Week in Politics: Fiscal bomb, Nazi comments ensure high-octane coverage for Winston Peters

By Peter Wilson*

Analysis: Winston Peters 'drops a fiscal bomb on his own government' and then gets into a bizarre row over his Nazi ideology comments. The government orders Kainga Ora to tighten up on unruly tenants and Chris Hipkins makes the unusual admission that Labour could have done more to deal with them.

Commentator Vernon Small posed a question this week in his Sunday Star-Times column: How big is your fiscal hole, National?

Small answered it himself, and the figure he came up with gave the government an uncomfortable start to the week.

He followed the funding track for tax cuts since the election, from the foreign buyers' tax which was scuppered by NZ First to Inland Revenue saying last week the expected revenue from taxing overseas online gambling was about $150 million over four years - $550m less than National had counted on.

"Remember when National's tax plan was rock solid, and its architects assured us they understood numbers?" Small said.

"It seems like only yesterday, but it was $5.6 billion ago."

Finance Minister Nicola Willis was the most obvious first responder to this but NZ First leader and Deputy Prime Minister Winston Peters got there first.

Stuff reported that in his State of the Nation speech delivered on the same day the column was published, Peters told his audience: "Mr Small is right, of course."

That must have surprised Small. Could it be the first time Peters has ever said a journalist got something right?

Peters later told reporters there was "a huge gap" in funding for tax cuts.

Media outlets picked up the story, running the common thread that Peters had confirmed a $5.6b fiscal hole.

"Winston Peters dropped a mega fiscal bomb on his own government," said The Spinoff.

It went on to refer to an article by the Herald's veteran political journalist Audrey Young.

"The deputy prime minister was undermining the work of the finance minister at a pretty delicate time in the budget cycle," Young said.

"That is unheard of, especially at a time when coalition relationships are going well. Imagine what Peters would be saying if relations were strained."

Willis couldn't have been pleased, and very soon the inevitable happened.

"Peters, Willis at odds over potential $5.6b budget hole" was the headline on RNZ's report after Willis was interviewed on Morning Report.

"Willis rejected claims the government was facing a $5.6 billion fiscal hole," the report said, and it quoted the finance minister: "What we said was that our plan overall was cautious and conservative, it had multiple elements to it and we acknowledged that there would be some overs and unders."

Also inevitably, this situation raised questions about whether the government's promised tax cuts could be afforded.

Willis said they could. "Taken together, the savings and the revenue streams mean that we can afford to deliver tax reductions."

However, neither Willis nor Prime Minister Christopher Luxon have given a categorical assurance the cuts will begin on 1 July, and appear to be cautious about that.

Luxon told Newshub's AM Show it was the government's "intention" to deliver them in July, that's the closest he has come.

Persistent attempts to gain some clarity received the same answer from Luxon and Willis: Wait for the Budget.

Peters had certainly made an impact with that speech, and there was more controversy to come.

Nazi comments cause a furore

A Stuff headline read: "Peters compares co-governance with 'Nazi Germany' and RNZ reported: "Winston Peters compared co-governance to Nazi Germany's race-based theories in his State of the Nation speech."

The Herald's headline ran: "NZ First leader Winston Peters compares co-governance to Nazi Germany." Other media outlets carried similar reports.

Could they all have got it totally wrong? According to Peters, yes they did.

He issued a media statement the following day which was heavy duty even for him.

"Many in the mainstream media have taken what was said in New Zealand First's State of the Nation speech in Palmerston North on Sunday and deliberately, deceitfully, and ignorantly misrepresented what I said and why I said it," Peters said.

"The headlines and commentary on the news stated that I 'compared co-governance to the holocaust'. This line has been repeated over and over again."

Peters then said in his statement he had been referring to Te Pāti Māori co-leader Rawhiri Waititi having made comments about Māori having "superior genetics".

He then quoted from his own speech: "It was not just ideological theory, it was race-based theory. Where some people's DNA made them, sadly, according to these people, and condoned by their fellow travellers, their DNA made them somehow better than others."

And here's Peters' version of what he said next: "I have seen that sort of philosophy before, I saw it in Nazi Germany, we all did. We have seen it elsewhere in the world in the horrors of history, but right here in our country tolerated by the very people whose job is to keep the system honest."

Peters said he had made no mention of co-governance or the Holocaust.

Stuff's Tova O'Brien took him on over that.

"Peters made the comments in a part of his speech attacking the previous Labour government for 'the insidious creep of racist co-governance that has spread through legislation and the public sector'," she said.

"He goes on to lament that 'when you have the audacity to say there's something dramatically wrong here, not just about the policy but about the lack of warning, they shout racist.

"(It's) Not just ideological theory, it was race-based theory."

O'Brien said Peters was arguing that his Nazi comments were about the tangent he was on about DNA and therefore were in reference to Te Pāti Māori.

"But where he comes unstuck is in speaking to the media immediately after his speech, when Peters was asked: 'You compared Labour's approach to co-governance to Nazi Germany, is that appropriate?' and Peters replies firmly: 'Yes it is'." O'Brien said.

She concluded "you could spend a lifetime trying to decode Peters' semantic quagmire and still emerge none the wiser.

"Peters clearly went too far in drawing comparisons with Nazi Germany."

O'Brien said the bigger question was why Peters was trying to divert attention and reverse-engineer a justification for the Nazi comments.

She said Luxon talked to Peters about the language he used, and the next morning Peters doubled down saying: "I'm going to kick back real hard".

"That's when he decided to blame the media rather than take any blame himself," O'Brien said.

She got that right because TVNZ carried this report: "Deputy Prime Minister Winston Peters has claimed that Prime Minister Christopher Luxon had been 'misinformed' by the media after the two spoke about Peters' recent references to Nazi Germany."

Speaking on the network's Breakfast programme, Peters said: "He (Luxon) said to me 'I was told this, this and this' and I said to him 'by who? Did you hear my speech? No.

"And then I realised, like most New Zealanders, all the way at the top, he's been misinformed by you media people who think your shill leftie biased message is going to triumph."

It was difficult to trace exactly what Peters was referring to when he accused Te Pāti Māori and Waititi of making comments about superior DNA, but it seems he wasn't the first one to notice it.

ACT leader David Seymour issued a statement in September 2022 headed 'Racial discrimination by Te Pāti Māori must stop'.

In it he said the party's sports policy, posted on its website, made the claim: "It is a known fact that Māori genetic makeup is stronger than others."

Seymour said he went to Race Relations Commissioner Meng Foon, who five days later replied that he had notified Te Pāti Māori of his concerns.

Peters has accused the media of failing to call out Te Pāti Māori over this, but he wasn't entirely correct.

TVNZ's Jack Tame asked Waititi about it during an interview.

"It was in your sports policy on your website. Is that racist?" he asked Waititi.

Waititi replied: "How can it be racist when you're trying to empower a people that are climbing up on the bottom of the bonnet of colonial violence for the last 183 years?

"How was that imposed on anyone else? We're talking to ourselves."

Tame said when it was posted on their website, they were talking to everyone.

He noted the statement had been taken down.

Tougher stance on bad behaviour

The government's main business of the week was an instruction to Kāinga Ora - Homes and Communities ordering it to take a tougher stance on unruly state house tenants.

There have for years been numerous horror stories about intimidation, harassment and assaults on neighbours, and Luxon said the government had decided "enough is enough".

Kāinga Ora was told the Sustaining Tenancies Framework, introduced by the previous National government and designed to keep tenants in their homes, was ending.

Housing Minister Chris Bishop said complaints about unruly neighbours were running at 335 a month and yet in 2023 there had been only three evictions.

Kāinga Ora has also been told to focus on rent arrears.

Bishop said the total debt had risen from $1 million in 2017 to $21 million in 2023.

The number of tenants owing rent nearly doubled to 9519 during that period and more than 450 each owed more than $10,000.

Bishop said the way the Sustaining Tenancies Framework was being run meant there were no incentives for tenants to improve their anti-social behaviour or stop deliberately damaging properties.

Bishop and Luxon emphasised that the vast majority of tenants behaved properly and said the situation wasn't fair on the 25,000 families on the waiting list.

They also emphasised they didn't want to evict anyone, they wanted the bad tenants to realise there were consequences for their actions.

No new rules have been imposed, Kāinga Ora has been told to use the tools it has to deal with unruly tenants.

There's not much doubt that it will be a popular policy generally and particularly for those tenants at the coal face, but the Greens described it as "the politics of punishment" and said it would be cruel if tenants were evicted during a cost of living crisis.

Labour leader Chris Hipkins made the unusual concession that the previous government could have done more to deal with disruptive tenants.

He said he had "some sympathy" for the government's actions, RNZ reported.

"We did make some changes but I think it's probably an area where we could've done more," he said.

He preferred relocation to eviction. "About 90 percent of the cases where relocation has happened, the problem actually goes away."

During media interviews tenants who had suffered from badly behaved neighbours welcomed the announcement but were sceptical about Kāinga Ora actually doing something about it.

State sector jobs axed

By the end of the week the human cost of the government's cost-cutting policy was making headlines, and it was just the start.

More than 400 jobs could go as the Ministry for Primary Industries and the Ministry of Health look to cut their budgets, RNZ reported.

They're trying to meet the government's order to cut costs by 7.5 percent.

Other government departments are expected to follow within days.

The Herald reported that MBIE, one of the largest, had proposed another round of voluntary redundancies.

Since early December MBIE has not been filling vacancies.

Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire.