Oliver Hartwich: New Zealand's cliffhanger election could be a major surprise

With only a few days left until New Zealand’s general election, you might think the outcome should be easy to predict. Many polls have shown that New Zealanders think the country is on the wrong path. Usually, this would point to a win for the opposition.

However, the race remains close. Despite current trends, we cannot dismiss the possibility of another Labour government. This has opposition strategists worried about losing what seemed like an unlosable election.

This unusual situation could be a fitting end to an unusual parliamentary term. The previous election in October 2020 happened just as Prime Minister Jacinda Ardern had isolated New Zealand from the global Covid pandemic through strict early lockdowns and closed borders. That approach won her an absolute majority.

Initially, Ardern’s pandemic management approach, bolstered by her persuasive communication skills, seemed successful. By the end of 2020, about 70% of New Zealanders felt the country was on the right track.

However, during Ardern’s second term, the gap between her lofty speeches and real achievements grew significantly. Across many policy areas, the government fell short of its stated ambitions.

By December 2022, the ‘right direction’ sentiment had fallen to 32%. Ardern resigned as Prime Minister in early 2023 after her approval ratings turned negative for the first time. She has since relocated to Harvard and is rarely seen in New Zealand these days.

Her successor, Chris Hipkins, had a strong start, mainly because he was not the polarising figure Ardern had become. Nonetheless, Hipkins inherited Ardern’s problems: an undisciplined cabinet, unpopular policies, and a government that seemed weary after just two terms.

Had he chosen to, Hipkins could have won a snap election in April. Instead, he let voters remember that, at its core, this was still Ardern’s Labour government.

Hipkins then faced multiple challenges, including a declining economy, a minister defecting to the opposition, multiple resignations over scandals, and a deterioration in law and order. These issues contributed to Labour’s decline in the polls, dropping to as low as 26% - just over half of their 2020 result.

The opposition seemed to be in a better position. They benefited from public dissatisfaction and constant media reports about worrying social issues. It seemed a textbook case that oppositions do not win elections, but rather, governments lose them.

So why is the election outcome still uncertain? Mistakes in the campaigns of the larger National Party and the smaller ACT Party could be the reason.

Despite claims to the contrary, these parties are not fond of each other. National sees ACT as a minor and slightly annoying player, while ACT views National as lacking in ideology and only interested in power.

National’s leader, Christopher Luxon, is a former Air New Zealand chief executive, while ACT’s leader David Seymour is a former think-tank researcher and policy wonk. Their differing personalities make it hard for them to present a united front. In fact, they have little in common.

Instead of cooperating, National and ACT often seemed to work against each other as much as against the Labour government. This has been compounded by policy differences.

ACT wants to drastically cut taxes and spending, while National wants tax cuts but hesitates to cut spending. To balance its plan, National even proposed some new taxes.

Labour seized the opportunity to criticise National’s fiscal plans, questioning whether they would even raise the revenues promised. Meanwhile, ACT began questioning its willingness to form a coalition with National, given their apparent lack of fiscal ambition.

As a result, both National and ACT took a plunge in the poll, leading to the next strategic mistake.

For months, National had not ruled out a coalition with New Zealand First, a smallish populist party led by veteran politician Winston Peters. Peters, the eternal kingmaker of New Zealand politics, gains much of his relevance from larger parties’ willingness to work with him.

Had National ruled Peters out (as Labour had before), Peters would not have had much oxygen in the election campaign.

But following their dip in the polls, Luxon decided to rule Peters in. Then, in a TV debate, Luxon then claimed not to know Peters well and expressed reluctance to work with him. It did not make much sense, and Seymour’s rapport with Peters is even worse.

Instead of focusing on the potential disarray of a Labour-Greens-Māori Party coalition, attention is on National and ACT’s complicated relationship with Winston Peters.

National’s campaign seems to have lost its way. Its flawed tax plan is under scrutiny, its preferred coalition partner ACT is annoyed, and it now is in an awkward position vis-à-vis Peters. A senior National politician even speculated about a second election due to failed coalition talks – when there has not even been a first election yet.

Voters might overlook these issues and vote against Labour anyway. Or the disarray in the opposition might drive them back to Prime Minister Chris Hipkins.

What should have been an easy win for any opposition could turn out to be a major surprise. On Saturday, we will find out.

Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE.