What will happen to Labour's legacy?

The Sixth Labour Government passed plenty of policy. How much of it will survive? Part one of a two-part series.

Sep 24, 2023

My apologies for the long time since I last wrote to you. The day job has been very busy, and the political news so thick and fast that by the time I sat down to write anything it always felt stale. This one will be in two parts as it is quite long.

Helen Clark managed to piss a lot of people off.

By 2008 her Government had alienated Māoridom with its Foreshore and Seabed Act, socially conservative Kiwis with its legalisation of prostitution and civil unions, socially liberal Kiwis with its refusal to touch abortion law reform, farmers with its ‘fart tax,’ Greenies with its GE stance, royalists with its replacement of the honours system, neo-cons with its refusal to invade Iraq, neo-libs with its vast expansion of the welfare system through Working For Families, and water enthusiasts of all stripes with its proposal to regulate showerheads.

And yet her successor left much of this policy architecture in place.

John Key, to the continuing despair of many on the right, refused to dismantle Labour’s biggest policy achievements, such as Working For Families, paid parental leave, four weeks of annual leave, KiwiSaver, interest-free student loans, the indexation of benefits, and KiwiBank.

Key did things to cut back on some of those big Labour policies, like removing the $1000 grant that welcomed people to KiwiSaver, but the overall structure of these policies survived and even thrived under nine years of National.

If Labour loses the election next month, its policy legacy faces a far more uncertain future.

And it does very much look like Labour is about to lose.

The magnitude of National’s likely win remains in serious doubt, with the easy path of a National-ACT coalition government clouded by the possibility of a confidence and supply agreement with NZ First. But the notion of that win is becoming harder to doubt.

I could be wrong! I’ve been very wrong before. But this would require either a systematic polling error of some proportion or a campaign turn-around that Labour don’t seem to have in them. This is the case not just in the horse race polls, but also in the issues surveys - IPSOS have the public believing National is the best party to tackle eight of the 10 top issues facing New Zealand, with Labour ahead on only one. National are ahead of Labour not just on its areas of strength like crime and the economy, but also on Labour’s turf of health and education.

Add to this the fact that National has recently had one of its worst weeks this year in terms of negative media coverage over its shaky tax cut costings yet has barely seen a blip in their ratings. The idea of Chris Hipkins celebrating Christmas in the ninth floor seems very distant.

So let’s get ahead of ourselves a bit and look back at what the Sixth Labour Government achieved and how likely these policies are to survive.

Welfare

Labour made a raft of changes to the welfare system, introducing new benefits, boosting others, and changing the way other benefits were actually administered.

I don’t have the space to pick apart every boost, but here are the headline changes:

The introduction of the Best Start payment for new parents, which is universal in the first year and then means-tested.
The introduction of the Winter Energy Payment for everyone on a main benefit, including superannuitants.
Increased paid parental leave.
The removal of many (but not all) benefit sanctions.
The indexation of working-age benefits to wage inflation instead of CPI. This brought these benefits into line with superannuation and meant they were guaranteed to raise at the same rate.
Increased benefits outside of that indexation in a bid to essentially erase the cuts from the 1990s.
A huge range of changes to abatement rates for Working For Families and other benefits.

So how likely are these to survive under a potential National-lead Government?

National have already made clear (although its not in the actual policy document) that it will go back to indexing working-age benefits to CPI instead of wage inflation. This is a subtle change but will mean the annual increases for every beneficiary aged under 65 - whether they be a jobseeker or disabled - will likely be smaller and their incomes will gradually fall further behind those who are working or over 65.

The party has also indicated benefit sanctions are on the way back, including “money management” where jobseekers aren’t actually given much cash but instead of bills paid for them, are on the cards.

It’s unclear what might happen to the more popular middle-class policies.

Paid parental leave is definitely not going to go anywhere given National have now made a lot of political hay trying to make it more flexible.

At 2020 National said it would means test Best Start but I can’t find that promise being repeated this year, or mentioned in ACT’s alternative budget. I have asked the National Party about this policy and not received a response.

The Winter Energy Payment is a bit more complex. National have said it will keep it in place; ACT are very keen to means test it

Legacy survivability rating: 3/10. Some of the big middle-class changes like paid-parental leave will survive and National won’t “undo” benefit boosts. But the indexation change will mean working-age benefits will fall behind incomes.

Social issues

New Zealand has had seven prime ministers under MMP, and all but two of them have been “social liberals” - with Jim Bolger and Bill English both professing catholic beliefs and generally voting against things like abortion legalisation.

The others - Jenny Shipley, Helen Clark, John Key, Jacinda Ardern, and Chris Hipkins - have all professed little to no religious belief and backed socially liberal causes to differing degrees.

There has naturally been a bit of chat about how a Christopher Luxon prime ministership could look like, given he is an evangelical pro-life Christian. But the nature of social policy in New Zealand makes it unlikely that much that Labour has achieved in this space will be rolled back. The incentives to leave the status quo in place here - especially given his top team is quite liberal themselves - will be far too strong.

To recap Labour’s big policy achievements in this space:

Decriminalised abortion.
Created safe zones around abortion clinics.
Changed the law so that trans people can change their genders on official documents more easily.
Banned conversion therapy.

National have made an iron-clad commitment to leave the abortion issue alone - one that makes absolute sense given their party itself has plenty of strong liberals on this issue. Indeed if they tried ACT would likely look to stop them.

Similarly, a majority of National MPs voted for the conversion therapy ban and for the gender change bill, which makes it very hard to imagine a future National Government looking to start another big fight over the issue.

Legacy survivability rating: 10/10. The law is settled.

Housing

Labour came into office in 2017 riding a wave of anger about the housing crisis. Its headline policy was a disaster and house prices and the housing waitlist have risen massively since. But there were some serious policy changes along the way.

Using the planning system to encourage density with the Medium Density Residential Standard or “MDRS”. This new standard forced councils to zone all residential land in major cities for medium density housing, creating a right for developers and property-owners to essentially bypass local opposition and build townhouses if they wanted to - up to three storeys high.
Putting out a direction under the (now-abolished) RMA so that councils had to zone for housing up to six storeys near major transit nodes, and could not stop developments for lacking car parks.
Banning foreign buyers from most residential property.
Extending the Bright-Line test to 10 years.
Introducing the Healthy Homes Standards for rentals.
Banned no-cause evictions from rentals and introduced a new default whereby fixed-term tenancies rolled into periodic tenancies.
Banning rental bidding.
Limiting rent rises to once a year.
Eliminating interest rate deductions for landlords.
Ending large-scale state home sales.
Building or buying 5600 state homes and and 7700 community housing homes, with thousands more planned.
Created the Ministry for Housing and Urban Development and changed Housing New Zealand into the wider Kainga Ora development agency.

This is a big list of policies for a potential National-led Government to unpack, but we know some things are for the scrap-heap.

National co-authored the MDRS and announced it alongside the Government in the Beehive, heralding a bipartisan consensus in favour of more dense housing that developers could rely on. But earlier this year facing strong pressure from ACT and angry homeowners who didn’t want their neighbours to build taller buildings, National went back on its word and said it would change the MDRS. As the whole point of these standards was predictability and stability for developers wary of the thousands of ways councils have to stop new housing getting built, this change essentially destroyed the policy, even from Opposition. I have written about this issue at length should you wish to read more.

National have indicated that it is comfortable with the direction put out under the RMA, known as the “NPS-UD”, so that planning law change seems safer.

The foreign buyers ban would be partially removed, with National allowing them to buy homes of $2m or more at the cost of a stamp duty.

We also have a clear commitment from National to move the Bright Line Test back to two years and reintroduce interest rate deduction for landlords.

On wider tenancy law some things are clear and some things are not.

National has committed to re-introducing no-cause evictions and stopping the automatic rolling over of fixed-term tenancies into periodic ones. It is less clear where it stands on the Healthy Homes Standards (which it opposed when they were introduced) or other changes like the ban on rental bidding. I have asked for some more clarity.

On state houses National have said they would match the current Government track (but not the more ambitious one recently announced by Labour).

Then of course there are coalition dynamics to take into account.

ACT favour scrapping the Bright Line Test completely, not taking it down to two years. NZ First might have quite different ideas on foreign buyers than the other two parties.

Legacy survivability rating: 4/10. Labour’s legislative pendulum swing in favour of tenants and allowing more housing to be built won’t be completely undone, and the state home build programme looks to be safe.

Education

Chris Hipkins was fairly busy in education before becoming prime minister, but a lot of the big promises from 2017 fell away. Here are the key changes Labour made.

Introduced fees-free university education for year one and fees-free trades training for years one and two.
Combined New Zealand’s 16 polytechs into one huge institution.
Attempted an ambitious reform of NCEA with some bits finished (it’s free now) and some bits a long way off.
Removed National Standards for primary education.
Looked to end “voluntary” school donations by paying schools who promised not to ask for them.
Made a range of changes to way early childhood education (ECE) teachers are paid in an attempt to bring them to parity with primary school teachers and entice ECE centres to hire more qualified teachers - although this work appears to have paused.
Took control of zoning away from schools and handed it to regional bodies.
Ended the National Government’s charter schools programme.
Replacing the decile system with the ‘equity index’.
Introduced 20 hours free ECE for two-year-olds - although this doesn’t actually start until next year.
Introduced free school lunches for schools in low-income areas.

Some of this appears safe under National.

Despite opposing it at introduction, National has said it will not remove the fees-free programme. ACT still want to scrap it.

National has indicated it wishes to unmerge the mega-polytech, re-introduce something like the National Standards programme with a standardised public assessment, and re-introduce charter schools.

On ECE, National will scrap the 20 hours of free ECE for two-year-olds before it gets going, replacing it with a tax credit. It is not clear what exactly would happen to the funding for qualified teachers and the like.

Luxon has indicated that National will keep the school lunch policy in some form.

I’ve asked what they make of the school donation policy and have no received a response.

When it was last in Government National was also interested in replacing the decile system so it seems unlikely that would shift.

National’s education spokeswoman Erica Stanford has criticised the NCEA reform programme but from what I can see not quite committed to completely cancelling it.

And on zoning, while I can’t find a specific policy Stanford was very critical of the move in Parliament saying school boards knew what was best for their schools.

Legacy survivability rating: 4/10. Changes are coming but the likely survival of fees-free is fairly sizeable win for the overall legacy, even if no Labour MPs are particularly keen to brag about the policy anymore.

Transport

Transport has been one of the Government’s weakest areas. It came into office talking a big talk about building light rail in Auckland - six years later there is no spades in the ground. In the same period China has built 17,000 km of high speed rail.

Outside of Auckland there are other delayed projects. Transmission Gully was completed outside of Wellington, but Let’s Get Wellington Moving faces serious hurdles. There has also been endless fights about various state highway funding streams.

But there has been some policy implemented alongside all these fights about marquee projects.

Introduced a ‘Road to Zero’ safety policy which prioritised investment on things like median barriers (although they continually miss targets for these) and on lowering speed limits in some areas.
Introduced the Auckland Regional Fuel Tax of 11.5c (GST-inclusive) a litre on petrol.
Introduced New Zealand’s first vehicle emissions standard, requiring importers to sell a mix of vehicles that reach an average tailpipe emissions measure or face fines. The idea here is that this standard can get cleaner over time and make sure manufacturers/importers are offering a greater range of low and no-emissions vehicles.
Introduced a ‘feebate’ whereby purchases of more heavily emitting vehicles pay a fee that is transferred (in theory) to a subsidy for a cleaner vehicle - whether that be an EV or just a more efficient car.

There are few areas where the divide between National and Labour is more clear than in transport.

National has promised to reverse the speed limit changes introduced by Labour’s Road to Zero policy. It is also cancelling Auckland Light Rail, the Auckland Regional Fuel Tax, and the ‘feebate’. However a recent u-turn has seen National decide to support the vehicle emissions standards.

Legacy survivability rating: 1/10. Not much.

Health

Health is a traditional strong spot for Labour, as it tends to fund it at a higher level than National.

It certainly benefited from this at the 2020 election, when a response to the biggest health crisis in a century was rewarded with the biggest Labour vote in almost that long.

But the fact that National are now more trusted on the issue suggests that some of its wider policy changes have not gone down as well. Here are the biggest shifts:

Abolishing the DHB system and replacing it with a national delivery entity: Te Whatu Ora, alongside Te Aka Whai Ora, commonly known as the Māori Health Authority.
Introduced a range of new mental health support services, including a “front-line” free counselling service and services at schools.
Extended free GP visits from those under six to those under 14.
Abolished the $5 co-pay for prescriptions.
Pursued a pseudo-decriminalisation of cannabis, allowing it for medicinal purposes and telling police to use their discretion before charging people for use.
Legalised pill-testing as festivals.

The big one is the DHBs. National’s health spokesman Shane Reti has pledged to abolish the Māori Health Authority - but he’s less clear on unpicking Te Whatu Ora. National were opposed to the centralisation in the first place of course, but can quite reasonably argue that the disruption required to unpick it would not be worth it.

The frontline mental health services aren’t likely to be scrapped by a party that has been demanding the Government do more on mental health, and scrapping the extended GP visits would look particularly miserly.

The $5 co-pay would be re-introduced as Luxon indicated after the Budget. Pill-testing at festivals is less clear - National opposed the policy but might not think the fight is worth it. I’ve asked for the party’s position on this change.

Legacy survivability rating: 7/10. Getting rid of the Māori Health Authority would take a significant chunk out of Labour’s policy legacy here. But if the DHBs remain centralised that will be a big achievement to look back on.

To be continued.

In the next few days I will cover off Justice, Climate, the environment, and the workplace in part two. See you then!

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