A change election, absolutely. A hope election? Not so much, writes Toby Manhire.

For all the subplots, and there were many, the biggest story of the 2023 election is the collapse of Labour. No matter the extenuating circumstances, and again there were many, to go from a historic high, above 50% in the 2020 election, to a result last night below 27%? A horror show. 

“When the tide comes in big it almost invariably goes out big as well,” said Chris Hipkins in an emotional address to supporters in the Hutt Valley. But while a fall from the heights of 2020, made anomalous by the Covid context and a dysfunctional opposition, was inevitable, one of this scale was not. 

Shortly after Hipkins was done, Christopher Luxon addressed an Auckland crowd that in size and energy recalled the John Key years. He said: “You have reached for hope and voted for change.” It was a strong speech, prime ministerial. But if people had reached for hope in the campaign just gone, they didn’t find much to cling to in either Chris on offer. With the exception of bursts of passion in the last week or two, their respective visions were about as profound and exhilarating as Luxon’s choice of campaign drink, a trim hot chocolate.

A hope election not so much, but a change election, yes. Absolutely. More than a month ago, Hipkins acknowledged as much. “I accept there is a mood for change,” he said. In what sounded a bit like an early concession speech, he went on to say, “I take responsibility” for the dismal polling being read to his face.

But what sort of change did people want? Not, it seemed to be agreed at least by the two big parties, a change in the form of progress, but a change back – as spelled out in the National slogan: “back on track”. Luxon could sell that, and he did so daily, with the exasperation of a parent asking their kids, yet again, if they’d remembered to pack their togs for swimming. Hipkins, meanwhile, faced an astronomic challenge to present himself – a senior minister across the Labour government – as an agent of change without falling apart in laughter. 

The cost of living imperative sucked the air out of everything. As recently as March 2020, Jacinda Ardern had been refusing to accept the “cost of living crisis” diagnosis. Soon after, however, it was accepted. Then, unavoidably, it was declared the central theme of the election to come. After Ardern’s surprise resignation in January, Hipkins sought immediately to meet the public mood with his own parsimonious, no-frills brand. A repudiation of the lofty ambitions and rhetoric of transformation that had been synonymous with his predecessor. In its place: bread and butter.

Hipkins can in many ways count himself the luckless man. He inherited a bloated workload, an economy buffeted by offshore winds, an electorate riddled with malaise and disgruntlement. A string of ministerial exits in a soup brewed before his time. Labour had a record to boast on child poverty and building public houses, but not a lot more. It was hard to run on delivery. 

Then there was Covid. It had created a concertina effect: as Hipkins himself said, the intensity of the pandemic and politicians’ over-familiarity through presence in living rooms in some ways made it feel like a third-term government; the Covid interruption meant that, in delivery terms, it was more like a one-term effort.

Worse still, the mood was such that no one wanted to hear that word. Covid. The response, certainly the first part of it, was the government’s greatest achievement. But it had become the most unwelcome, lingering guest imaginable. The particular punishment meted out to Labour in Auckland last night no doubt comes, whether consciously or not, from the practical and psychological impacts of the long, late lockdown in the region. As if it weren't cruel enough already, fortune decided to give the prime minister the virus as a leaving present.

Hipkins did have choices to make, however. The most important was in rejecting the petitions of his finance and revenue ministers to embark on a “tax switch”, an attempt to restructure the system by introducing a wealth tax at the same time as a tax-free income threshold. Hipkins said no. There would be no wealth tax, nor any new capital gains tax, as long as he was prime minister, he announced in a press release sent from a Nato summit in Lithuania.

What Hipkins instead proffered was a dusted-off, inefficient but at least superficially popular policy: the removal of GST from fresh fruit and veges. Whatever impact it might have had was extinguished by National deputy leader Nicola Willis, who revealed it was coming weeks in advance. When it was announced, it was greeted with a resounding thumbs down from economists, as the idea had been previously by Michael Cullen and Grant Robertson, who as Hipkins’ finance minister insisted, colourfully if unpersuasively, that he had experienced a “road to Damascus” moment on the issue.

Last night Hipkins made reference to Mike Moore and his belief in the responsibility of a parliamentarian as “the highest honour”. Moore’s prime ministership was shorter even than Hipkins’, lasting just a couple of months. His task back in 1990, famously, was to “save the furniture” of the Labour Party. Decisions such as Hipkins’ against the tax switch and in favour of the GST pledge always felt informed by something similar.

Whether it was designed to limit the scale of loss or not, Labour’s small-vision approach dovetailed with National’s small-target strategy to drive voters towards the smaller parties. The Greens and Act both prospered by thinking bigger. Later, Winston Peters rode his horse right into the major-party vacuum. Less than 66% of voters chose one of those big parties, the lowest combined total since 2002.

The change offered by Luxon revolved around a pledge to spend less, spend better, and to deliver a tax cut. Focused expressly on the "squeezed middle", it was neither inspirational nor as impactful as sometimes sold, nor, according to serious economists across the spectrum, plausibly funded. The social investment approach, a far-reaching idea Nicola Willis inherited from Bill English, was barely mentioned. 

The campaign only rarely lifted its gaze beyond the hand-to-mouth exigencies of the “cost of living election” to the environmental and geopolitical pyres burning abroad, nor even the urgent demands of climate adaptation at home. “It is increasingly clear that Cyclone Gabrielle will be a central character in the election of 2023,” I wrote in February, “barrelling big, uncomfortable, critical questions to the fore.” With the exception of some pockets of the country, I was wrong about that. 

So much of it instead was he-said-she-said, I-know-you-are-but-what-am-I? Wet, whiny and inward looking. Sound and fury signifying not very much at all.

National’s result was better than many polls had suggested. It may be that the 11th-hour efforts to scare voters home by warning of instability, an early election even, should NZ First hold the keys, paid off. At one point last night, National was sitting as giddy as 42%, at which point one MP told me it felt like “the inverse” of the experience in 2020; they were “stunned and shocked” again, “but this time in a positive sense.”

By the night’s end, however, there was a more tempered mood. At just under 39%, National has 50 seats, with Act’s 9% providing 11. That’s 61 seats in a parliament of 121 seats (Te Pāti Māori’s four electorates creates a one-seat overhang). Even with an extra National seat near certain from next month’s byelection in Port Waikato, the majority is slim, and there is a compelling case to make that call to Winston Peters to seek a quote for a little insurance.

Peters is the great survivor of New Zealand politics, and could have another rodeo in him yet. Whether Hipkins has the gas in the steed is less clear. In a campaign that few are likely to remember fondly, he often seemed to be playing leader of the opposition, and with Labour in a dire situation many will be hoping he’ll take it on properly. Luxon, meanwhile, has sometimes looked like the prime minister, and will very soon have a chance to prove that he’s up to the real thing.

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