while a later offer from the NZ Super Fund for a public-private partnership involved raised tracks over Mt. Eden and a tunnel down Queen Street.
While the conflicting proposals led to some delays, the project was still chugging along until Peters put his foot down in June, refusing to give his sign-off to either of the bids.
The Greens have long campaigned for light rail – Green Party co-leader James Shaw championed light rail in Wellington in 1992 run for Wellington City Council. Labour, too, wants to see light rail in Auckland. With NZ First out of the way, it seems likely that one form of the project will move forward, if the Greens and Labour can agree on which proposal they want.
Peters also crushed a plan to reduce transport emissions through the introduction of a ‘feebate’ scheme. This would have placed a fee on high-polluting vehicle purchases to correspondingly subsidise the purchase of electric vehicles. The policy was announced in July 2019 but shot down by NZ First in January.
The Greens have announced they support implementing the feebate scheme if reelected, but the policy isn’t part of Labour’s transport platform. Labour and the Greens both support another part of the package that NZ First put the kibosh on: a vehicle emissions standard, which would limit the average emissions of cars, vans and utes imported by vehicle retailers.
Therefore, a vehicle emissions standard seems a near-guarantee, while a feebate might depend on outcomes from the post-election negotiating table.
Labour and the Greens also have a different attitude towards criminal justice issues than NZ First. The Sexual Violence Legislation Bill, which aims to reduce trauma for victims of sexual violence who participate in their cases in the justice system, was stalled after the party’s spokesperson for women, Tracey Martin, raised concerns.
It passed its first reading unanimously in November and was reported out of select committee in June, but Martin called for a halt and a review just days after the bill returned to the House. In the end, the party failed to wrap up its review in time for the bill to be progressed.
While National has also raised concerns about the legislation, the Greens and Labour seem likely to forge ahead with it if they hold the balance of power.
Likewise, a longstanding Labour-Greens aim to reverse the three strikes law – which requires judges to impose the maximum punishment on a person convicted of a serious violent or sexual offence for the third time – is likely to be actioned if the parties hold the balance of power. The law was passed by National and ACT in 2010 and NZ First has long supported a tough-on-crime approach to the justice system.
An attempt by the current Government to repeal the law in 2018 was stamped out by NZ First, but Ardern said on Wednesday that she’d pursue the policy again next term, if able.
“We’ve already said that our policy has been consistent. We’ve never supported three strikes, so it’s part of our policy to remove it,” she said.
Likewise, the Greens have long supported a repeal of the three strikes law.
Tax and welfare
Over the course of the last term of government, the coalition parties have clashed repeatedly on proposed changes to the tax and welfare system, but teasing out which failed policies NZ First is responsible for could be a little more difficult than in transport or criminal justice.
The elephant in the room is some form of tax on assets or capital gains from those assets. Labour has a long history of supporting a Capital Gains Tax (CGT) and Ardern commissioned a Tax Working Group to investigate the feasibility of such an approach, as well as other changes to the tax system. When the working group reported back in favour of a CGT, however, she did little to defend the policy publicly while internal negotiations with Peters took place.
Ultimately, NZ First won out and Ardern ruled out a CGT not just for this term of government but in any future term where she is Prime Minister.
In lieu of a second go at a CGT, the Greens have proposed a wealth tax that triggers on individuals with $1 million in assets or couples with $2 million. This could get around Ardern’s CGT promise, but she has since ruled out the wealth tax proposal as well. Whether she means it – or whether the Greens might be able to extract an about face from her anyway, if they hold the balance of power – has been the subject of much discussion in recent weeks.
For his part, Shaw has continued to say that the Greens will take it to the table, allowing National’s Judith Collins to attack Labour over the Green Party’s tax plan.
On welfare, things get even murkier. The Greens inked a confidence-and-supply agreement with Labour in 2017 that promised an overhaul of the welfare system. In May, Greens co-leader Marama Davidson accused Labour of breaking the promise.
Another working group, the Welfare Expert Advisory Group (WEAG), was commissioned by the Government to examine reforms to the welfare system. It determined that massive changes were needed, including a substantial boost to the average benefit and the removal of sanctions. The Government has advanced a handful of these policies and increased benefits by $25 a week in response to Covid-19, but progress has otherwise stalled.
NZ First hasn’t claimed credit for all of this and Ardern has repeatedly defended the decision not to implement all of the WEAG’s recommendations. But if the Greens hold the balance of power after the election, they could well extract some compromises from Ardern that wouldn’t have made it past Peters’ red stamp.
The party’s new welfare policy includes a Guaranteed Minimum Income (similar to a Universal Basic Income but paid out to those who aren’t full-time employed) and reforming ACC to cover all health-related income support. That’s transformational, but it could be more palatable than a wealth tax if Ardern has to pick just one.