So how is the political landscape looking as the country inches slowly towards the goal of being 90% vaccinated against Covid-19?
The government which just 12 months ago was blissfully floating beyond electoral threat somewhere in the political stratosphere has come back to earth with something of a thud.
But National, still apparently without the capacity to strike the wavelength to reach the public as it did in its heyday, has yet to find its old mojo. By comparison, ACT has been flexing a new kind of muscularity, without suggesting it has yet the ability to land a killer punch
Meanwhile a group of top economists is warning that the seeds of the next economic crisis have been sown. The steps taken by countries, including New Zealand, to counter the economic impact of Covid-19 have masked and in some cases exacerbated the risks.
“The Covid-19 financial support package has kept Kiwis off of the dole queue and saved many businesses from bankruptcy,” report co-author Bryce Wilkinson said.
“However, the government should promptly repay those debts in order to be prepared for the next financial shock. Failing to prepare now for the next financial crisis could destroy New Zealanders’ nest eggs and threaten their livelihoods.”
Wilkinson said governments had been spending money they did not have to spend and central banks had been acting as “bottomless ATM machines”.
A common approach around the world has been for governments to roll out expensive support packages for households and businesses, borrow heavily, while central banks have loosened policy and printed money, driving interest rates lower and fuelling property and sharemarket prices and inflation.
However, the report said policy makers would have difficulties in unwinding the “extreme” measures, and there could be dire consequences such as higher unemployment, company crashes and the destruction of New Zealanders’ savings and livelihoods.
Former Reserve Bank chair Arthur Grimes wrote in the foreword to the report, published by the NZ Initiative, that
“… central bank actions through the pandemic … have placed NZ at greater risk of an asset price collapse with ensuing economic pain; the risk is heightened by the unsustainable fiscal and monetary policies globally.”
Grimes is urging the government to prepare for the next GFC by reducing debt, even though NZ is too small to prevent it.
Against that economic backdrop it should not be a surprise that political polling is showing support for the Ardern government has retreated and some political pundits are reporting that morale within the National camp is recovering.
The Roy Morgan poll this week showed Labour down at 39.5%, six points lower than in its previous poll in September. National was 26%, up three points, ACT was unchanged on 16%, and the Greens were at 13%.
Other polling is understood to show similar trends.
Labour’s slide coincides with an apparent rough passage for Prime Minister Jacinda Ardern as the government seeks to steer a course back to post-Covid normality. It seems some differing opinions are beginning to show up inside the Cabinet on just how this should be done. Moreover the government’s handling of the vaccination rollout is now being held up to critical scrutiny, just as the tardy return to normality has been.
Other issues like the Three Waters policy being driven through by Local Government Minister Nanaia Mahuita are stirring up vociferous opposition.
National’s failure to capitalise on the government’s latest Covid fumbling is being laid at the door of leader Judith Collins, who has been unable to sharpen the party’s attack any more than she can lift the spirits of the party’s foot soldiers. Not surprisingly, there has been increasing speculation her leadership could face renewed challenge, either from Simon Bridges or Christopher Luxon.
Matthew Hooton, never a fan of Collins, headed his political column in the NZ Herald this week “Now is Luxon’s time to step up”. Not a good omen, coming as it does from from Collins’ home base.
Meanwhile Labour goes into its annual conference this weekend with an agenda which means a major talking point will be a change in the rules on how the party elects its leader. That has led to speculation , which Point of Order understands to be groundless, that Ardern is seeking an exit next year.