Year in Politics: The year of three prime ministers and a swing to the right

Analysis - Three prime ministers and two radically different governments - 2023 saw changes that sent New Zealand into a new era of right-wing conservatism driven by the first three-party coalition.

Jacinda Ardern resigned as prime minister in January, setting off a year that was going to be like no other.

"For me, it's time. I just don't have enough in the tank for another four years," she said in her announcement that shocked the Labour Party and the country.

Was that really the reason, or part of the reason? Speculation was rife. Ardern's popularity, and the party's, had been slipping. She was considered by her critics to be divisive, accused of dreamy transformational rhetoric and out of touch with the daily problems Kiwis faced.

She had also suffered unprecedented online vilification, horrible and often misogynistic email threats which, although she didn't talk about it, must have had an impact.

Labour had to replace her, and fast. It did so with remarkably seamless efficiency, a masterclass in political management which was acknowledged even by opposition parties.

There were no damaging caucus contests. Ardern herself and Grant Robertson were reported to have been the main players behind the scenes as Chris Hipkins was applauded into office by Labour's MPs.

The "boy from the Hutt" quickly began his own transformation, acknowledging that the government had taken on too much with its grand schemes which Hipkins described as "unrealistic".

He scrapped or modified eight policies once considered by Labour to have been top priorities, vowing to focus on "bread and butter" issues.

After trailing National in the polls during the last months of 2022, Hipkins, against the odds, brought it back.

From late January through to March, Labour led National, although not by much. Hipkins was considerably more popular than National's Christopher Luxon and his modest background was often contrasted with Luxon's high-flying business career and considerable wealth.

Hipkins could have called a snap election, asking for a mandate to lead the country, he may have believed he could not only hold onto his lead but increase it.

Labour's resuscitation had almost certainly been helped by an intense and almost exclusive media focus following Ardern's resignation.

National's oxygen was sucked away by coverage that gave nearly everything to the government, its new leader and his new ideas.

That might not have been a bad thing, because National needed healing time and Luxon was quietly doing what he had done so well since becoming National's leader in November 2021 after just over 12 months as an MP.

He pulled together a caucus that had been riven by leadership debacles, the disastrous campaign fought by Judith Collins in the 2020 election and Ardern's success in returning to power with the first single party majority government in New Zealand's post-MMP history.

Luxon's success in burying National's immediate past and forging a cohesive, coherent caucus was no doubt helped by its MPs having learned lessons the hard way. Its 2020 election result - 25.6 percent of the party vote and just 33 MPs - was one of the worst in its history.

Its new leader was gaffe-prone, an obvious newbie compared with Hipkins who had been in Parliament since 2008.

But Luxon was a fast learner, and had figured out how he was going to win an election. He was going to make the most out of majority voter opinion that National was better at managing the economy than Labour.

While Hipkins was trying to whittle away at the cost of living crisis with measures such as lowering the cost of transport for young people and scrapping the $5 prescription charge, Luxon was hammering away at what he loudly claimed was its economic incompetence.

His mantra "Labour is addicted to spending" was repeated so many times it became tedious, but he was getting his message across.

Voters struggling with rising mortgage payments and often crippling cost of living increases heard him, again and again, say the government was fuelling inflation with its reckless spending.

People were fed up, they were just over it with the cost of everything going up all the time, and Labour's lead began to evaporate. From July, National was ahead, and it stayed there.

The government had also been under ferocious attack from National's deputy leader and shadow finance minister Nicola Willis, who was accusing it of secretly working on a wealth tax.

She broadened it into assaults claiming Labour was a "tax and spend" party with plans to tax nearly everything.

Labour had indeed been working on a wealth tax since Revenue Minister David Parker commissioned an IRD study, which showed the wealthiest families paid less than half the amount of tax compared with other New Zealanders.

A Treasury briefing paper reported to have been sent to Finance Minister Grant Robertson in March showed plans for a $10,000 tax-free threshold paid for by a 1.5 percent tax rate on net wealth above $5 million.

Parker and Robertson were working on a policy that Labour could campaign on, but Hipkins lost his nerve.

"Hipkins rules out capital gains tax, wealth tax, if Labour re-elected," RNZ reported on 12 July.

Hipkins made the announcement in a statement released while he was in Europe attending a NATO summit.

"I'm confirming today that under a government I lead there will be no wealth or capital gains tax after the election. End of story," Hipkins said.

With New Zealanders struggling with the cost of living, it was "simply not the time" for big changes to the tax system, he explained.

Hipkins' announcement was alongside the annual release of documents relating to the Budget, which confirmed a tax switch had been looked at.

Willis had been right. Robertson said work was undertaken on a range of proposals based on a revenue-neutral tax switch (the tax-free threshold paid for by the new wealth tax).

Hipkins' captain's call was well ahead of the official start of the campaign, but it marked a pivotal point.

"It's an idea that clearly I think had some merit," Robertson said. "I wouldn't have put so much work into it if I didn't think it had merit. But I am also a team player."

Parker was more than disappointed. He resigned the revenue portfolio.

"You know my views on those things," he told reporters. "I thought it was untenable for me to continue."

Parker gave up the portfolio in the least damaging way he could, waiting for a minor reshuffle.

"I've tried to do it in a way that makes it as smooth as possible for Chris Hipkins," he said.

"I'm a loyal member of the Labour Party, I don't want to cause disturbances, but I just thought it was untenable to continue."

Dumping the tax switch had robbed National of a powerful campaign weapon but there was a price to pay. Left-leaning Labour supporters were reported to be angry and disappointed, and began defecting to the Greens.

Labour's poll ratings slumped further while the Greens gained support which was to give the party a resounding election result.

Labour badly needed a circuit-breaker, a policy so big and attractive that it set the campaign agenda.

It didn't have one. Hipkins found small ways to help people cope with the cost of living, scrapping the $5 prescription charge, making transport cheaper for young people and promising extended free dental care but none of it made a difference.

It was hard to believe Labour could be in a bigger hole but there was more bad news to come. A perfect storm was brewing.

Hipkins' government had already lost three ministers during 2023.

Stuart Nash was sacked from all his portfolios in March for discussing confidential Cabinet decisions with donors. In May, Meka Whaitiri defected to Te Pāti Māori. In June, Michael Wood resigned over undeclared shareholdings.

They had all been big stories, but they were minor compared with this RNZ headline on 24 July: Justice Minister Kiri Allan resigns after being charged over car crash.

Allan was charged with reckless driving and resisting arrest. She has pleaded not guilty, these matters are before the court so the less said the better.

It surely doesn't get much worse than the justice minister being taken into custody, and National had been presented with an unprecedented windfall.

Luxon was rampant. Labour's wheels had fallen off, the government was a shambles, it had to end, just vote National and get the sorry saga over with.

There wasn't much that Hipkins, forced onto the defensive, could do about it. For a party leader going into an election, he was in a truly invidious position.

Luxon, on the other hand, had a relatively clean slate and, at the end of August, announced its flagship "back pocket boost" policy.

It included tax cuts, credits and rebates aiming to boost after-tax income, and was expected to cost $14.6 billion over four years, RNZ reported.

It would be paid for in a variety of ways which included public service cuts and an ill-fated and hugely controversial scheme to put a 15 percent foreign buyer tax on the purchase of houses worth more than $2 million.

Labour and numerous economists said the foreign buyer tax didn't stack up but Luxon and shadow finance minister Nicola Willis fought them all. In the end, it wasn't going to matter.

The announcement set the scene for National's campaign proper, which didn't really change through to election day.

Luxon kept it simple. He knew how badly households were hurting and he blamed the government, saying it had been irresponsibly reckless with money and it was fuelling the inflation that was causing the crippling cost of living increases.

National would fix that, bring spending under control, get the economy moving, and everyone would be better off.

Luxon trashed Labour's record, endlessly repeating statistics which showed that while spending had ballooned outcomes had worsened. He did have some hard evidence for that, particularly in health and education.

Then there was law and order. It was a powerful campaign weapon after a spate of ram raids and dairy burglaries.

The government had brought in security measures for small businesses in late 2022, paying for bollards to foil ram raiders and the installation of fog cannons.

But rollout had been painfully slow and dairy owners vented their anger, demanding stronger sentences for offenders.

National was saying what they wanted to hear - military-style boot camps.

All of these pledges and policies worked to the extent that National maintained its lead, but it was still some way off the 40 percent-plus figures that John Key achieved while he was prime minister.

It was never going to get there.

Luxon had to contend with a strong ACT Party, which was putting in a vigorous effort on its right flank. Critics often accused him of fighting the wrong enemy as he tried to head off ACT's right-wing policies.

And he had another problem - Winston Peters and New Zealand First.

Peters had been courting niche votes including the anti-vax conspiracy theorists he visited when they occupied Parliament's grounds, and it was paying off.

The party was creeping towards the 5 percent threshold which would get it back into Parliament after three years out of it, and Luxon was plagued by reporters asking whether he would work with Peters post-election.

For months he refused to answer, saying the questions were irrelevant, NZ First wasn't in Parliament and it hadn't reached 5 percent.

Then it did reach 5 percent and he couldn't stall any longer.

Luxon said he would if he had to, he really didn't want to, but if push came to shove he would pick up the phone and call Peters.

And that's what he had to do.

Voters had given National 48 seats, ACT 11 and NZ First eight.

National and ACT didn't have enough seats for a majority, NZ First had to join them.

Labour suffered one of its worst results, 34 seats, the Greens had 15 and Te Pāti Māori had made a huge gain with six.

Luxon broke with convention, deciding to hold coalition negotiations not in Parliament, where they had always taken place, but in Auckland at hotel and home venues.

They were long and difficult but he was able to announce on 24 November that he had formed a government.

It came at a price. He had to give up the foreign buyers tax at Peters' insistence and agree to a bill that would define the principles of the Treaty of Waitangi.

ACT had wanted a referendum on the principles, but Luxon wouldn't go that far, and the bill won't go further than being sent to a select committee.

He also had to agree to scrap Labour's smokefree legislation, which was still to come into effect, and reverse the names of government departments which were using te reo.

Te Pāti Māori vowed to fight National every way it could. The government's policies were "a manifesto of white supremacy and cultural genocide", said party co-leader Rawiri Waititi.

Māori activists vowed there would be marches and protests. Race relations were shaping up as the government's most contentious first-term problem.

Luxon unveiled a 100-day plan with 49 steps, which included repealing core legislation brought in by the previous government.

During Parliament's first working week, three bills were rammed through under urgency ending Fair Pay Agreements and the Clean Car Discount, and changing the Reserve Bank's mandate to the single issue of controlling inflation.

During its second and last week, 90-day trials were extended to all businesses, Labour's Resource Management Act reforms were repealed and the law requiring IRD to report annually on the equity of the tax system was axed.

Luxon had promised to "energise" New Zealand's relationships with other countries and he set a remarkable pace.

Before Christmas he had flown to Sydney to meet Australian Prime Minister Anthony Albanese, Trade Minister Todd McClay went to India to talk about a Free Trade Agreement, Foreign Minister Winston Peters visited Fiji, and Defence Minister Judith Collins was in New Caledonia at a regional security conference.

Luxon was "getting things done" as he had so often vowed he would, but the real work lay ahead.

National promised a great deal during the election campaign, Luxon was strong on "delivering outcomes".

In 2024, voters who put it and its partners into power will start expecting those deliveries.

*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.