Despite Labour’s smooth transition to a new leader, there are many potentially insurmountable challenges ahead for PM Chris Hipkins – time, the deteriorating economy, and the ‘Jacinda factor’

Opinion: Prime Minister Chris Hipkins was right. Labour’s recent change of leadership has been the smoothest in any party of recent times. Faced with its biggest leadership shock since the sudden death of Norman Kirk in 1974, Labour acted decisively, cohesively, and impressively to resolve its leadership within just 72 hours of Jacinda Ardern’s dramatic announcement. The mixture of euphoria and relief among Labour MPs has been palpable. They now feel back in this year’s election race – a good position to be in as the political year gets underway.

Hipkins’ actions so far have been positive, enthusiastic, and polished, further encouraging a hitherto increasingly anxious caucus that the party’s fortunes may be about to change. With Parliament resuming in three weeks, this is all good news for Labour. However, the rapture notwithstanding, Labour’s electoral mountain remains as high as ever.

In addition to all the usual problems facing a government in election year, Hipkins faces three potentially insurmountable challenges to conquer before election day – time, the deteriorating economy, and the “Jacinda factor”.

Laudably, the Prime Minister has promised a significant policy reset (building on work foreshadowed by his predecessor before Christmas). Unpopular or complicated policies are to be dropped or significantly pared back. That will certainly rid the Government of some of the baggage that was bedevilling it at the end of 2022. However, while undoubtedly welcome in many quarters, just stopping unpopular things will not be enough to restore confidence and improve the Government’s fortunes.

They will need to be accompanied by clear, new policies dealing with what the new Prime Minister has cleverly called the “pandemic of inflation” and delivering demonstrable outcomes to struggling New Zealand households before the election. The mere promise of things getting better over time will not be enough.

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That is where the time factor becomes critical. There are just 57 Parliamentary sitting days before the House is dissolved for the election. When allowance is made for set piece debates, such as the Prime Minister’s Statement, the Budget, financial reviews, and Estimates, as well as the weekly Members’ Day, the actual number of days available to the Government to progress its own legislation reduces to 25-30 days. The conventional “Period of Restraint” – the three months before an election when governments do not make significant new appointments or announce major new policies – begins in the middle of July, further constraining the Government’s ability to implement, rather than just announce, significant new policies before the election.

On top of this is the deteriorating economic situation. Last week, it was confirmed that food prices have risen over the past year at the highest rate since 1990. A few days earlier, a survey reported business confidence levels at their lowest level since that survey was established in 1961. Shortages – from eggs to carbon dioxide – continue to disrupt economic activity and frustrate consumers.

Since Peter Fraser succeeded Michael Joseph Savage in 1940, six prime ministers – Holyoake, Marshall, Rowling, Moore, Shipley and English – who have taken over during a parliamentary term have lost the next election

And the Government’s fiscal position remains tight. In the Budget Policy Statement in December, Finance Minister Grant Robertson warned that “tough choices” lay ahead and that this year’s Budget “won’t be easy”. He called for ministers to look carefully at their current and proposed spending plans and to stop or slow those that were unnecessary. Nothing has changed in this respect over the summer, making it difficult to see what scope there is for significantly increasing assistance to struggling households as Prime Minister Chris Hipkins has promised.

If these challenges are not enough, there is the additional overlay of the Jacinda factor. Since the initial explosion of Jacindamania in 2017, through to the unprecedented 2020 election result, Ardern’s personal support has been a strong factor in Labour’s overall support profile. In the 1980s, US President Ronald Reagan benefited from the support of so-called Reagan Democrats. These were traditional Democratic Party voters who crossed over to support the president to landslide election wins in 1980 and 1984 primarily because of his appeal as the “great communicator” and because of a measure of disillusionment with their own party. While the policy differences between Ardern and Reagan are profound, their ability to communicate simply and directly with voters, especially at times of national crisis, is unmatched in the contemporary context.

The “Ardern Nats” were similarly disillusioned with their party – in 2020 especially – and were won over by Ardern’s compassion, clarity of vision, and ability to communicate directly and reassuringly, especially during the Covid-19 crisis. Their switch of support delivered Labour a swathe of electorates in 2020 it would not normally expect to win or hold – seats such as Ilam, Northcote, Ohariu, Rangitata, East Coast, Nelson, and Otaki – and, more importantly, many thousands of party votes besides.

The question becomes what do these “Ardern Nats” do now? Some have already drifted back to National, as the decline in Labour’s fortunes since October 2021 shows, but a significant number have remained loyal to Ardern. Will they now transfer that support to Hipkins or will they start to look for fresh fields? And will those who remain be enough to give Labour a fighting chance of victory? Without them, Labour will be increasingly forced to look at raiding the Greens and Te Pati Māori to boost its electoral support, which would be detrimental to the centre-left bloc’s overall electoral chances.

Even if he manages to successfully overcome these hurdles, Hipkins still faces the biggest one of all – history. Since Peter Fraser succeeded Michael Joseph Savage in 1940, six prime ministers – Holyoake, Marshall, Rowling, Moore, Shipley and English – who have taken over during a parliamentary term have lost the next election. While Labour’s delight in the smooth way in which this week’s dramatic transition has been handled is understandable and justified, it is but one step in the confirmation process. The final, decisive word rests with voters, who will have their say on election day.

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