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Is Hipkins’ policy bonfire more smoke than fire?

In brief

  • Hipkins has scrapped two policies. The rest are only postponed. 
  • Hipkins said his changes are the most significant he will be making. He’s kept many publicly-opposed programs like co-governance and Three Waters.
  • Increasing the minimum wage helps those on very low incomes, but promotes the wage spiral and inflation.

A lot of smoke

The media have been playing up the significance of Labour’s so-called “policy bonfire”. Prime Minister Hipkins scrapped two Labour policies for good. TVNZ/RNZ merger and the biofuels mandate. Income insurance and the Hate Speech Law have been put on the back burner, but not scrapped. Three Waters will be tweaked, but currently there’s no mention how. 

The media have also helped Labour promote their narrative of “more bloke, less woke”, reset to the right by playing up the fact Hipkins doesn’t mention “Aotearoa”. He talks about “focusing on bread and butter”. He has “demoted” Mahuta. There has been very little highlighted in the media on the fact Hipkins was a party to Labour’s unpopular agenda from the very beginning and ditching those particular policies was a no-brainer.

It’s also noted  there are no policy reversals in Hipkins’ own portfolios of policing and education. No mention either of expanding the scope of the COVID-19 inquiry.

While an implicit acknowledgement of the public’s rejection of Ardern’s idealism, there’s suspicion that, should Labour win the next election, many of the unpopular agendas will be brought right back. 

Co-governance and Three Waters

Hipkins is happy to say that co-governance is not well understood, but many think they know enough without the fine details. The removal of democratic and local accountability in favour of iwi elite in a manner that privileges the minority over the majority based on race is well understood and hugely unpopular. 

Mahuta’s demotion, while a welcome step by many across the political spectrum, doesn’t fundamentally change Labour’s trajectory. Co-governance is still part of the hospital system and Three Waters, although Hipkins has said there will be updates on Three Waters coming. Māori leaders at the Iwi Chairs Forum have warned Hipkins, however, to stay the course on co-governance legislation that’s been recently passed. They argue scrapping it would be racist, in the now typical resort to exaggerated name calling to try to get your way. 

Minimum wage increase

The Hipkins Government has also announced the minimum wage will increase to $22.70 as of 1 April 2023. This is par for the course of ‘let’s give some lollies to our base in an election year’, especially because many of them may not have been very happy with Ardern’s extreme ideological policies which had not been put to the electorate.

The 7% increase has been slammed by Retail NZ. With the increased stress on business owners, they say the hike in minimum wage may result in some belt tightening and job losses. 

While it is very hard for an adult living on their own to make ends meet on minimum wage, it should be noted that many impacted by minimum wage hikes are teenage workers who generally also have some kind of parental assistance.

The lobby group notes many small business owners do not even earn minimum wage themselves. When polled, over half the respondents said they would increase prices. 

While a welcome relief to those on minimum wage, the inflationary policy is at odds with Hipkins’ rhetoric about fighting the cost of living crisis.

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