Ani O’Brien
Every election campaign we, the voters, are treated to a pantomime in which parties make promise after promise about what they would do if given the power to rule these small isles.
Most of us have been around long enough to recognise that a great deal of these plans are poorly-thought-out fiction but we will attempt to discern the realistic from the outlandish. The others will vote Green until they become a parent, own property or simply fully develop their frontal lobe.
Under MMP, shortly after the votes are counted we will be able to see whether the left bloc or right bloc has the majority and can negotiate forming a government. And oddly enough, the promises made to us in the months preceding will suddenly matter a hell of a lot less.
The government we get is one nobody voted for explicitly. It is assembled afterwards, behind closed doors, by several parties horse-trading over the very policies they spent the previous six months insisting were “bottom lines”.
Some promises do survive intact, others get watered down and some disappear faster than the campaign hoardings the night before election day. Policies will be scrapped over and roles demanded. I like to imagine the Cabinet is put together like Simon Cowell on X-Factor with photos of the contestants on a table being switched in and out.
Power dynamics ebb and flow because it is in these negotiations that the smaller coalition parties hold more power than they will exert during the next term. Without their agreement, we will be plunged into another election, so they have the leverage to make audacious demands. Sometimes that results in two people taking turns as Deputy Prime Minister.
This election’s dynamics feel more chaotic than usual and even more existential, though I suspect we may say the same thing when we endure the process again in 2029.
While the right bloc of National, ACT and New Zealand First comes with its own intriguing circumstances, we have seen them campaign, negotiate and govern together before. We have an element of familiarity with the particular kind of dysfunction they are susceptible to.
Much more interesting is the prospective left bloc of Labour, Greens, Te Pāti Māori and potentially Opportunity – and not just because the possibility is one I regard with particular horror.
Labour’s dilemma
If Chris Hipkins is to become Prime Minister after 7 November, he will need to form a coalition with a group of parties campaigning on some of the most overtly transformative policies we have ever seen. I acknowledge that for some that transformative potential is desirable and for others it will prompt a visit to various countries’ immigration websites.
Labour has thus far campaigned (once it actually climbed out from the rock it was hiding behind) on moderate centre-left policies. It has not introduced much policy at all, preferring to hope the existing government will simply lose the election all on its own.
However, in leaving a void, Labour has allowed plenty of room for its allies to drop policies so wild that Hipkins has had to sprint to rule them out. In fact, he has probably spent more time ruling out the policies of other parties than speaking about his own.
Greens, Te Pāti Māori and Opportunity fundamentally disagree with Labour on taxation, constitutional arrangements, welfare, public ownership and a whole lot more. In many ways, Labour has more in common with National than the parties to their left. This causes significant concern for those who imagine the possibility of a grand blue and red coalition.
However, there is an extensive overlap between Labour and the far left, particularly on climate policy, workplace law, government intervention in markets and the role of the Treaty of Waitangi. It sometimes seems that Labour MPs envy how far their left bloc colleagues can take policy, resenting the fact that in a desire to pursue the centre voter, they have to exercise moderation. Alas, the price of power.
Normally, Hipkins might get away with playing the rule-out game. In the past, Labour has been able to affectionately say “oh what are they like” and assure the public that it will not indulge the over-exuberance of Greens and TPM. This time around there are several problems that make it a lot more difficult.
Grandstanding moments
The first is that between 2017and 2020, we saw that Labour was willing to cave to pressure from the Greens and their proxies to the point where Jacinda Ardern committed an act of total economic vandalism and banned gas and oil exploration. Yes, New Zealand First was there but no one could look at the despair on Shane Jones’ face and doubt that this was not their policy.
Labour struggles to resist opportunities to virtue signal and play the hero to those further left. From declaring that she would have shelter for all homeless people in four weeks, promising to eradicate child poverty, declaring a climate emergency and rushing through flawed gun legislation, Jacinda Ardern and Labour found grandstanding moments too delicious to pass up. Unfortunately, those moments have lasting consequences.
Then, between 2020 and 2023, we saw what happens when Labour is given total power and not required to appease partners.
It turns out that it was more than willing to pursue some of the wilder policies it would usually blame on said partners. We saw extraordinary levels of national debt driven by reckless spending, much of which cannot be blamed on covid-19. We saw a rapid intensification of race-based law and segregation as the Labour Māori caucus flexed its muscles. And there was an incredible amount of failed policies and broken promises.
Are we to trust that three years later, with the same leader and much of the same team, this current performance of moderate positioning will survive beyond the coalition negotiations?
Litany of failure
But the impact of these things relies on the electorate having memories of sufficient capability. It turns out many New Zealanders do not remember the disastrous effect Hipkins had on each of his portfolios. Whatever he touched failed. Law and order, education and health were in dire states when the current lot took over. Ram raids, gang proliferation, increased violence and a feeling that New Zealand was a different place all of a sudden occurred while Hipkins was Police Minister and then Prime Minister.
In charge of health and covid-19, he was in the driver’s seat when his government decided to restructure the health system (including segregating it by race) in the middle of a pandemic. Key metrics like wait times and access to specialists blew out completely. And then there was the total collapse in education standards. Plummeting results and soaring truancy sent a generation of children out of school unable to meet the standards required for university. He was Minister of Education and then Prime Minister.
The short memories of some of our countrymen and women never cease to amaze me.
But the biggest problem Labour faces if it is in the position to negotiate a coalition is that sufficient numbers of New Zealanders do not have short-term memories. Labour and Hipkins are polling terribly and bleeding voters to the rest of their bloc. Their only saving grace is that the electorate is also fed up with National which is struggling in the polls as well.
Much like elsewhere in the West, our major establishment parties are being rejected by larger numbers of voters. Collectively, both parties have never polled so low. This means their dominance comparative to their coalition partners is diminished. Barring a substantial shift in the polls, either Labour or National will enter negotiations with its partners bulked up and ready to demand more concessions than ever before.
Yes, this affects both major parties, but since we are looking at the left in this essay, I will return my attention to Labour. And conveniently, another poll has dropped which makes the problem even clearer.
The latest Post/Freshwater Strategy poll has Labour on 28%, the Greens on 14%, Te Pāti Māori on 2%, and Opportunity above the threshold on 6%. National is on 27%, with New Zealand First on 13%, and ACT on 9%. Both major parties are under 30%, which would have been considered fairly extraordinary not very long ago.
On The Post’s baseline assumptions, National, ACT, and New Zealand First would be entitled to 60 seats between them. Labour, the Greens, and Te Pāti Māori would have 53. Opportunity’s seven seats would take the opposition side to… 60 and we would have a literal 60–60 deadlock.
Nor is this the only poll producing this kind of result. August’s Roy Morgan was even uglier for Hipkins, putting Labour on 24%, the Greens on 15.5% and Opportunity on 9.5%. September’s Curia had Labour at 25.9% and the Greens at 13.9%, although Opportunity was below threshold on 4.5%.
A lot of drama
This would create a very different sort of Labour-led government. In 2017, Labour won 36.9% (remember National had by far the higher vote). New Zealand First had 7.2% and the Greens 6.3%. Winston Peters had enormous leverage because he could choose between National and Labour, but Labour was nevertheless more than five times the size of either support party.
Then, in 2020, Jacinda Ardern won 50% (let’s be honest, it was her not Labour) and 65 seats. The Greens’ 10 MPs were essentially decorative as far as forming a government was concerned because Labour did not actually need them. Even in 2023, National’s 38.1% dwarfed ACT’s 8.6% and New Zealand First’s 6.1%, although needing both still provided David Seymour and Winston Peters with considerable negotiating power.
Now imagine Labour on 25% or 26% and the Greens on 14% or 15%. Calling the latter a “minor party” feels less than accurate. A Green parliamentary caucus half the size of Labour’s is not a party that’s turning up to coalition negotiations grateful for a minister-outside-Cabinet role and a nice little project involving recycling bins. The Greens are bringing policies, demands for key roles and likely a lot of drama.
Hipkins might still be the Prime Minister in this scenario and Labour would almost certainly remain the anchor around which any centre-left government has to be constructed. But an anchor is not the same thing as an emperor and the Cabinet table would be a lot greener and potentially feature TPM and Opportunity, depending on results.
And that is why I am interested in not just what Labour, the Greens, Te Pāti Māori and Opportunity are individually promising. I’m wondering what on earth survives if they have to govern together.
Bargaining power
Hipkins has been trying to get ahead of this problem by drawing some thick red lines and ruling out, scoffing and playing the big party schtick. He recently told media that if Labour forms the next government, the Prime Minister will be him and Barbara Edmonds will be Finance Minister. He also said smaller parties should not be able to force through unpopular changes by holding the country to ransom.
That sounds reassuring if you are a Labour voter who thinks Chlöe Swarbrick’s economic programme and ambition to be Finance Minister is slightly too likely to result in the state relieving you of your possessions. But bargaining power is not determined by issuing the sternest quotes to journalists before an election. It is determined primarily by how many MPs everyone has when the votes are counted.
For example, if Labour has 48 seats, the Greens have 10 and Te Pāti Māori four, Hipkins will have one sort of negotiation. But if Labour has 31, the Greens 18, Opportunity eight and Te Pāti Māori four, he has another negotiation entirely.
The policies
Let’s proceed as if Labour is faced with the latter. What might that mean for policy?
Labour is repeating ad nauseam that its tax policy is based on the introduction of just one tax. It is campaigning on a 28% capital gains tax on profits made after 1 July 2027 from residential and commercial investment property, excluding the family home, farms, KiwiSaver, shares, businesses, inheritances and personal items.
Labour says the proceeds of this tax will fund healthcare, including its policy of three free GP visits. Never mind that we don’t have enough doctors to manage the consequences of the policy and Labour had to adjust it to say you might see a nurse practitioner instead. And never mind that no government service is free because we pay for it with our taxes.
It is difficult to accept Labour’s claims of “one tax” in any case because it also wants to increase the carbon tax, get rid of Investment Boost which will hike taxes by 20% for businesses investing in equipment and introduce a bed tax.
However, even with all of these taxes, when compared with their potential friends, Labour is practically Ayn Rand.
The Greens want a 2.5% annual wealth tax on net assets above $10 million, plus a tax on inheritances and gifts above $1 million, a new 45% income tax rate above $160,000, higher company tax for the largest corporations, a bank levy and various other revenue raisers. They also propose a $10,000 income tax free threshold.
Te Pāti Māori has its own redistributive tax programme, including making the first $30,000 of income tax free. It also has a wealth tax, higher income tax, and more. Opportunity, meanwhile, wants a complete overhaul and proposes a universal Citizen’s Income of up to $370 a week, funded in large part through an annual land value tax alongside a redesigned income tax system and much larger compulsory KiwiSaver contributions.
The trade-offs
Hipkins has, of course, ruled all of this out. Perhaps he means it. I suspect he does not want to introduce any of it. But I also suspect he wants to be Prime Minister even more.
The issue is that if he does manage to hold back the wave of tax reforms, what do the other parties get instead?
There are only so many things Hipkins can say no to. He has to give them something. Political parties do not enter coalition negotiations only to cheerfully abandon their three biggest campaign promises.
The Greens have explicitly made tax reform one of their headline priorities, alongside waterways and energy. If Hipkins is telling them before negotiations have even started that tax reform is dead, the price for their support presumably rises somewhere else.
This is what much of the election coverage is missing. No one is putting pressure on Hipkins to acknowledge he will have to make concessions. Will he walk away from a wealth or land tax if it means having to re-do the election?
And the weaker Labour is on election night, the more he will have to concede.
Leverage and overlap
The Greens are the party with the most potential leverage, but they are not without a disadvantage in coalition negotiations. They have nowhere else credible to go. They either agree or walk away because Chlöe Swarbrick is not going to announce that, after careful consideration, the Greens have decided to negotiate with Christopher Luxon instead.
But “nowhere else to go” is not the same thing as “no leverage”.
The Greens can refuse to enter Cabinet. They can demand a confidence-and-supply arrangement and make Labour govern issue-by-issue so the Greens can hold them to ransom regularly. And if Hipkins does not have the numbers without them, they can simply refuse to make him Prime Minister until an agreement acceptable to them exists.
Climate and energy are the obvious place for them to do significant deals. There is already considerable overlap in party policy. Labour has promised an urgent overhaul of the Emissions Trading Scheme. It says the ETS currently makes it too easy to rely on forestry offsets rather than actual emissions reductions. It also wants to make carbon credits more expensive and says the redesigned system must put New Zealand on course to meet its Paris targets.
The Greens want to go much further obviously, but they are travelling in the same general direction. Their energy policy includes the creation of Kiwipower, a new publicly owned electricity generator. Opportunity has its Abundant Energy policy which calls for an enormous expansion of renewable generation, major grid investment, electrification, low-interest household energy loans, consolidation of electricity distribution companies and the use of Crown dividends from power companies to fund further energy investment.
Labour could agree to something resembling Kiwipower without breaking an explicit campaign promise. It fits Labour’s own renewed enthusiasm for industrial policy, renewable energy, and Crown investment, and it gives the Greens a substantial institutional victory rather than a token ministerial programme.
The same applies to freshwater regulation and environmental policy more broadly. And this should have farmers paying attention. There is every reason to expect a Labour-led government to take a materially more interventionist approach to agriculture, freshwater and land use than Labour governing alone.
Another bottom line
If tax is the obvious economic fight, Te Tiriti is the constitutional one. Te Pāti Māori has released a programme that goes far beyond vague references to “partnership” or “co-governance”.
Its Te Tiriti Entrenchment policy includes a $220 million Mātike Mai Fund over four years to resource Māori-led constitutional transformation, an independent Te Tiriti Commission capable of investigating Crown breaches and issuing compliance orders, and making Waitangi Tribunal recommendations binding on the Crown.
It has made the policy a bottom line for post-election negotiations. And yet Hipkins has already said no to a central part of it.
Asked whether there was any scenario in which he would allow the proposed Te Tiriti Commission to overrule Cabinet decisions, his answer was simply ‘no.’ His position is that Parliament must remain the final decision-making body and that constitutional change cannot simply be imposed in the way Te Pāti Māori is demanding. Good, but if it is a “bottom line”, TPM will walk away from negotiations at this point.
And Te Pāti Māori is not the only prospective partner wanting a significant move in this direction. The Greens explicitly place Te Tiriti and rangatiratanga at the heart of their manifesto.
Opportunity takes a softer institutional approach, but it too wants stronger treaty analysis of legislation, a national constitutional conversation, Māori participation as a treaty partner within that process, and greater autonomy for Māori organisations delivering services.
If Labour and the Greens can govern without TPM, Rawiri Waititi can declare all the bottom lines he likes, but he is out of luck. But if Hipkins’ potential coalition is sitting on 59 seats and Te Pāti Māori controls the votes that get him to 61, Hipkins may be willing to make concessions.
Interventionist state
Without a doubt, under a left bloc coalition, the state would become more interventionist. It is a theme running through all its policy platforms. A Labour-led government reliant on the Greens, TPM, and perhaps Opportunity would certainly preside over a significantly more activist state.
Undeterred by the experience of every socialist country ever, the Greens have announced that they will establish KiwiMart, a publicly owned supermarket chain built by forcing the sale of at least 120 existing supermarket stores and distribution capacity into public ownership.
Labour has not endorsed that policy and has released its own supermarket competition plan. One would have thought this would be a policy it would respond to emphatically, but until recently Hipkins has dodged questions despite National’s attempting to apply pressure.
Zooming out from the individual policies, the likely philosophical direction of the left bloc would see much more Crown capital, state-created and owned institutions, public investment, intervention in concentrated markets, aggressive regulation and just more involvement of the government in our lives and businesses.
Reaction to covid-19 measures showed us that some Kiwis crave the paternalism of an interventionist state, but I am not one of them.
The spend-up
Apart from being intrusive, this kind of governance is hugely expensive. The Taxpayers’ Union has created what it calls a “Bribe-o-meter” which tracks the cost of the policies and promises of each party.
It presents a stark contrast between the left and right blocs. The combined spending of all three current coalition parties is about the same as Labour’s alone. That is before the Greens and Opportunity potentially drag them into stratospheric spending.
The Greens are proposing to rack up about 4.7 times what Labour is planning to spend and more than 122 times that of National. Te Pāti Māori’s spending cannot be ascertained as its plans do not provide enough detail and are so expansive.
Even with the eye-watering tax increases the left bloc is proposing, this spending would exceed the revenue they raise and the difference would have to be borrowed. And debt is not free money conjured up by Grant Robertson’s ghost. It has to be serviced, and eventually refinanced, from future tax revenue. From future taxpayers. That’s us and our children and our grandchildren. And the more we have to pay back, the higher the interest bill and the less we will have to spend on vital public services in the future.
New Zealand is already forecast to spend around $10.2 billion on finance costs (interest) in 2026/27 which is more than the entire law-and-order budget. This will grow year-on-year if another mountain of borrowing is added.
As I said, every extra dollar spent servicing debt is a dollar that cannot be spent on hospitals, schools or infrastructure, and higher debt leaves us with less room to respond when the next recession, earthquake, pandemic or some other emergency turns up. Treasury expects net core Crown debt to peak at 46.1% of GDP in 2027/28 under current policy.
Poor behaviour
It is worth noting that Labour, the Greens, Te Pāti Māori and Opportunity would not necessarily sit together around the Cabinet table. It obviously depends on the numbers on November 7 but a Labour-Greens coalition, for example, could govern with confidence and supply from another party. Alternatively, Labour could attempt a minority government and negotiate support issue-by-issue.
The Greens have never been in Cabinet before. Previously they have had ministers outside Cabinet like Climate Change Minister James Shaw and the Minister for the Prevention of Family and Sexual Violence, Marama Davidson. She was also the Associate Minister of Housing (Homelessness) which went backwards under her watch.
It would be much easier in many ways for Labour to keep Te Pāti Māori out of the formation of a government because if their behaviour this term is anything to go by, they will present headache after headache for the rest of the coalition.
It is also fundamentally different in that its explicit purpose is to work for only one part of the electorate whereas the others are – at least in theory – parties for all New Zealanders. If Te Pāti Māori genuinely regards its proposed constitutional reforms as a bottom line and Hipkins genuinely means “no” when asked whether a Te Tiriti Commission could overrule Cabinet, perhaps the answer is that they do not form a coalition at all. That is, if they have the luxury of choice.
The choices
Voters need to understand before election day that they are not merely choosing between National’s manifesto and Labour’s manifesto. Under MMP, your vote helps determine the negotiating strength every party takes into the room after the election. That means the policies of the smaller parties deserve far more scrutiny than they often receive.
If I had to guess today – just over four weeks out from the election – I would expect Labour to try to hold the ground on taxes as much as possible, but a watered- down concession might be made on one additional tax. However, we would expect to see a considerably less Labour-like government elsewhere. The Greens would likely find substantial wins in climate, electricity and environmental regulation. A ‘lite’ Kiwipower would not surprise me. Additionally, I would predict more aggressive approaches to welfare and employment protections.
I would expect Labour’s treaty restoration programme to be pushed further by the Greens, Te Pāti Māori and its own Labour Māori caucus. Hipkins is extremely unlikely to agree to an unelected body capable of overriding Cabinet after expressly ruling it out, but that does not mean Te Pāti Māori will walk away empty-handed if its votes are indispensable. There would likely be a co-governance bonanza with commitments to initiate a constitutional review of some kind.
The peculiar thing about elections under MMP is that nobody is campaigning on the government we may actually elect. Labour is not campaigning on Kiwipower, KiwiMart or constitutional transformation, but these could be major policies if Labour leads the next government.
Likewise, the far left parties are not campaigning on watered-down versions of their policies, yet if these parties are required to construct a government together, some combination of these retreats and concessions will have to happen.
The reality
And that is why Labour’s miserable polling is far more significant than whether Chris Hipkins has an embarrassing election night. A Labour Party on 25% or 26% cannot swagger into negotiations with a Green Party on 14% or 15% and behave as though everybody else is merely there to carry its bags. The smaller Labour is, the more expensive every ‘no’ becomes.
Perhaps Labour really will hold every line it has drawn. Perhaps the Greens will abandon their wealth tax, Te Pāti Māori will soften its constitutional demands and Opportunity will quietly put its land tax through the shredder without asking for much in return. Stranger things have happened in politics, but I would not bet my house on it. My landlord would not like it for a start but secondly, it is not a safe bet.
The manifesto that matters most at this election will not be released before 7 November. It will be written afterwards, in a negotiating room, by whichever parties have enough MPs to make the others listen.
And if current polling is even vaguely indicative of where we land, Chris Hipkins may discover that being the largest party on the left is very different from being in charge of it.
Ani O’Brien
Ani O’Brien is a writer and political commentator. This column first appeared on her Substack and is republished with permission
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