What if National had won in 2017?

A fun thought experiment in alternative political history - and why I think Bill English would have been Prime Minister until 2023.

Good morning and welcome to least news-pegged political newsletter of them all.

I was listening to Thomas Coughlan’s podcast on the budget the other day and he mentioned a classic press gallery drinks thought experiment: What if Winston Peters had gone with National in 2017? What if Bill English had not been the second ever National Party leader to lose two elections, but instead had a chance to lead the first four-term Government of the MMP era?

It’s certainly a fun scenario to think through, and not one that is particularly outlandish. National won more votes than any other party in 2017, and offered NZ First a potential two-party Government, with no need for another minor party like the Greens or ACT to get in the way. We now know, of course, that Peters was in the middle of suing several National Party figures over the leaking of his superannuation details at this point - but one has to take a few leaps to imagine any alternative history. So what might have happened?

What National would have given to Winston Peters

Getting back into Government would have required some kind of deal with NZ First. What might that have looked like?

Peters himself wrote about how he saw the coalition negotiations early in the term of the Labour-NZ First-Greens Government, saying he wanted to address “nine years of drift; Neglect of provincial and regional New Zealand; Homelessness in a land of plenty [and] a government willing to sell out to people who do not have the country’s best interests at heart.”

This is obviously a narrative crafted to explain the decision to go with Labour, made when he was still in coalition with the party, but we can extract some bits of policy focus. Indeed you can simply port over some bits of Labour’s 2017 agreement with with NZ First to National.

In general, NZ First would have looked to make it look like they had made National more centrist, particularly on populist economic policy. Here’s a look at what I believe the big things would have been.

• A win on housing, the main issue in the 2017 election, would be needed. A foreign buyers ban would be a big ask, but some restrictions would be possible. The state house build was already revving up a bit, and NZ First could definitely have won some kind of promise to build a certain number.

• Some kind of Provincial Growth Fund would have offended English, a former Treasury staffer and Budget hawk, but this aversion would not be insurmountable.

• Similarly, the “Waka Jumping” law goes against a National Party inclination to leave electoral law alone, but it wouldn’t be too big of a dead rat to swallow.

• An intention, never carried out, to bring down net migration.

• Peters would have got a promise to raise the minimum wage - probably by about as much as it would go up anyway, but maybe a little bit more.

• An offer for students - perhaps a version of fees free focused entirely on trades training.

• Some kind of offer on cheaper GP visits.

• More cops.

• NZ First would have got the racing portfolio, either open or secret control of fishery policy, and perhaps the foreign affairs portfolio.

But what else would have happened?

The Key-English Government, part four

National had the problem any fourth term Government has when promising new policies at an election. Anything truly creative and big is generally done in your first few terms. New policies at this point are either additive, require repudiating your own Government, or face the inevitable question of “well why haven’t you done that in the nine years you’ve had already?”

That doesn’t mean there wasn’t any new policies happening at this point. English was full bore into “social investment”, although it was still a bit unclear how this differed from “early intervention”. And National were ready to open the purse strings up a bit more as the Government books got into better shape following the GFC and Christchurch earthquake.

The biggest immediate shift would be that National’s tax cuts it had passed in 2017 would have gone into effect. This would have moved the lower two income tax thresholds up significantly, while also eliminating the Independent Earners Tax Credit, which National are right now quite ironically relying on to make their new tax cut package more progressive. Other tax cuts in 2018 or 2019 would definitely be possible.

Some of the other policies would be weaker versions of things Labour was pushing for and had largely won the argument on. For example: Labour wanted to increase paid parental leave to 26 weeks, National wanted to increase it to 22 weeks. Both parties were pushing for boosts to Working For Families, but Labour went for bigger ones.

In infrastructure the Roads of National Significance program would have continued apace, and PPPs would have been in far wider use. One imagines quite a few highways around the country would have an extra lane by now. National were also promising boosts to suburban rail.

In criminal justice the three strikes policy would not have been removed and police would have been given new powers to search people’s homes without warrants. It’s likely that the problem of Australians sending their technically Kiwi criminals here would have still been big, but National and NZ First’s response would have been “tougher”.

In health National were promising boosts to allow for more elective surgeries, but not funding on the level Labour was. Jonathan Coleman had created a range of interesting initiatives in mental health that could have been expanded into wider programmes.

In education the charter schools would have continued, and National was keen on introducing the ability for every primary school student to learn a second language - although its not clear this would have happened very quickly. National Standards would have survived.

Treaty issues would be interesting - in this scenario National would no longer be governing with the Māori Party, and NZ First might have pushed against the various bits of quiet co-governance already in train in 2017. Christopher Finlayson would still be Treaty Minister at this point, and would likely have steered a fairly similar course in terms of actual settlements.

Housing is a particularly interesting one. This issue was the thing hurting National the most at this point, and it had already started to rev up the social housing build programme. During the election it promised to double the First Home Buyer grant that it has now scrapped seven years later. And Nick Smith was in the midst of boosting funding for housing infrastructure.

As long-time readers will know, I’m strongly of the view that Labour’s biggest housing policy of all was the NPS-UD Phil Twyford introduced in 2020, which forced councils to zone for far more housing around transport links. It is not inconceivable to see someone in National introducing a similar change - after all it built on the experience of the 2016 Auckland Unitary Plan, and National MPs who were just becoming quite important at this time such as Chris Bishop certainly would have backed it. Then again, National had nine years to sort out planning reform and never managed it, and revolt from its homeowner base caused it to renege on its deal with Labour to allow for more townhouses - so perhaps not.

National also had a policy of getting debt to 15 per cent of GDP by 2025. It’s very doubtful that would have happened, because of what my next section will cover.

How crisis would have shaped the 2017-2020 term

I’ve largely focused on election policies from 2017 in the section above, which is a bit unfair because over three years National would have come up with all sorts of new policy I can’t fully envision, given those three years didn’t happen.

But another big reason is that this was a term riven by crises.

A few months before the election the disease Mycoplasma Bovis was detected in New Zealand cattle. Just months after it was confirmed to have spread to four separate farms. The Government undertook an expensive but eventually successful effort to entirely eradicate the disease. There is no reason to think that National would not have done the same thing and taken the same $1b fiscal hit.

The March 15 terror attacks a year and a half later shook the country and compelled the country into immediate legislative and diplomatic action. Given the loopholes used by the killer to purchase weapons and the inevitable public outcry, I believe National would have undertaken some kind of legislative crackdown on guns had it been in power, although it likely wouldn’t have gone quite as far as Labour did, or been quite as rapid. It’s hard to see English helming anything like the Christchurch Call or gaining the huge international recognition Jacinda Ardern did after the attacks, but as an extremely experienced politician he would not have handled the situation badly.

Which brings us to the crisis to end all crises: Covid-19.

No one knows exactly what National would have done in power when Covid arrived, but I think we can get a pretty good idea by looking across the ditch. Australia was ruled by a centre-right party of similar instincts and undertook largely similar policies to New Zealand, including lockdowns, managed quarantine of arrivals, and massive fiscal stimulus.

Indeed, these were all things that the National opposition called for in New Zealand, so it seems likely they would have occurred in some form under English. There would be differences around the edges. I think National would have pushed a similarly incredibly expensive wage subsidy but not a lot of the other ‘jobs for nature’ style stimulus spending. MIQ would have been a rolling political nightmare whoever was in charge, and National would have faced many similar questions about who was let in and who wasn’t - although I think it might have started to lift controls a bit earlier, and perhaps would have allowed more employer-sponsored MIQ places for foreign workers. Lockdowns would have been a little lighter and perhaps lifted a bit earlier, as National MPs are generally more receptive to business concerns than Labour ones.

But big picture I think English, Joyce, and Coleman would have enacted a largely successful strategy that, given our geographic and societal advantages, could well have led to the same golden period of Covid freedom we enjoyed in 2020 under Labour. And for that reason I think the party would have won the 2020 election.

Wait, really?

Yes.

2020 was a good year to be an incumbent. Many of those in power received some kind of polling bump as citizens got used to seeing Government ministers every single day announce new ways they were either keeping them safe or paying them money. The centre-right governments in the UK and Australia were both polling north of or around 50% in the middle of 2020. Their real issue was they didn’t have an election at this point to capitalise on this surge.

But New Zealand did, and I believe National would have won¹.

Labour in Opposition for the fourth term running would have been…interesting. Ardern would likely have stayed on after the election, but I’m not really sure how powerful she would be as a opposition leader, as opposed to a prime minister. Perhaps she could have stayed above the fray and let the rest of the front bench go extremely hard against National, perhaps she would have muddied herself in the attack. Perhaps she would have just quit once she became pregnant - given she was a fairly reluctant leader of the Labour Party in the first place this is far from impossible. It’s very hard to know!

I do think Labour would have found many ways to successful attack a fourth term National Government governing with NZ First. The party might even have led some polls in 2018 and 2019, which would have seemed like a revelation after a decade behind. 2017-intake MPs like Kiri Allan would have shined particularly bright.

But that wouldn’t stop the Government getting a huge boost in 2020 during the pandemic - and exploiting it. In such uncertain times, wouldn’t voters prefer the “strong and stable” extremely experienced Bill English to the Labour rabble, who at this point hadn’t governed since the long ago days of 2008?

It goes without saying that had National won in 2020 it is almost certain it would lose in 2023.

Much as 2020 was great for incumbents, 2023 was terrible. Voters all over the world have blamed their Governments for inflation and high interest rates and punished them accordingly. Add in the natural forces of gravity against a party in power five terms and it would have been curtains.

But who would be leading Labour? Would Ardern have really stuck out two election losses? Would Grant Robertson be sitting in the ninth floor right now, or Chris Hipkins, or some other new super-star MP who had come in at 2020?

The possibilities are endless, once you change one little bit about the past. Which is why these are so fun! Thanks for sticking with this and thanks for reading.

Reading recommendations

• Andrea Vance’s blockbuster scoop on serious allegations about census forms being used to help TPM.

• Tova O’Brien’s scoop on trouble within the ACT Party.

• Thomas Coughlan on the Budget.

• Me in Stuff on Joe Biden’s war on cheap Chinese EVs. At a certain point you have to ask - is the US more interested in saving the planet from catastrophic climate change or stopping China be as powerful as them?

• Me in Stuff on the UK election.

• Speaking of the UK election, there’s really too much good reading to recommend in one go. If you’re a freak like me, just get amongst. Sam Freedman on Substack is a good place to start.

1. A fun mini thought experiment to add on here - how would it have won? I think ACT would have had a very good 2020 arguing that National/NZ First were spending too much and controlling your freedom too much. A National/ACT Government would definitely be on the cards - perhaps alongside TOP?