The final hand is about to be dealt in the 2023 election, but it could still be some time before the players fully reveal their cards.
National, ACT and New Zealand First have been around the proverbial table working towards forming a new government. All signs are progress has been made finding common ground and creating a platform on which to strike formal deals, which will now pick up pace with special votes counted.
International events add another layer of pressure for a New Zealand prime minister to be present.
National Party leader Christopher Luxon says the timing would be too tight for him to attend next week’s Pacific Islands Forum, but he is hoping to travel to San Francisco in mid-November when the world’s most powerful leaders will come together for APEC.
Under the provisional result National and ACT have 61 seats in a 121-seat Parliament, but that could well change after the roughly half a million special votes have been tallied.
Regardless, it was pretty clear on election night they would need New Zealand First to some degree, either to provide a buffer if they end up with only a slim majority, or give them the numbers they need to get over the line. Having a third party in the mix also lessens National’s reliance on ACT and therefore the leverage the latter could have in a two-party scenario.
National is in the “last resort” scenario it warned about in the final weeks of the campaign, but Luxon says his party is looking forward to clarity so it “can move at great pace to put a government together”.
Christopher Luxon has stayed quiet on possible coalition arrangements. Photo: RNZ / Nick Monro
While refusing to discuss any specifics, he said all party leaders were “very, very focused” on moving as quickly as possible, recognising the “urgency” of the situation.
“We’ve been ahead of the curve, we’ve been trying to make sure that we can deal with issues and have conversations about things that we need to do”.
In the past the special votes have tended to favour the left and while that’s not a given in this election, it would be very optimistic to think the final result will deliver National and ACT enough support to have a large enough majority to go it alone.
That’s been reflected in the approach taken by Luxon, who’s been developing “relationships and arrangements” with both ACT and New Zealand First.
The talks and meetings have been held in Auckland and look likely to carry on that way. The leaders are based there, any key players can be brought up from the capital when needed and remote communications are an integral part of life in 2023.
From the politicians’ point of view it means being able to do it away from the questions and microphones of the press gallery; it gives them space to conduct their talks but also removes an element of transparency given the high degree of public interest.
There’s been a narrative from Luxon that past negotiations have not been conducted as professionally as they could have been, one reason for operating with such secrecy. However, even when done at Parliament, with more day-to-day contact between leaders and reporters – most recently in 2017 – while there were general comments made publicly, there were no breaches of confidentiality or anything that would derail the talks.
There are many areas where agreement could reached fairly quickly: the repeal of Three Waters, the Māori Health Authority and the Resource Management Act, restoring 90-day workplace trials, a smaller public service, and in portfolios like justice and education.
All three parties campaigned on reducing income tax so could, in principle, back National’s tax relief package, but both ACT and New Zealand First have raised red flags about its affordability and feasibility.
New Zealand First has also taken a strong position in the past against allowing house sales to overseas buyers (the partial repeal of the existing ban is a key revenue raiser for National) and raising the age of superannuation.
ACT is clear its policy for a referendum on the Treaty of Waitangi and the interpretation of its principles is at the top of its priority list. Luxon though has described it as “divisive”, so how would that fit with his promise of being as leader who “unites” New Zealand? Just one of the gnarly compromises they will have to work through.
National has a first 100 days plan but the only actions linked to the tax package are to instruct public service chief executives to report on current spending and start their cost-cutting exercises, money that will help fund the tax cuts. However, incoming ministers have bought themselves time as the tax changes aren’t due until July next year.
Chris Hipkins on election night. Photo: Getty Images / Hagen Hopkins
On the other side, Labour is grappling with the ignominy of losing the government benches. Part of the transition is having to pack up ministerial offices, tell legions of staffers they have lost their jobs and adjust to life in opposition.
Leader Chris Hipkins is walking the same path as National’s Bill English in 2017, taking over as leader and prime minister during the term and then leading their party to an election loss. Back then, National beat Labour in the party vote but the deal with New Zealand First meant it was ousted from government, in circumstances that made defeat even harder for the caucus to accept, and its recovery longer to achieve.
English would end up taking his leave in early 2018 when it became clear all was not well within his caucus, and there followed a string of damaging fights over the leadership.
Senior Labour MPs not only witnessed National’s upheaval, but experienced themselves what was at times a vicious and dysfunctional time in opposition, learning the lesson disunity is punished at the polls.
And here they are again, dealing no doubt with an internal tussle between high emotion and the institutional wisdom advising all to keep cool heads. There will be resentment and recriminations over the loss, and a great deal aimed at Hipkins as leader, but for now there appear to be no active moves against him.
Anyone who fancies themselves as his successor will be thinking about timing, and whether a move right now would be advantageous; the rest of the caucus will be weighing up the strengths Hipkins could bring to the role of opposition leader versus the merits of replacing him – firstly with whom, and second to what benefit?
The party will need to look back at what went wrong in the 2023 campaign and then decide how they rally, which will have to include difficult conversations about vexed policy positions like tax.
Of course Hipkins could yet decide to resign himself, step away from politics and open up the leadership.
The caucus has to hold a vote to endorse the leader within three months of the election, which could happen as early as next week.
Whatever that result, the question of the Labour Party leadership will remain very much in play for some time in the face of such a resounding defeat.
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