If that’s Luxon’s Plan, What About Labour? 

Written By: - Date published: 1:05 pm, January 26th, 2025 - 56 comments
Categories: chris hipkins, Christopher Luxon, economy, politicans, tourism, uncategorized - Tags:

It’s time to highlight what a Labour plan for the New Zealand economy under a 2026 government would look like. And ask questions. 

On September 11 2023 then-Prime Minister Hipkins released his plan for the New Zealand economy

“Labour’s economic priorities for the next term are:
1. Grow an export-led economy with a strong global reputation
2. Turn New Zealand into a Centre of Excellence for sustainable agriculture and agricultural technology
3. Be a global leader in renewable energy
4. Harness New Zealand’s digital creativity and expertise, and
5. Boost our premium tourism offering”

These priorities will be underpinned by:
1. High paying jobs
2. Building infrastructure that lasts
3. Better skills and practical education for better jobs, and
4. A balanced fiscal plan

This was Labour’s plan in more detail here.

The questions need to be put: does that list distinguish them from National, and if so is it an improvement?

If Labour win and lead government, Hipkins will resume administration of a country with very low growth for years which had in fact gone backwards faster and further than any other country in the world in 2024, rising unemployment, and a stagnant housing market that in turn cripples local ability to raise debt to power small and medium businesses. Household savings have gone consistently backwards over the past 2 years. 

1.      Competing Deal Momentum

By 2026 many of the 149 Fast Track projects will be under construction. They will be boosting regional growth in a similar way to the Provincial Growth Fund from the Ardern administration. The list also bears some similarity to the “shovel ready” list generated by the Ardern government to kick-start the COVID-crippled economy – except Ardern didn’t thoroughly misuse Parliament by just legislating them into development.

Luxon’s list.

… and compare with the Ardern governments’ own completed ones.

The question underlying both major initiatives  – National and Labour – is what measurable difference they have made to the export economy, to our common wealth, or to our GDP by then. This would lead to reasonable claims about which version is actually good for New Zealand. 

By 2026 a PPP funding deal will be struck over SH1 Warkworth to Wellsford, Auckland’s City Rail Link funded first under National (started by Auckland Council) will open, and Key’s National Convention Centre will open. They will also have their failures, but with 100% public sector capital funding failing more and more, the ability to complete public-private deals to execution and delivery will be important in the politics of economic management. 

2.      Public Sector Investment Attraction 

We have two similar inward investment concepts.

A specific policy Leader Hipkins wanted was to inject $100 million into the Venture Capital Fund to invest in agritech businesses, including through their joint investment fund with Finistere Ventures developed through the Agritech ITP. 

Luxon’s Invest NZ will initially be introduced as part of New Zealand Trade and Enterprise (NZTE), with the intention to transition it into an autonomous Crown entity in future. The Government has appointed Trade Minister Todd McClay to oversee the new agency. Minister McClay said the initiative “will help unlock tens of billions of dollars in global investment opportunities”.

With very low local savings still, low public sector debt headroom, high company liquidation rates, and many mortgage holders underwater, New Zealand needs foreign money to get growing. 

So the question will be whether PM Luxon’s inward investment initiative delivers more deals and faster for New Zealand than Labour’s $100m public contribution to an existing public fund. 

3.      Energy Investment

As part of his 2023 announcement Hipkins stated that “New Zealand also has a huge opportunity to be a renewable energy powerhouse – using our position as near 100 percent renewable generator to sell our expertise and know-how to the world as countries seek to reach energy independence and build security against oil price shocks and global conflict.”

Labour’s two big announcements were to push on with the Lake Onslow Battery Dam project and to invest in ‘green’ hydrogen fuel generation. Unfortunately by 2026 it will be near-impossible to resurrect the Battery Dam project and ‘green’ hydrogen will be neither useful nor market-ready. I think we should be going for an HVDC link to Australia to form an Australasian electricity market, which in turn becomes part of a global electricity market. 

Luxon has already announced his policy moves to ease restrictions on electricity lines companies owning generation; ensure access for gentailers to backup hydro generation; improve electricity market regulation; and of course to enable offshore oil and gas exploration once more. 

It is particularly weird that Hipkins doesn’t mention what he would do about the 51% control of most of New Zealand’s energy production and retail, or any expansion to the role of Transpower, or how NZSuper’s offshore wind farm proposals might cooperate with the state, or indeed any change to the electricity market at all. 

If Luxon’s government is lucky and doesn’t face the same kind of electricity generation crisis that Ardern’s government faced, Luxon’s energy policies will be evaluated the winner. So far Luxon is lucky. 

Other areas

In the digital economy and in scientific expertise, the focus of Luxon and of Hipkins is frankly about the same, and they go in roughly the same direction but with Luxon having a bit more structural reform zeal. Labour needs much more to distinguish itself here. 

In tourism, New Zealand in 2026 will have well forgotten the COVID-era slump and recovery. Accelerated by tourism, Otago will continue to develop as the test bed for the fully international-capital-led development region more than any other, and the only one to show sustained economic growth. 

Labour wants higher-quality tourism offerings over volume, National clearly prefers higher volume. Can anyone remember the initial nationwide excitement generated by the Clark government’s 100% Pure campaign? Whether it was true or not was quite immaterial. Clark made New Zealand cool through tourism. 

In agriculture, National has gone down a rapid deregulation and low-cost labour route while Labour clearly prefers public investment in on-farm automation and higher environmental standards. It is curious that neither party has a clear policy when it comes to improving the wealth generated by the dairy industry. 

Now that Fonterra has finally shrunk to a size where it has righted itself, can’t Labour finally expect more from Fonterra as a state invention? Or is the agricultural lobby simply too powerful for Labour to ever take on? 

What does Labour have to offer our vital export economy other than the very, very marginal utility of more trade deals? By 2026 there’s a good chance that CPTPP will merge into BRICS as an actual live trade arrangement. And at that point either version of government will have to choose a trade side inside a live trade war.

Labour doesn’t yet have an economic plan for New Zealand that is sufficiently different from National. This should be a basic political task. 

Until it does, Labour will continue to cede the primary determinant of voter decision making: who runs the economy the best.  Because the answer whether justified or not is currently: National. 

56 comments on “If that’s Luxon’s Plan, What About Labour?  ”

  1. Dennis Frank 1

    Hard to disagree on this:

    Labour doesn’t yet have an economic plan for New Zealand that is sufficiently different from National. This should be a basic political task.

    Hipkins gets credit for producing that plan you analysed. That task you mention is likely to get Labour's attention next year since brand differentiation is necessary to win an election. Until then Labour will reassure our sheeple that it is same as National.

    How do we deal with Labour’s incrementalism? The MMP Cascade Strategy. It requires the Greens and the Māori Party to use the leverage they will have at the next election to negotiate the real change that Labour is too frightened to attempt. It means the Greens demanding their wealth tax if Labour won’t and it calls on the Māori Party to demand their tax policy with higher corporate taxes and higher taxes on the rich. https://thedailyblog.co.nz/2025/01/26/what-happens-if-incremental-labour-gutlessly-fails-nz-again-the-mmp-cascade-strategy/

    Bomber is advocating a leftist alternative to Labour's `copy National' tradition, which is realistic in proportion to the drift back across the line of centrists who don't like what the the current govt is doing. Yes, doing nothing could work for Labour.

    No evident leadership in that, though. Labour remain captivated by their neolib default. Anchoring in the status quo works for sheeple, but not for anyone serious about a better way ahead, and the latter group inevitably catalyses collective evolution. Opinion leaders.

    • Ad 1.1

      Hipkins has a plan as I pointed out, but as I also pointed out it's too similar to National's. It's also dating quickly.

      Hence the sentence reads: "Labour doesn’t yet have an economic plan for New Zealand that is sufficiently different from National."

  2. Patricia Bremner 2

    Read Mountain Tui. Ad.

  3. weka 3

    Interesting, and thanks for the analysis. The big thing that stands out for me is that none of that is grounded in climate crisis reality. I'm a fan of using moving in the right direction politically, but I don't think that is what is happening despite being less bad than National.

    We had such an opportunity with covid to shift from extractive tourism to something sustainable, and Labour and others just put the wrong people in charge of recovery. So depressing given there are people already in that sector who have the vision and understanding of the climate crisis, but we just don't empower them to lead.

    Likewise with agriculture. Instead of reaching out to the already established regenag sector, Labour are corralling 'sustainable' agriculture into the ghetto of breeding sheep to fart less. While genetics is a useful research focus, what is actually being done is rearranging the deck chairs on the Titanic. Again, depressing as, when we have other options that are more real about the climate and ecology crises and the solutions available to us. BAU greenwashing is what we're choosing instead, which is why we still have shitty rivers and cows drowing in mud.

    • Ad 3.1

      Indeed so many of the big post-COVID policies were simply dumped by PM Hipkins before the election in order to placate the electorate for votes.

      Top among them were a fully nationally and regionally organised fresh water allocation and management system. That would have been the dairy industry earthquake NZ needed.

      Then there was the major effort to get agriculture into emissions trading systems, That was simply betrayed by Federated Farmers, DCANZ and underneath that MAF staff waiting out National's re-gain of power.

      Also up there was the accelerated plan to shift to non-oil-combustion vehicles.

      They did make an effort to go for a more more sustainable approach to tourism, but resistance was strong in some areas and slow-walked in other parts of that sector.

  4. Patricia Bremner 4

    Well Ad, have you put forward any ideas of Policy yourself, or do you expect it to come from others? Demanding a plan before we have the Left agreeing on areas of co-operation seems cart before horse. Further, there has been tax put on the table for review, that is a big area of difference between National and Labour. Education ideas could not be more different, and as for treatment of people, but oh that does not satisfy those who want a shiny new vehicle going in their dream direction driven by Mr/Mrs Magic. Chucking stones is easy, building from wreckage is not, and it requires money time policy and people on the ground. Support rather than critics.

    • Ad 4.1

      You should surely be aware that Labour are right in the middle of forming all their key policies.

      They have deliberately been in "listening" and "reflecting" mode even beore they started debating new policy lines internally.

      I have made plenty of suggestions in the past, and for the sake of those who can't read repeated several of them in this post.

      You could of course get off your ass and write a simple single idea rather than as usual moaning about protecting the Party's feelings.

  5. Ed1 5

    A few simple ideas:

    1. We commonly hear of people leaving New Zealand for better money / jobs / opportunities in Australia – so how about we move a bit closer to them with income tax rates and capital gains tax and provision for retirement. Not all the way, but the same top tax rate may be reasonable, and drop our GST to a similar rate as theirs, but leave out their complications with exemptions. Yes tax capital gains on the same basis as Australia (no exemption for landlords), and stamp duty for house sales over a certain level.

    2, Get closer to Australian requirements for provision for retirement (Kiwisaver). Insist on Australian levels of employer contribution up to say double average wage, but allow lower levels for that part of incomes above that level. Stop the ability to cash out of Kiwisaver, but provide families with income lower than a certain level, with low interest State Advances type loans to help them buy a first home, with larger amounts available where there are dependant children.

    3. Make ambulances part of the public services with closer links to public hospitals while remaining part of wider emergency services.

    4. Promise legislation to re-purchase shares in specific privatisations at net sale price received government without interest and less any dividends paid within 6 months of a change of government.

    5. In similar vein, promise to reverse particularly egregious legislation with no or below normal compensation to those taking advantage of rules that are unfair to New Zealand.

    5. Provide consistent support for tertiary study across all accredited providers, with write-offs for selected occupations through a bond system for practice in New Zealand.

    6. Review rules for political donations to set a maximum donation to political parties from individuals, and ban donations from organisations or from non-NZ citizens – and to set tax rules for organisations like "political action groups" that ensure sufficient tax is paid to make it preferable to support political parties directly

    7. Require published political polls to meet specific standards for such polls and reporting of poll results at the expense of the polling organisation

    8. Have "immediate" legislation prepared for presentation to parliament as soon as possible after election with wording publicised as soon as possible to stop subsidies for vapes and revert to the previous system for phasing out all tobacco use.

    9. Link an increase in the top tax rate to an increase in minimum wage and social welfare benefits, to take effect as soon as possible after election.

    10. Ensure that the full costs of banking regulation are borne by specific levies on banks in addition to normal taxation.

  6. Res Publica 6

    This breakdown raises important questions, but it also highlights Labour’s glaring weaknesses: where’s the ambition? New Zealand can’t agriculturally export its way to a high-value economy, especially not in a world defined by climate risks, geopolitical instability, and the erosion of global free trade. Tourism? It’s not a sustainable, long-term foundation for economic growth either.

    Chippies "plan" (such as it is) feels like a rehash of past strategies that no longer fit the moment:

    1. No Plan for a Digitally-Driven Future:
      If Labour wants to be taken seriously, it needs a clear pathway to building a digitally-led, AI-savvy, high-productivity economy. Where’s the focus on developing the education and talent pipeline to prepare New Zealanders for this shift? Without investing in our workforce and fostering innovation, we’re locking ourselves into a low-value economy.
    2. Stagnant Thinking on Investment Capital:
      Our economic growth is stifled by property speculation, yet Labour’s plan offers no ideas to shift investment into productive industries. What about unlocking the billions tied up in KiwiSaver and keeping that capital in New Zealand, driving growth here rather than overseas? Bold policies like this could be transformational—but there’s no sign of fresh thinking.
    3. No Conversation About Fairness or Tax Reform:
      Labour cannot credibly discuss the economy without addressing fairness and tax reform. Rising inequality and the widening wealth gap aren’t just social issues; they’re economic ones. Where is the ambition to tackle this with meaningful tax policy? Without it, most New Zealanders won’t feel the benefits of any economic "growth."

      Abandoning the CGT back in 2023 looks stupider and shorter sighted by the day.

    4. No Real Distinction From National:
      This is Labour’s biggest failure. There’s nothing in this plan that meaningfully distinguishes them from National. For most workers, this isn’t a vision; it’s more of the same uninspired incrementalism. At a time when we need bold leadership, Labour is playing it safe—and losing the narrative in the process.

    Labour must stop being reactive and start articulating a vision for the future. New Zealand needs leadership willing to take risks, embrace innovation, and challenge the status quo. Without it, Labour cedes the most important question to National: who can run the economy better?

    And right now, for all their faults, National looks to the average voter like they have the edge: not because they’re better, but because Labour refuses to step up.

    If we want a productive, high-value economy we're going to have to be prepared to fight for it, invest in it, and put in the hard mahi to build it. Cautious incrementalism isn't going to cut it.

  7. Descendant Of Smith 7

    They have deliberately been in "listening" and "reflecting" mode even beore they started debating new policy lines internally.

    Fuck how many more times do we have to hear this bullshit.

    And yeah I'll quote myself yet again. Why is it not possible for Labour to have a cohorent policy that is public across electoral cycles? Something the public can get to know and get behind. This is the trouble when you don't believe in anything that isn't neo-liberal but you don't want to say that what you believe in is neo-liberalism – cause then you know you have to fess up you are just National-lite.

    Don't know whether I need to say much more than what I've been saying about Labour for years. Who the fuck knows what they stand for?

    Yeah I'm quoting myself below.

    "The labour politicians of the 1930's and 1940's could articulate a long term vision for things like having everyone housed, people living in dignity, freely educated, etc."

    "I've railed against this shit from Labour for years now – ever since their year of consultation followed by a year of strategy, don't release policy too early, keep your powder dry bullshit. They as I said back then need to work out what they stand for and build support over time. Maybe go back to looking at some of those old Labour polices and ask where do we stand on these today and tell people – stop focusing on the National Party narrative that you will get dragged into – benefit numbers, waiting lists, number of gang members etc.

    I go back to when Labour proudly had the 8 hour working day 40 hour working week highlighted on their website. I queried why this was there and did they still believe in it? A few weeks later it went off their website."

    https://thestandard.org.nz/that-was-not-as-good-as-was-hoped-for/#comment-1972801

    "Well there’s little evidence that Labour is pushing the needs of beneficiaries and workers. 2012 was the year of the manifesto. 2013 was supposed to be the year of the policy."

    http://thestandard.org.nz/amidst-thencircling-gloom/#comment-566641

    “Next year will be where the detail gets done.” Mike Smith

    Take note of this in that comment in 2012:

    “And no it’s not unrealistic to know this far out what they believe in and stand for – you build a brand and a connection with people over time – and that’s why I don’t particularly care who is leader.

    And here’s the other thing if I as a voter can’t figure out what they stand for is it any wonder those within seem disconnected and rudderless and disloyal.

    It seems to me they don’t know either – you can’t have a group of people consistently articulate a vision if the vision is a secret.”

    http://thestandard.org.nz/labour-shoots-themselves-in-the-foot-again/#comment-740795

    • Jenny 7.1

      '

      "you can’t have a group of people consistently articulate a vision if the vision is a secret.” Descendant Of Smith @7

      Why is it a secret?

      Politics is supposed to be about the battle of ideas. If you don't put your policies out there, how can you defend them, fight for them, debate them, win people over to them?

      I can remember occasion Labour saying that they couldn't release their policies to early before the election, because National might steal them!
      That is just so wrong on so many levels, that I find it hard to articulate them all.

      If these policies are so good, and they will make things better for our people, who cares who implements them?
      Why hold them back out of sectarian political admvanage?
      Isn't that what we are supposed to be in politics for, to make things better, not our partisan political self interest.

      • Res Publica 7.1.1

        The small target strategy has been a popular once for parties of both the left and right for the last couple of decades as it eliminates the risk of elections being dragged down by potentially unpopular policies. It's predicated on the assumption that oppositions don't win elections: incumbents lose them.

        As a true believer in realpolitik, I'd be happy for Labour to adopt this strategy if it worked. But the fact they keep sticking with it when the electorate is crying out for a bold, well-articulated alternative to yet more neoliberalism is beyond me.

        It smacks of the worst kind of smug, comfortably-middle-class, milquetoast socialism that is desperately out of touch to the day-to-day realities facing New Zealanders.

    • Champaign Socialist 7.2

      Because NZ is a democracy and political parties have to follow the whim and mood of the electorate in order gain power. If the electorate shifts right then political parties – especially those close to the center – are forced to adapt their policies and messaging.

      • Descendant Of Smith 7.2.1

        People aren't dumber than in the past. Tis the politicians who are fickle.

        The Greens have articulated quite well consistent policies and have picked up votes. Act the same consistency and picking up of votes (I might not like them but they are consistent as is Atlas's messaging across the world). National have been pretty consistent as well – albeit with incremental moves to the right into identity stuff but consistent on less taxes, less government for decades.

        Labour are the only ones who are really being wishy washy.

    • Ad 7.3

      Unfortunately in reality Labour don't have to do anything. National is running a very, very weak government with a weak PM.

      The only thing holding this lot from a perilous 5% poll drop is a decent crisis.

      From memory over the past 12 months they've done 3 joint media releases with Greens and Maori Party. This will get much harder as Maori Party gets more and more extreme in reaction to ACT.

      Labour will start solid policy 6 months out.

      • Res Publica 7.3.1

        Your points are well made, but there are significant risks to Labour simply waiting for the coalition to implode, especially if they adopt a small target strategy.

        While it's true that National is running a weak government with a PM who lacks commanding leadership, Labour can’t assume voters will automatically return to them—particularly if National avoids a major crisis.

        A low-turnout election driven by voter apathy or disillusionment could very well favor the right, as economic hardship often depresses participation among Labour’s core supporters, like younger and lower-income voters.

        The small target approach might seem safe, but it leaves Labour vulnerable to being defined by National and ACT, while failing to inspire its base or energize the broader electorate. If Labour generates a dull, low-enthusiasm campaign, left-leaning voters could stay home—especially if they feel Labour isn’t offering a compelling alternative.

        This risks handing the right another term, even if National is weak.

        Labour's best move isn’t just waiting until six months out to launch solid policy; they need to begin framing the narrative now. Building excitement and a sense of purpose early is essential, particularly in the face of ACT's increasing influence and the likelihood of heightened polarization. A proactive strategy—clearly articulating policies that tackle cost-of-living pressures, housing, and climate change—could galvanize Labour’s supporters and ensure the Māori Party and Greens feel aligned rather than drifting into fragmentation.

        Labour may not need to overpromise or take extreme positions, but they can’t afford to be boring, reactive, or assume National’s weakness will do the job for them. In this context, turnout and enthusiasm will be critical—and waiting too long to engage risks turning an opportunity into another missed election.

      • Christopher Randal 7.3.2

        And what if they don't have 6 months?

        Seymour takes over from Winston in May. What if he forces an implosion either then or soon after? Labour have nowt to present to the electorate in the 4 weeks from dissolution to election day!

        • James Simpson 7.3.2.1

          Seymour does take over from Winston in May.

          Now tell me what that means at a practical level? What extra power does Seymour gain and Peters lose at that point in time. Does Seymour get more votes at cabinet?

          I think the narrative that the transition will put the coalition at risk doesn't have much merit, because in practice nothing will change other than job titles.

      • adam 7.3.3

        This will get much harder as Maori Party gets more and more extreme in reaction to ACT.

        Got proof? Because https://www.facebook.com/MaoriParty/ is not exactly a bastion of extreme thinking. Crumbs they even got a quote from a former national MP on the site. Their web site is not extreme either – my guess your just regurgitating hard right talking points you like.

        I'm guessing like you have done on this site before – you bash Te Pāti Māori as a labour hack because that's all you got – bash the left, lose the election, and be the main left party standing. WORKS OUT SO WELL FOR THE REST OF US – this sickening behaviour which has been the norm for labour since MMP came to the fore.

        SO I'm very glad your not in charge of the party, as you lack the ability to work let alone be civil with other parties. The reality is Te Pāti Māori is holding a line with spine.

        I know right – shock and horror , a political party which has a spine – bugger me when will it end – Te Pāti Māori actually making others honour their word? Must be the stuff of nightmares for party hacks up and down the country. I'm guessing regular labour members must find it nice that a party can actually show a bit of grit and strength of conviction.

        The only extremists we have in this country are the far right. And lets face reality – they hate both of us. So get a grip on reality – stop spewing far right talking points and work with others.

  8. Jenny 8

    "I think we should be going for an HVDC link to Australia…." ADVANTAGE

    Are you serious?

    The shortest gap between Australia and New Zealand is approximately 1,500 kilometers, between the South Island of New Zealand and the Australian island of Tasmania.

    The gap between NZ and Tasmania is twice the distance of the world's current longest HVDC link, the Viking Interconnector between the UK and Denmark.

    The average depth of the Tasman sea is 3km deep, this is almost twice the depth and pressure of the world's deepest laid HVDC link, the Sapei Interconnector, currently the world's deepest subsea power cable,. The Sapei Interconnector, at 1.6km deep, connects the Mediterranean island of Sardinia to Italy..

    I estimate that energy losses over that distance would roughly be about 7.5MW, not counting the extra energy losses to get that power to mainland Australia,

    There is no cable laying ship in the world that could stow that much power cable, it would have to be built from scratch.

    The Tasman Sea is one of the most dangerous stretches of water in the world, with strong winds and large waves for most of the year, caused by the collision of currents from the Southern Ocean and the Pacific Ocean.

    Unlike many other bodies of water, the Tasman Sea experiences rough conditions for a significant portion of the year, with only a brief calmer period during summer months.

    Due to the clashing currents, the Tasman Sea can produce very large waves, sometimes reaching extreme heights.

    Strong westerly winds known to sailors as the 'Roaring 40s' for the loud noise they make blowing across ships. contribute to the rough conditions.

    I think it would be hard to find an insurer for such a venture, and the premiums would be prohibitive.

    An HVDC link to Australia, sounds like speculative fiction or an investment scam to me.

    Not saying that it is. But could we have some more detail please?

    Is it feasible?

    Is it affordable?

    It would be the longest and deepest HVDC link in the world

    Energy losses over that distance would be about 7.5MW

    There is no cable laying ship in the world that could stow that much power cable, it would have to be built from scratch.

    And did I mention rogue waves

    The Tasman Sea is known for its rogue waves. The middle of the Tasman Sea is a hotspot for rogue waves because of its strong tides and ridge along the sea floor.

    The tallest rogue wave recorded in the Tasman Sea was over 42.5 meters high, and was measured during the 1998 Sydney to Hobart Yacht race.

  9. Champaign Socialist 9

    In a democracy the economic direction is determined by voter perception and not facts or economic reality. Voter perception is malleable and fickle and this works against long term, strategic economic policies. In addition the understanding of how government deficits actually operate in the economy is non-existent as the household budget analogy continues to prevail even among educated and experienced economists. And this is probably the biggest handbrake on NZ finding serious long term solutions to it's economic challenges.

    This is one of the reasons China has experienced consistent positive economic growth for decades and most Western countries have not. They are able to make very long term decisions – such as the belt and rode initiative that looks 150 years ahead. (I’m not advocating ending democracy BTW just noting the different economic outcomes)

    And finally rising levels of government spending as a percentage of GDP is not the big catastrophe that it's made out to be. Historical data shows this has risen moderately for most modern economies since the end of WW2. It represents the rise in living standards for a broad swathe of the population and reducing it – as Willis and Reeves in the UK are trying to do – simply means a fall in the quality of life for the average citizen. Government spending, for the most part, is redistributionary – pensions, education, health, welfare, public infrastructure etc. In the real world this could be used to stabilize economic growth but that is not ideologically compatible with the household budget analogy of the economy. Which is the only analogy voters and politicians understand without struggle.

    • Champaign Socialist 9.1

      Lol. 'belt and road initiative' – 'belt and rode' sounds very inappropriate.

    • KJT 9.2

      The household analogy does work, but not how it is often quoted. If you consider a household where the parents issue credits (currency), within the household. Redeemable in such things as washing dishes, mowing lawns, help with homework etc.

      Family members can even loan credits to each other. Like Government spending, the limit is the amount of labour and resources available.
      Adding to Government/family spending motivates and utilises more work.

      This analogy also shows why borrowing for tax cuts is a foolish idea.

      And austerity is an even worse idea, as you end up with a shortage of necessary work being done.

    • Res Publica 9.3

      It's easy to plan an economy if you don't have to be accountable to voters that have to suffer in the short term, can simply sweep any policy failures under the rug (or ship them off to outer Mongolia), and sit at the top of a brutal, repressive police state that has almost total control over the flow of information in and out of the country.

      Oh, and when you have both the means and will to use force to egregiously violate the territories of other states and pillage their resources. And enough capital to keep your client states ahem partners quiescent while you extract everything you can.

      • Champaign Socialist 9.3.1

        There is definitely some historical truth to what you are saying and democracy has many benefits and advantages over other systems. As Churchill said "Democracy is a terrible form of government but it's better than all the others."
        You have a very dark picture of China and I would encourage you to look into what goes on in in the country now – how there government system works and what motivates it and what the quality of life is like for the people who live and work there day to day.

        • Res Publica 9.3.1.1

          I would encourage you to look into what goes on in in the country now – how there government system works and what motivates it and what the quality of life is like for the people who live and work there day to day.

          Other than being a (reasonably) fluent Mandarin speaker, studying Chinese history and culture at university, and doing a degree in political science, you mean?

          I understand that holding a polity as large and complex as China together from the center has historically required a certain degree of ruthlessness. The Mandate of Heaven, even one thoroughly backed up by Marxist-Leninist, Maoist, and Xi Jiping thought, is a slippery beast at best.

          And I'm not saying that the PRC hasn't bought an enormous increase in the standard of living for the average Chinese citizen (albeit from an incredibly low base compared to the West), and that their approach to long term economic planning is totally without merit.

          Or even that the government isn't broadly popular and legitimate. The Guomindang isn't coming back anytime soon.

          All I'm suggesting is that all that growth has come at a price that is all too often swept under the rug by apologists in the West: repression, censorship and flat-out ethnic cleansing at home. Dangerous military brinkmanship and the worst kind of economic exploitation abroad.

          Yes, for Mr and Mrs Chen on the street that's an acceptable trade-off given the century of humiliation China suffered between the first Opium War and the end of WWII. Who wouldn't want to live in the largest sustained economic boom in human history and see your country to go from a basket case to global superpower in a couple of generations?

          But I don't feel it's a model that New Zealand should seek to emulate.

          • Champaign Socialist 9.3.1.1.1

            Thanks Res Republica. I apologize for my assumption about your knowledge of China and I respect your opinion and the facts behind it. You sound very well placed to comment!

            • Res Publica 9.3.1.1.1.1

              Always happy to discuss modern Chinese political history and foreign policy.

              It's something of a hobby horse of mine.

              I think you also raised a valid point though. We always have to evaluate the policies and decision making of other countries and cultures on their own terms.

      • KJT 9.3.2

        A Chinese workmate who has lived and worked in the USA and China, said that,

        "In China you can change the policy but not the Government. In the USA the Government, but not the policies".

        Noting in China there is an "increasing proportion of middle class, in the USA there is an increasing proportion of poverty".

        • aj 9.3.2.1

          I wasn't quite sure which imperialist country this sentence was referring too . .

          when you have both the means and will to use force to egregiously violate the territories of other states and pillage their resources. And enough capital to keep your client states ahem partners quiescent while you extract everything you can.

  10. KJT 10

    Luxon's plan seems to be claiming to having lofty goals, but to do the opposite of anything that could achieve them.

    Of course this is just to fool the media and voters.

    The real plan, obvious from their efforts so far, is to fuck everything up to justify privatising it.

    National still likes to hide it and privatise and steal below the radar.

    Seymour is the stalking horse/puppet to see what they can get away with.

    Labour/Greens/TPM have much more integrity, but i've yet to see a coherent vision and plan for the future.

    One thing that old bastard Muldoon had, was a vision for and investment in New Zealands future. The last politician I can remember with it.

    Unfortunately it seems Labour are engaged in simply partially fixing the last National Government fuckups, before National gets in for another round of privatisation and destruction.

    • Antonina 10.1

      You are so right KJT Partially fixing the worst of Natz extremes is not enough. What about real Labour policies to reform our social deficiencies. Fancy ' crime' being quoted as one of 3 priorities.

  11. Champaign Socialist 11

    Interesting take KJT. You've reminded me to read Bill Mitchell's The Smith Family https://billmitchell.org/blog/?p=61255 I think that might be what he uses.
    But in general the household is understood to be constrained by a fixed income and has to control it's expenses. Also, apparently, only bad households take on any form of debt. Even that isn't true – most households take on scary amount of debt to improve their quality of life and future living standard – funnily enough. Not that different from governments as you point out.

    • KJT 11.1

      The point is that the internal economy within a family, if the family chooses to have a "means of exchange" within the family is not constrained by the outside economy. If they can't spend it outside the family then how much "money" they introduce is entirely constrained by how much each member is prepared to give for the unit of exchange.

      Not much different from a Government"printing money" to get the internal economy moving. They can print until the point "spare" capacity is utilised. Where it falls down is when the Government borrows externally, to get the money into the economy, to fund purely local production. That always comes with an added cost in foreign exchange/balance of trade. No external actor "prints money" for free. Japan's huge State debt hasn't been de-stabilising because, as economists have noted, so much is lent by "Japanese housewives".

  12. Incognito 12

    Labour’s plan must be to invest in ourselves and not to prostitute ourselves to uber-rich pricks from overseas. After all the strip-shows produced in Hollywood, with generous subsidies from NZ pimps, the overseas rich pricks decided that they wanted to grab NZ by the pussy property and own and dominate it. If Labour (and Green Party and TPM) wants to stop this then they must stop pandering to this OnlyFans crowd of supporters and apologist shills and burst the bubble of this neo-liberal/libertarian wet dream.

    • Patricia Bremner 12.1

      The Left joining together to achieve Aotearoa NZ sovereignty, and not being slaves to extractive processes both actual and political. !00%

      • Incognito 12.1.1

        Exactly! A government that governs in the interests of NZ and all New Zealanders rather than pandering to special interest groups, from overseas and domestic ones buoyed by overseas capital, that makes all of us except the ‘wealthy and sorted’ ruling class vulnerable to exploitation and our environment to extraction. Any party or parties that would pledge such commitment would be a real and attractive (and necessary!) alternative to the views and actions of the Coalition. Acting in the national interests, not just economic interests and certainly not first and foremost, of the many and prioritising the public good over the profits of private capital would set it apart from the neo-authoritarians running amok in the Beehive and wouldn’t necessarily need to take the shape of jingoist economic nationalism that we see elsewhere – NZ is a minnow, not a power-player (and we’re not punching above our weight).

  13. Champaign Socialist 13

    Economists are not known for pithy quotes but this one isn't bad – "Sitting in a car in a traffic jam burning fossil fuel is good for GDP but you're wasting your time while breathing in toxic fumes."

    The benefits, distribution and costs of growth matter.

  14. Champaign Socialist 14

    The other thing to consider and it is beginning become more evident is the reality of abundance. Profitability requires a level of scarcity and when this doesn't exist it has to be set by the market participants.

    What struck me about the energy crisis in NZ we had last year was that it was kind of deliberate and necessary to ensure that the price of energy never falls below a profitable price. It transpired – for example that some generators had sat on consents to expand generation supply for 10 years because of the risk to the price or that the opposition to the proposed battery hydro lake was that it created an over supply that would lower the price and deter investors.
    I guess this is exactly what OPEC does with oil production.
    But it kind of raises some questions about why we have and use energy. NZ currently generates 80% to 85% of it's electricity from renewable resources – why is it not more? It should be cheap and abundant given that most of the infrastructure cost came from the Muldoon government.
    Are certain existing market participants being protected? Possibly because of trade agreements and ISDS disputes?

    Here’s what happens when there is abundance – I think this represents a potential significant challenge to the current economic model:
    Energy oversupply in Spain causes price and project issues https://solarstoragextra.com/energy-oversupply-in-spain-causes-price-and-project-issues/

  15. Binders full of women 15

    There seems to be a Labour policy vacuum. It's all 'we hate what nat are doing' (usual opposition behaviour)– & 'we've been listening'. Pretty soon (before Easter?) something with more meat on the bone will be expected.

  16. Muttonbird 16

    They need to get out of the blocks and make the case for a CG/wealth/land/asset tax early, no use waiting till the eleventh hour, it makes it look like you're still scared.

    The bi-partisan support for this is ripe, and ready for harvest. Bank bosses and economists alike are wondering why this hasn't happened already. The political party of CGT opponents are at their lowest level since Bridges/Muller/Collins.

    Market it now and do it right. Drop the company tax rate if need be. The sugar to make the medicine go down.

    Most of the public is ready for this and to join the real world.

    The time is now.

    https://www.nzherald.co.nz/business/companies/more-kiwis-support-capital-gains-tax-than-oppose-in-new-poll/7WGICVGTR6DISJXD5ZTCDG2G5U/#google_vignette

    https://taxworkinggroup.govt.nz/sites/default/files/2019-02/twg-fact-why-tax-more-capital-gains.pdf

    • GeePee 16.1

      I agree Muttonbird. It’s way past time Labour has a well thought through CG/wealth tax. The time is indeed right for it.

      And the sooner they release their policies in this regard the better IMO.

      • Muttonbird 16.1.1

        Witless and Luxton have been allowed to softly introduce asset sales to take to the next election with very little fanfare, opposition of scrutiny. The chat is around QV (value $90m) and Landcorp which cashed up farm-lords both onshore and off would love to get their mitts on.

        Still, they've seeded out already and it's not particularly popular. CGT and or Wealth/Land Tax is at least more popular than it was and borrowing from student politician, David Seymour, IT IS INEVITABLE.

        If you have to compromise to get this very normal OECD policy over the line by shedding some low hanging fruit or temporarily dropping the company or top tax rate, so be it.

        Do something now, the window is closing for the electorate to consider this considered, rather than rushed.

        Even if the Nats copy it, at least Labour is driving policy.

        • GeePee 16.1.1.1

          Yep, or even look at some reduction in GST of some sort as part of a CGT/Wealth tax package.
          Last time I looked only four of 28 OECD nations did not have a CGT. Two of whom are Singapore and Switzerland.

          An massive key port and an international banking center have alternative sources of tax funding. NZ does not.
          The haggard anti-CGT excuses used by the usual suspects are way past their use by date.

  17. adam 17

    It's 2025 and still people are pushing liberal economics like it's the only game in town.

    I get in NZ politics they want no other discussion on economics. Or the fact economics has a word in front of it which makes it wirklichkeit.

    Political economy.

    Political economy.

    Political economy.

    Who would have thought it. That politics plays so much in how the economy works – not you Ad if you piece is anything to go by. Liberalism and it's no different from act in economics, less extreme sure, I'll give you that. But still more of the same shitty liberalism which the west has used to screw over working people for years.

    What about a democratic socialist economy? Or God forbid a discussion of direct worker control of the economy? The promotion of worker collectives? Community development banking? A green new deal?

    Or just to extreme for you Ad? Is it to much to create an economy where by working people are more than wage slaves, or welfare thralls?

    But then again, I'm an extremist who is stuck with some old fashioned ideas such as – fraternity, equality and liberty. Who also gets it's a set of ideas liberalism can't deliver on.

    • Patricia Bremner 17.1

      Thanks Adam liberalism can't deliver equality. Some think protecting the commons is so "woke" "partisan" or "emotional". and so Privitisation enters the conversation. Some of our worst flagellation comes from those who live in enclaves, and are blinded by their privilege who see collectives as akin to communism.. Too comfortable to face diminishing resources and opt for real change they are hostile to voices wanting community. Lip service and vindictive criticism their method of countering other points of view. Many of us support writers on the left as physically doing more is beyond our years. Too many who say they are on the left practice individualism. Thatcher's ideas.

  18. SPC 18

    All they have, is not being National.

    Their policy will be in pulling back from the moves to the right since 2023 (and mitigating the real cuts in pay to those in health and education and for those on MW).

    Fairer rules for tenants. More funding for public housing. And moving on with the FPA.

    And as usual doing more in R and D and future planning than National (who just want foreign investment ownership sell out – from which they seek to acquire CG).

    It will be enough for the sentient and aware middle class who want a sovereign New Zealand to go back to the earlier plan – NZF will tear itself apart. Part social conservative and part stooge of corporatism, it will be just an empty vessel (rump National of the 20thC era).

    • Ad 18.1

      Maybe their similarities mean the NZ problems are consistent.

      • SPC 18.1.1

        They are no longer similar, this coalition is moving on from where the 1990-1999 one left off. They are now full-blown neo-liberal extremist, using ACT as a trojan horse.

        Leaving NZFirst a shipwreck.

  19. Sanctuary 19

    The problem with incremental policies from the centre is they longer contain a why, as in "Why are we doing this? What is the outcome we want? What sort of scoiety do we want to build?" What is Labour's new economic idea for 2026? The liberal centre has no answer to these questions, because it's brain dead in the political ICU and being kept alive only by the frantic ministrations of it's doctors and nurse in elite academia and the legacy media.

    The thing that people don't grasp about the treaty principles bill is it is also sellable to the public as a new economic idea. Seymour is explicit on that linkage – the innovaters and wealth creators are being held back by the mediocrity of the majority. Blame someone else as the problem, but never actually fix the problem. Our wannabe oligarchs will ALWAYS back a race baiter like Seymour who they know won't put their taxes up, but they will never allow him to actually push the country in open civil war – that would be bad for business to.

    Labour lost the last election because of inflation the cost of living crisis. But both Labour and National are still wedded to a dying neoliberal economic idea that hasn't worked almost twenty years now, and gaslighting the public that more of the same will eventually see the economy come right – just create a better manufacturing policy, or build a new road, or whatever – simply isn't cutting through anymore. If you were to ask the average Joe what Labour or National's fresh economic idea is they wouldn't have a clue.

    Now I don't give a toss about the Nats, they can all get in the sea as far i am concerned. But Labour needs to re-brand or they'll end up like Starmer's UK Labour – presiding over systemic economic failure while defending a dying idea by moving further and further to the right where ACT will simply keep outflanking them and presenting ACT as the populist alternative with a different plan.

    Personally, if I were Chippy I'd ask one question about every new policy idea I was presented with. And the question would be the new, re-branded Labour parties "big idea". Simply, I would ask – does this policy reduce wealth inequality? Because let's be honest – the rich haven't had a cost of living crisis. The cost of living crisis has actually been a wealth inequality crisis.

    So I would say something like, Labour is committed to reducing wealth inequality in NZ as it's number one focus in government. Because….<insert reasons here>

    That allows you to argue for CGT or wealth tax.

    It allows you to say making the rich pay more is a good thing.

    It allows you to argue for supporting (by subsidies/tariffs if required) good paying jobs in export orientated manufacturing.

    it allows you to argue that a better organised workforce will extract a greater share of wealth from employers – hence, much more pro-union laws.

    Once we know what we stand for, and state in frequently, the rest should come easily.

  20. thinker 20

    Seymour becomes DPM soon, freeing Winston to be more of a politician and less a defender of the coalition.

    NZ1 isn't really competing with National but does go head to head against ACT, for votes.

    So, Luxon announces his plan for 2026 that makes ACT look like the favourite sibling, by aligning National to ACT over something that NZ1 is locked into opposing.

    Right when the coalition needs to present a united front against the developing coalition of the right, Luxons driven a wedge through it.

    I'd hate to be on Luxons dance card – his timing is awful…

  21. feijoa 21

    Labour should split in two.

    One mild pink party, don't rock the boat etc. Which could go with National (and therefore exclude ACT altogether from a coalition)

    Another red, solid working class socialist, tax the wealthy party. Which pink Labour could also go into coalition with.

    And let's see how the votes fall. It's MMP now.

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