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New Prime Minister, New Labour?

In brief

  • So far Prime Minister Hipkins is continuing the direction laid out by Ardern.
  • He says Labour is prioritising the inflating cost of living, but is still spending.
  • Hipkins says the Three Waters reforms will continue but be re-evaluated.

A refocused Labour?

Prime Minister Jacinda Ardern resigned on 19 January 2023, after becoming a highly divisive leader. She passed the baton to Chris Hipkins, previously Minister for the Public Service, Minister of COVID response and then Minister of Police. 

Hipkins worked closely with Ardern as part of Labour’s inner circle. What indication is there that he will take the Labour party in a different direction than his predecessor?

Hipkins has reshuffled Cabinet, and is promising a more “focused” Labour, with an “absolute priority” on addressing the increasing cost of living. But Ardern already signalled this the month before.

The increasing cost of living is a result of both global inflationary forces and domestic policies, especially COVID lockdown subsidies and border controls. Labour has been sending mixed messages about reducing spending to help the situation. Finance Minister Grant Robinson announced an extension of the public transport subsidy and the “cut” to the road user charge and petrol tax (Labour’s original increase is halved), using money that was set aside for COVID.

Prime Minister Hipkins says he wants to strengthen core services like health and education, and improve access to housing: “You shouldn’t have to be on a six-figure salary to afford to buy a house to support your children and to have enough to retire on.” These are nice aspirations, but Ardern said the same sorts of things with little to show in results.

Also as Ardern promised, Hipkins says Labour will postpone projects that “aren’t essential right now”. But no specific projects have been singled out. Speculation is this may include their compulsory unemployment scheme or TVNZ-RNZ merger.

Re-evaluating, or just delaying?

The most unpopular of all of Labour’s programs is Three Waters, in particular the co-governance aspect that gives control to unelected Māori iwi leaders. Cabinet agreed at the end of 2022 to put the agenda on hold. The new Prime Minister has demoted the program’s champion Nanaia Mahuta, but is still defending Three Waters, promising to re-evaluate but not scrap it.

Labour hid their co-governance agenda from the public and their coalition partner NZ First. NZ First party leader Winston Peters called the policies “racist, separatist, secretive”. Hipkins now admits a need for the Government to be more clear about what co-governance means, but he doesn’t appear to be clear himself, despite being an integral part of the Government who passed these laws.

What will he do to convince voters he is not just going slow on unpopular programs in order to get re-elected, only to then push ahead with those same programs? In his own words after being confirmed as Labour’s new leader:

The current global economic conditions do demand a refocus and I intend to provide that, but we don’t need a change of heart.

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