JD
The latest unemployment and inflation figures sound the death knell for National’s coalition and for the country.
New Zealand’s electoral history suggests governments are most vulnerable when inflation and unemployment rise together. Inflation cuts real household incomes every week, while unemployment creates fear that today’s pressure may become tomorrow’s job loss.
When both occur simultaneously, voters usually punish the incumbent. Never mind that most of the immediate problems are due to Trump and the Iran war, or that things would be even worse under a Labour coalition – it’s the party in power that gets the blame. The elections of 1975, 1990, 2008 and 2023 provide clear warnings. In each case, deteriorating economic conditions helped remove or severely weaken the incumbent government.
The present coalition therefore faces an unfavourable historical pattern approaching November as voters conclude that ‘traditional’ economic management has failed.
Falling property values intensify that concern. Average New Zealand house values are now 15 per cent below their Covid-era peak, while parts of Wellington have fallen as much as 30 per cent.
Nationally, the decline represents an estimated $300–335 billion in lost residential property value, much of it borne by owner-occupiers.
Under these circumstances it is understandable that the electorate might adopt this totally fatalistic attitude:
‘The situation is worsening and the problems obviously aren’t being fixed. With that as a given and we’d probably end up with economic collapse under a Labour coalition, it’s happening anyway and, at least, whilst they’re following their usual plan of hyper-scale borrowing, taxing and spending, we’ll get the sugar hit of more handouts, and things might be better for a while.’
The benefits, welfare and public service classes will enjoy their short term largesse.
Anyone with an ounce of get-up-and-go will get up and leave. And the country will sink into internecine, interracial strife as we rapidly regress to Third World status.
With the figures reinforcing this feeling of failure, the only possible game-changer is a National Party leadership switch. A new leader to reset the campaign, distance the party from unpopular decisions and offer voters the impression of a fresh government without changing the coalition itself.
Such a move would be risky with leadership change this close to the election having only been successful once, the Little/Ardern switch in 2017, but it seems to be the only way to revive National’s electoral prospects and with it the prospects of the current coalition and the country as a whole.
There is no alternative, Luxon must go. Now.
