Week in Politics: Opposition wants inflation to decide the next election

By Peter Wilson*

Analysis - Opposition parties see inflation as their ticket to victory in the next election, Prime Minister Jacinda Ardern finds an unusual ally after the controversial maskless photo and a new book reveals the horror story behind National's leadership coups.

Willis and party leader Christopher Luxon consistently link inflation with what they call Labour's "addiction to spending".

The announcement on Monday that inflation had reached 7.3 per cent began another surge of opposition criticism.

"As New Zealand again faces record high inflation, opposition parties are keen to make it an issue that decides the election next year," RNZ reported.

Of course they do. The soaring cost of living affects nearly everyone, there isn't much the government can do about it and it's already costing Labour votes.

National and ACT both said the government needed to take some responsibility by cutting spending, cutting regulatory bottlenecks and cutting taxes.

"It can't simply blame these issues on overseas factors. It needs to front up and do its bit," said National's deputy leader Nicola Willis.

Willis issued a statement calling for a "credible plan" from the government.

"A real plan would focus on strengthening the productive economy and unlocking the bottlenecks in the economy that are worsening inflation, including fixing failed immigration settings and stopping adding costs to business," she said.

ACT leader David Seymour said the government had tried every avoidance measure in the book. "We clearly have a permanent and to some extent domestic inflationary problem."

Finance Minister Grant Robertson, who had known what was coming, called a surprise press conference on Sunday to get ahead of the game.

He announced the petrol excise cut and half-price public transport were being extended, which Willis called "a band-aid on a band-aid".

Opposition parties have persistently blamed the government for not having a plan to tackle inflation, which begs the question: If a successful plan can be devised and implemented, how is it that the UK and the US haven't been able to do that? They must have some savvy planners in their governments and in both countries it's running at over 9 per cent.

Robertson was asked on RNZ's First Up programme what more the government could do.

He said controlling inflation was the core role of the Reserve Bank and it had laid out its plans.

"That is the lifting of the OCR and they've given a track for that… that's the tool they use," he said.

"From the point of view of the government, our job as much as anything, is to try to limit the impact on people whilst also looking at the drivers of inflation.

"We can combine those two things together by, for example, the extension we made to the fuel excise duty cut, the half-price public transport, because that makes sure we're reducing the impact on people but also has actually kept inflation a bit lower."

Robertson said it was necessary to "get to the source" and went over the government's changes to the rules around supermarkets which were designed to bring down prices and the work that was being done to promote electric vehicles which would lessen reliance on volatile commodities like oil.

But however the government may explain its actions, it's stuck with the problem and its popularity is being affected.

Victoria University's professor of comparative politics Jack Vowles, quoted by RNZ, said there was a high correlation between rising inflation and declining support for the government in the polls.

"There's an old adage that oppositions don't win elections, governments lose them," he said.

"So an opposition party, if an incumbent government is facing enough difficult problems, has got a pretty easy row to hoe if a lot of things are going wrong.

"It's basically a bad time to be in power, anywhere."

National and ACT have got their hoes out and they're digging away at the government's support.

ACT has a plan, a radical one, which it announced on Thursday.

Seymour said tariffs should be eliminated for all clothing, food and equipment imports, which would cost the government $195 million a year.

ACT would also remove labour market, wage and employer transfer requirements for applicants seeking a visa under the Accredited Employer Work Visa scheme and allow foreign supermarkets to bypass the Overseas Investment Act.

The announcement also wrapped in previously signalled policies including tax cuts, replacing the RMA, ending the government's fair pay agreements, income insurance and extra public holiday brought in with Matariki, the return of 90-day trials and requiring the Reserve Bank to focus solely on inflation, removing considerations of unemployment and housing from its remit.

"We're proposing genuine solutions, with enough political courage we can turn the tide and make life better for New Zealanders," Seymour said.

He'll have to work hard to convince voters of that.

National has been a steady critic of government spending, saying it is "fuelling the fire" of inflation. Economists have said it plays a small part.

Willis and party leader Christopher Luxon consistently link inflation with what they call Labour's "addiction to spending".

They'll have to lay out their own detailed plan for reducing spending when the rubber hits the road during the election campaign, assuming inflation is still a problem then and it probably will be.

They'll have to persuade voters they will be better off under a tighter budget, which could be difficult.

A cartoon published by Stuff on Wednesday picked up on that. It showed Luxon waving an axe at a bunch of people worried about the latest inflation figure. "Wait! Wait! Don't panic! I'll save you with my austerity axe," he's saying.

With Parliament still in recess and not much else happening a photograph of Prime Minister Jacinda Ardern and 120 members of the Youth Parliament was given wide coverage.

The problem: Neither the prime minister nor nearly 120 youth MPs were wearing masks. Also maskless were Governor-General Dame Cindy Kiro, Deputy Speaker Adrian Rurawhe, Minister for Youth Priyanca Radhakrishnan and National's youth spokesman Matt Doocey.

It was posted on Ardern's Facebook page and drew immediate criticism.

Former prime minister Helen Clark said it was shocking. "What on earth are they thinking. New Zealand is in the middle of a pandemic surge."

Winston Peters tweeted about "hypocrisy" and Seymour said Ardern had asked the public to follow her rules "at great cost" throughout the pandemic. "The least she could do is follow Parliament's rules herself."

The media noted that last Friday the government ramped up its mask-wearing message and Director-General of Health Dr Ashley Bloomfield had said it should be like wearing a seatbelt.

Epidemiologist Professor Michael Baker said he was "quite shocked" and an opportunity to promote mask-wearing had been missed.

A spokesperson for Ardern said she and others in the photo had been wearing masks but briefly removed them at the request of the photographer.

Would anyone speak up for the prime minister? Yes - [https://www.rnz.co.nz/news/political/471277/national-party-conference-to-go-ahead-in-person-despite-rising-covid-cases Nicola Willi. "Look, she just took off her mask for the photo and can we give her a break?" she said on Newshub's AM Show.

"I'm sure that just like me and all the others in the photo she put the mask on to walk around Parliament. We all need to be a bit more relaxed about that."

Political junkies will be fascinated by revelations in a book published this week, written by journalist Andrea Vance and titled Blue Blood.

It's the behind-the-scenes story of National's dreadful time in opposition after Bill English stepped down as party leader.

"The details in Vance's book, from each stage of decline, are equally gory and fascinating," said Stuff columnist Ben Thomas.

"The squandered vainglorious talents of Simon Bridges, the utter vapidity of the blink-and-miss-it Muller era, the house of horrors under Collins."

Thomas said the book reveals that staffers got in on the act as well as the politicians. "Bridges' team accuse a trio of 'ratf…..rs' in the parliamentary staff of leaks and white-anting the leader."

Excerpts of the book have been published, including the sorry tale behind Todd Muller's breakdown and the in-fighting that went on around him.

It was all much, much worse than it seemed at the time.

*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.