Republished with Permission
Bryce Edwards
Political Analyst in Residence, Director of the Democracy Project, Victoria University of Wellington.
After Labour’s vote plummeted from 50 per cent to just 26.9 per cent last year, it might have been expected that the party’s first conference in opposition would be more energetic and reforming. In working out a new way forward, the party organisation, activists, and MPs might have been expected to be focused on identifying what they got wrong and coming up with fresh new policies and positions to start turning things around for the next election.
The opposite occurred. Observers have painted a picture of a more lackadaisical party event, with the phrase ‘business as usual’ often uttered. And so, the main outcomes from the weekend were the defeat of a radical proposal to adopt a wealth tax, a continued focus on fighting the Treaty Principles Bill, and the embedding in of Chris Hipkins as the leader to take Labour into the 2026 election.
This lackadaisical ethos has also been Labour’s approach in opposition over the last year. Hipkins, especially, has been lackadaisical in his public leadership, yet he has energetically built support for his leadership amongst the wider Labour membership and with his caucus – the Māori caucus in particular.
The Labour conference kills off a wealth tax proposal
It’s been reported that Labour’s conference voted to continue developing both a capital gains tax and a wealth tax, leaving the party’s policy council and MPs to decide on which tax reforms to take to the 2026 election.
The two policies – a capital gains tax (CGT) and a wealth tax (WT) – are mainly rival versions of ways to reform the tax system to make the wealthy pay more tax. The WT option is the more radical and left-wing option, and the CGT is more moderate and acceptable to business and the political right.
Although, in theory, the WT is still alive as an option, in reality, the conference killed it. The left-wing faction of the party, led by former Revenue Minister David Parker, had been campaigning under the name “Win the Wealth Tax”. Parker’s former press secretary, Vernon Small, reported in the Sunday Star Times that the group put forward an amendment in the debate, which was closed off to the media, proposing that: “Labour back a wealth tax while investigating a CGT only as a ‘complementary measure’… But the amendment was defeated by about 55 to 45 per cent on the conference floor.”
Small reports that although both the CGT and the WT will continue to be considered, the latter is destined for defeat amongst Labour’s policy council and parliamentary caucus, both of which apparently lean strongly in favour of the more moderate tax reform. Small adds that “the weight of the 11 affiliated unions are thought to lean that way too”.
RNZ political editor Jo Moir also reports that the WT is effectively dead inside Labour after the weekend. She says that the more left-wing “anti-Hipkins brigade” lost all their fights relating to tax: “Remits to force the issue to be brought back to the party for sign-off, progressing just a wealth tax, and progressing a capital gains tax alone, all failed. As did a remit to make the leader, caucus and policy council consult before making any changes to policies in the party’s election-year manifesto.”
Moir suggests that these losses were a significant victory for Hipkins and the right-wing of the party. She says: “RNZ understands the wealth tax remit was vehemently voted down, and the group of members behind it was the same group given a resounding no by the rest of the party over the captain’s call remit.”
Veteran political journalist Richard Harman points out that Hipkins isn’t the only big player facing down the WT, saying that Finance Spokesperson Barbara Edmonds and CTU economist Craig Rennie (also a member of the party’s policy council) campaigned against it.
Harman also notes that the leadership invited businessman Sam Stubbs (of the KiwiSaver, Simplicity Funds) to discuss such issues. He told the party activists: “I’m a firm believer in capital gains tax (widespread applause) but not a wealth tax; it’s a great idea, but it doesn’t work… On a capital gains tax, you would be amazed how many business people want this to happen.”
Harman says that “Parker’s critics – and there are plenty of them at the top of the party organisation and in the parliamentary wing – described the defeat as ‘humiliating’” for him and the left of the party.
One of those in Parker’s camp is former party president Nigel Haworth. Harman reports that Haworth posted on Facebook that the conference decision to delay a decision on deciding between a CGT and WT will have a conservative impact, undermining tax reform: “Delay makes selling any new policy to voters more difficult… Unless the Labour Party shows real purpose, a drift into a catch-up Capital Gains Tax seems the most likely outcome… Delay and conservatism go hand-in-hand.”
Other economic moderation
Vested interests and those on the political right might be happy enough that Labour has ditched David Parker’s WT proposal. But there were other economic issues in which a more centrist or orthodox path was chosen at the weekend, especially regarding infrastructure and the future of KiwiBank.
Labour is apparently looking to utilize the private sector much more, in terms of the ownership and management of new infrastructure, in a similar way to the coalition government. Harman reported from the conference that Finance Spokesperson Barbara Edmonds “suggested there might be ways of bringing private capital into the Government, particularly for infrastructure and other capital projects.”
This is seen as making up for a decision to keep tax revenue low. And although Labour does not refer to it as “privatisation”, it’s another version of it under the orthodoxy of public-private-partnership (PPP). Businessman Sam Stubbs made a plea for such PPP arrangements under a future Labour government, saying, “Please, as a KiwiSaver manager who just wants to invest in the hood, give us stuff to invest in.”
BusinessDesk editor Pattrick Smellie reported that party members “seemed receptive to his pitch”. Edmunds also made it more palatable to Labour members by reconfiguring PPPs to include iwi businesses. The Herald’s Thomas Coughlan reports: “Edmonds was supportive of Stubbs’ idea of opening up infrastructure to outside partners. Edmonds would extend this to iwi, calling the proposal a partnership between public-private and iwi or PPI (pronounced pipi).”
Stubbs also pitched to Labour the idea of the partial privatisation of KiwiBank. BusinessDesk’s Smellie reported: “He also got a surprisingly enthusiastic reaction to the idea that KiwiBank should be recapitalised with private money ‘so they can take on the Aussie banks’.”
Labour’s focus on te Tiriti
The other big focus for the Labour Party conference was on the fight against the Treaty Principles Bill. There was generally a strong message from the party leadership that Labour would stay strong on Treaty issues, fighting for co-governance, and for the establishment of Māori wards. The decision to use the conference to celebrate former Cabinet Minister Nanaia Mahuta also sent a message that Labour wasn’t backing away from its Treaty and ethnicity approach that progressed so strongly in the 2020–23 term in government.
Hipkins himself was staunch on the fight against the Treaty Principles Bill, explaining to the conference that the public expected him to take a “strong stance” on the issue. He also brought in Willie Jackson, co-leader of Labour’s Māori caucus, to give one of the conference’s top slots, reiterating Labour’s determination to focus on te Tiriti and race relations.
Some commentators have expressed a surprise that Hipkins and Labour have taken this approach. After all, Treaty-related issues lost Labour a lot of its support when it plummeted to 26.9 per cent of the party vote last year. Wasn’t Labour promising to now focus on the issues that working class or “middle” New Zealanders were concerned about, especially during severe economic hardship?
The Herald’s Thomas Coughlan was one of the journalists suggesting the use of Jackson at the conference was “surprising”. Coughlan points to various opinion polls showing that “the Treaty Principles Bill is actually quite popular” and that policies like Māori wards and co-governance are not.
The simple explanation is that for Labour activists, this is still what is popular. As 1News’ Maiki Sherman explained at the conference, “Labour Party T-shirts were available for purchase with the words ‘Honour Te Tiriti’ across the front, while flyers encouraged individuals to make a submission in opposition to the [Treaty Principles] Bill.”
Chris Hipkins was clearly not going to tell his activists that they were wrong or that the last Labour Government was wrong on anything. That would’ve been internal suicide. Ever pragmatic, Hipkins has been steely focused on retaining his leadership position, which means keeping onside with everyone, but especially the highly influential Māori caucus and activists.
As Chris Trotter wrote yesterday on the Interest website, “Hipkins’ political survival [is] resting squarely on the shoulders of Jackson and his Māori Caucus”. Trotter explains that although it might have seemed odd to give Jackson the “co-starring role at this year’s Labour conference”, it was about shoring up Hipkins’ support in the party. This also explains, Trotter argues, “why Labour’s leadership has chosen te Tiriti as the hill upon which the party is ready to die – a second time”.
Hipkins has embedded himself as leader
Chris Hipkins is clearly much more embedded as Labour leader than ever before. In fact, there now seems to be much more chance of Hipkins being Leader of the Opposition than Luxon leading the government into the next election.
On this topic, Andrea Vance wrote in the Sunday Star Times: “No one should underestimate Chippy’s killer survival instincts. He’s lasted the year with no major internal ructions. He avoided becoming a target, largely by being invisible.” She suggests that, over the weekend, Hipkins was focused 100 per cent on winning over conference delegates. In contrast, unlike the usual tactics, there was no agenda to use the conference to win over the public or increase the party’s support.
In this way, Hipkins parallels the dreadful Benjamin Netanyahu, who seemed destined to lose his leadership a year ago. They are both great survivors. Not only have they endured in politics over the last year against all odds, but they have also become stronger.
In their entirely different ways, the two leaders have survived by tactically making decisions that strengthen their place amongst their narrow constituencies for short-term gain, even if these strategies have not been in the public interest, or even good for the political parties they represent. Of course, the two leaders are also victims of coalition dynamics – Netanyahu has to deal with extremists in his coalition, such as Ben-Gvir. Hipkins only has to navigate the likes of Jackson in Labour and Rawiri Waititi in his nascent coalition partner.
Of course, the two parallels are tragically different in their outcomes, yet they both show how pragmatism can lead to less-than-ideal outcomes, even if it leads to politicians having a stronger hold on power.
In the case of Hipkins and Labour, it means that he’s overseeing a party that could be doing much more to hold the government to account for its many shortcomings. It means that he’s forsaken using Labour’s major event of the year, in which they could’ve shown the public that they are learning from their past mistakes and finding a new and bold way forward.
Labour, like the US Democrats, has lost touch with the Zeitgeist
A number of commentators have expressed their disappointment or sense of exasperation with Labour after the weekend. BusinessDesk’s Pattrick Smellie, for instance, has written about how, although Hipkins says he acknowledges the need for Labour to learn from its major defeat last year, in practice, he appears to be promising more of the same. He suggests that, like the Democrats in the US, Labour is still not connecting with the poor and working class.
In fact, Smellie says that Labour is falling short of the global zeitgeist for boldness: “Unless NZ politics is very different from other Western democracies, reheating old Labour nostrums and promising to restore flagship policies from a previous term is likely well short of the party being ready for a shot at the Treasury benches in 2026.”
Others on the political left are saying similar things. For example, blogger Steven Cowan has been scathing about Hipkins’ failure to learn anything from Labour’s major defeat last year, with the mistaken belief that only tinkering is required and Labour will be back in power.
Like Smellie, Cowan says Labour is offering nothing for the disillusioned and very little for the working class, as it continues on “its centrist course” with “a few liberal lollipops tossed in the direction to its middle-class base”. He says this won’t cut it: “it won’t convince an angry, frustrated and disillusioned electorate that Labour is offering anything more than just ‘business as usual’. Again. If Labour is ‘the party of the working class’ as Hipkins often likes to claim, then he needs to put his working-class policies where his mouth is.”
This continued approach to incrementalism may reassure the base but risks failing to inspire a broader electorate. To regain relevance and credibility, Labour must move beyond its centrist comfort zone and embrace transformative policies that address New Zealand’s pressing challenges.
The 2024 Labour Party annual conference in Christchurch was a critical opportunity for the party to reflect on its 2023 electoral defeat and reposition itself as a viable alternative government for the 2026 elections. Instead, Labour and Hipkins continued with their very deliberate lackadaisical strategy.
Key Sources
Thomas Coughlan (Herald): Chris Hipkins tells Labour NZ needs it to change – can it? (paywalled)
Steven Cowan: Chris Hipkins: Waving, not drowning
Richard Harman: Inside Labour’s difficult tax politics (paywalled)
Jo Moir (RNZ): Labour lays groundwork for election-year capital gains tax
Otago Daily Times: Editorial – Don’t pop the bubbles just yet (paywalled)
Maiki Sherman (1News): Taxes and Treaty on the agenda at Labour conference
Vernon Small (Sunday Star Times): Can Labour win on tax when it has failed before? (paywalled)
Pattrick Smellie (BusinessDesk): Labour and the danger of talking to yourself (paywalled)
Chris Trotter (Interest): Handling Democracy
Andrea Vance (Sunday Star Times): ‘We aren’t feral’: Just how can Chippy soothe Labour losers? (paywalled)
This article was originally published on the author’s Substack.
