NZCPR Newsletter: Losing Trust

The latest polls show the Coalition is failing to capture the hearts and minds of voters. Roy Morgan tells the story: support for National was down 2 percentage points from a month ago to 29 percent, ACT was unchanged on 10.5 and New Zealand First dropped 2.5 to 7.

In comparison, Labour increased 3 to 34, the Greens were up 2 to 13.5, while the Maori Party dropped 1 to 2.5 percent.

In other words, if an election was held tomorrow, Labour, the Greens and the Maori Party would be in government with 50 percent of the vote - up 4. The Coalition would be relegated to the opposition benches with 46.5 percent, down 4.5 to its lowest level of support this year.

So, what’s going on? Why aren’t the Coalition’s efforts to repair the damage created by that disastrous two-term Labour Government resonating more strongly with voters?

More importantly, why aren’t voters terrified of the prospect of being governed by the toxic trio - the grossly incompetent Labour Party, the extremist Greens, and the racist Maori Party?

The legacy media’s left-leaning bias has a lot to answer for - but so too does National’s lack of leadership. Media coverage is now more politically charged than ever before, with, ironically, the State-owned TVNZ and Radio NZ amongst the worst offenders.

Why the Coalition hasn’t dealt with this absurdity, nor terminated Labour’s Public Interest Journalism Fund - a taxpayer-funded vehicle designed to advance their radical He Puapua agenda to replace democracy with tribal governance - which doesn’t expire until 2026, remains a mystery.

Overall, it appears the public are losing trust in the Coalition because they are not doing enough to address the deep concerns of voters who elected them in 2023 to rid us of Labour’s appalling legacy.

And that’s the problem. In spite of all their assurances, the economy is still failing to fire, cost-of-living pressures feel as bad as ever, and the tribal takeover continues its rapid advance. Exasperated voters are now pointing an angry finger at National and its leader.

A further problem is that all around the world we are witnessing real reform. In comparison, like Nero, the Coalition appears to be ‘fiddling while Rome burns’.

In Argentina, President Javier Milei has taken a chainsaw to government, introducing sweeping reforms that are transforming the country from a basket case into an economic powerhouse. By dramatically reducing the size of the State bureaucracy, he’s not only eliminating wasteful spending but is slashing regulation and red tape in the process. Lower taxes and fewer barriers to growth have led to an economic resurgence, resulting in annual GDP growth of five percent and a budget surplus - eliminating Argentina’s fiscal deficit for the first time in over a century.

While there’s still a long way to go to “fix” the deep systemic problems caused by decades of tax-and-spend socialism, support for the President and his transformational reforms remains strong.

In the US, President Trump has also introduced sweeping reforms. Aimed at increasing economic resilience, he’s rejecting the socialist de-industrialisation agenda of the UN Paris Agreement, increasing tariff revenue in order to lower income tax, and eliminating government waste by purging ‘woke’ ideology from the State sector to stimulate growth and create work for Americans.

In the UK, the Reform Party is sweeping aside the traditional political establishment, with opinion polls showing it would decimate both Labour and the Conservatives if an election was held tomorrow. The appeal is its straight-talking common-sense approach.

Emulating Presidents Milei and Trump, Reform plans to pull the country out of Paris, as well as eliminate the dangerous social justice and woke agendas that are dragging the UK down.

Against this backdrop, our government’s failure to deliver reform in key areas of public concern, is creating disillusionment.

Not only has it failed to significantly cut Government spending, it has neglected to materially reduce the bloated public service which rose from 49,000 employees in 2017 to 65,000 under Labour. Since most of the increase were “Diversity, Equity, Inclusion” hires, not only is the Coalition’s refusal to act costing $1.5 billion a year, but unproductive socialist activists, who are standing in the way of reform, remain embedded throughout the public sector.

It is these extremists who are pushing back against simple things like ensuring front-facing official communication channels with the public through websites, emails and letters, are in English, not Maori. They are also, no doubt, the reason taxpayers are still funding an organisation like the New Zealand Council for Educational Research that has “Decolonising education” as its primary objective!

Making matters worse, instead of being laser focussed on delivering their election promises, the Coalition has now become a cheerleader for Labour’s misguided attack on supermarkets. Instead of admitting government policy is largely responsible for escalating food prices, they too are blaming a lack of competition.

The key decisions that set the food price crisis in motion were made by Labour. Framed as bold climate leadership by Prime Minister Jacinda Ardern, her 2018 Captain’s Call banning offshore oil and gas exploration, and the 2019 Zero Carbon Act introducing the harshest emissions restrictions in the world, came with predictable consequences: energy shortages and rising fuel prices, as the cost of carbon soared from $17 in 2017 to $88.50 in 2022.

To deflect attention away from their own culpability for the inevitable escalation in food prices that followed such a dramatic rise in costs at every step of the supply chain, Labour orchestrated a high-profile crackdown on supermarkets. Under the guise of protecting consumers from price gouging, they shifted public attention to retail margins, claiming they were protecting consumers from higher prices, when in reality their own policies were to blame.

Even at today’s carbon price of $56 a tonne, the costs on households is significant. A 17 cents per litre carbon levy on petrol adds around $10 onto the cost of filling an average car, while a 2.5 cents per kilowatt-hour levy on electricity adds around $20 to an average monthly power bill.

While carbon charges are clearly putting direct pressure on households, the acceleration in operating costs on businesses - coupled with rising gas prices and relentless minimum wage increases - has not only forced up the price of all goods and services throughout the economy, but has led to widespread business failure.

Such factors contributed to Fonterra’s decision to sell off its much-loved iconic Kiwi brands including Anchor, Mainland, Fresh’n Fruity, Kapiti and De Winkel.

Milk, butter, cheese, and yoghurt are all energy intensive, requiring heat, steam, and refrigeration. But as the gas shortage bit and ETS charges escalated, consumers - already struggling under the cost-of living crisis triggered by Labour’s reckless Covid overspending - turned to cheaper house brands.

With Fonterra’s consumer division losing NZ$164 million after tax in 2023, despite strong brand recognition, while the ingredients business posted a NZ$276 million profit, showing stronger returns and growing global demand, the Board announced their sale to the global French food giant Lactalis for up to $4.22 billion. Securing long-term milk supply agreements, and a capital return to farmer-shareholders, the company is pivoting to its strengths: ingredients, foodservice, and global B2B partnerships.

This week’s NZCPR Guest Commentator, former Federated Farmers President and MP Owen Jennings, reflects on what he believes is a lost opportunity for New Zealand:

“As a former dairy farmer, I was shocked to learn that Fonterra is selling its brands’ business. For all my dairy farming years I heard that we needed to be closer to our consumers, that branding was an integral part of extracting profit from product sales and that we needed to better understand what our customers wanted. We needed to own the food chain – ‘plough to plate’.

“Then I read the explanations from CEO Hurrell. They made sense. Why keep on investing into the black hole that is marketing? A return of 4 or 5 percent sounded lame compared to double that for ingredient sales. It sounded even more lame in comparison to the return from organic product sales which are in the 40 percent return range.

“I just hope that the future doesn’t come down hard on the sale as short-sighted, a lost opportunity and lacking imagination.”

While the Fonterra Board has agreed to the sale, it still needs to be ratified by shareholder farmers in October, then receive regulatory approval.

When the Coalition was elected, instead of recognising the damage the zero-carbon agenda was causing the economy and taking their foot off the “de-industrialisation” accelerator, National ploughed on.

No doubt hoping they too could deflect attention from the impact their policies were having on food prices, they not only continued Labour’s attack on supermarkets, blaming the rising prices on a lack of competition, but they have even talked about imposing structural changes on the sector – which is an astounding development given they like to think of themselves as champions of the free market.

What’s worse, is that in their haste to press ahead with their climate agenda, National is now involved in a misguided attempt to force farmers to use genetically engineered methane inhibitors on their livestock – including through bolus drenches, vaccines, and grasses.

To facilitate this, they are now rushing ahead to liberalise the use of GE in New Zealand, not only by ditching the requirement for all GE food to be labelled, but also, through the Gene Technology Bill, deregulating gene editing itself.

Preventing New Zealand consumers from being able to tell whether or not they are buying GE food is, however, a step too far that is almost certainly undermining trust in the Coalition.

In fact a recent Farmers Weekly poll asking whether all food products should state on the label whether they have been genetically modified resulted in an overwhelming 95.4 percent of respondents saying ‘yes’, while only 4.6 percent said ‘no’.

Meanwhile with New Zealand’s food price rises largely driven by the impact of Labour’s gas shortages and National’s failure to halt UN de-industrialisation, there’s more pain to come. Business NZ has warned that a raft of major manufacturing company closures is on the cards as escalating energy costs force operational cutbacks, staff layoffs, and price increases.

While the Coalition has responded to the natural gas shortage by overturning Labour’s exploration ban and rolling out the red carpet to attract investors and incentivise new development, this is not a problem that has a quick fix.

In contrast, reducing the cost of carbon could be achieved relatively swiftly through regulatory changes. Although New Zealand’s climate targets under the Paris Agreement appear daunting on paper – with half of our reported emissions coming from methane from agriculture – the picture is distorted by the continued use of a flawed metric that significantly overstates the warming effect of methane.

As the Chairman of the New Zealand Climate Science Coalition and former Minister of Science and Technology Barry Brill explains: “If methane will cause only 25 percent as much warming as previously expected, then we won’t need those huge reductions, that appear in the now-outdated scenarios.”

In other words, if the equivalence values for methane were corrected, most carbon restrictions could be removed.

With climate policies decimating industries and causing real hardship for families, to prevent the situation from spiralling further out of control, National should announce a pause on all climate-related restrictions while the methane metrics are reviewed, and a recalibration of targets undertaken.

With the climate consensus now visibly crumbling around the world, sacrificing New Zealand’s economic wellbeing for over-stated Paris goals is impossible to defend, especially with China, India, Indonesia - and soon America – all charging ahead creating growth and prosperity on the back of affordable energy.

The Coalition has a lot on its hands, but it is in danger of throwing away the next election because it is losing the respect and trust of voters. ACT and New Zealand First are reading the room and both are raising legitimate concerns about the Coalition’s direction. National needs to listen and learn, before it’s too late.

Please note: To register for our free weekly newsletter please click HERE.

THIS WEEK’S POLL ASKS:

*Should the Coalition press ahead with the UN Paris Agreement’s de-industrialisation agenda, or press pause?

Dr Muriel Newman established the New Zealand Centre for Political Research as a public policy think tank in 2005 after nine years as a Member of Parliament. The NZCPR website is HERE. We also run this Breaking Views Blog and our NZCPR Facebook Group HERE.