Leadership Problems.

Contenders: The next question after “Will Luxon really go?” is, of course, “Will that work?” The answer to that question lies not so much in the efficacy of Luxon’s successor as it does in the perceived strength of the Centre-Left alternative.

AT LEAST TWO prominent political commentators are alluding publicly to the imminence of a leadership spill in the National Party. Matthew Hooton and Duncan Garner have both written recently about the National Party’s growing dissatisfaction with Prime Minister Christopher Luxon’s performance. This sort of commentary would be much easier for conservatives to dismiss were it coming from the usual left-wing suspects, but neither Hooton nor Garner fall into that category. If the Centre (let alone the Right) cannot hold, then things are most certainly falling apart.

The next question after “Will Luxon really go?” is, of course, “Will that work?” The answer to that question lies not so much in the efficacy of Luxon’s successor as it does in the perceived strength of the Centre-Left alternative.

Chris Hipkins is pulling out all the stops to convince New Zealanders that Labour can indeed assemble a more effective and efficient coalition government than the fractious assemblage currently running the country. He used the occasion of his (rather belated) State of the Nation address to the Auckland Chamber of Commerce on Friday (7/3/25) to reassure the business community that his party is committed to comporting itself in a thoroughly non-threatening fashion.

As proof of these moderate intentions, Hipkins later announced a reshuffled, ‘all the talents’, shadow-cabinet – presumably committed to rolling out equally non-threatening policies. It is many years since horses crowded the nation’s streets, but even if they were still there, we may be certain that Labour has nothing planned that would frighten them even a little.

Does that mean that Labour has abandoned all thought of raising taxes, or, even worse, imposing that perennial horse-frightener – a Capital Gains Tax (CGT)? Not at all. It simply means that, in marked contrast to earlier Labour leaders, Hipkins intends to make the case for Labour’s revenue-enhancing policies well before the formal campaign launches in September/October 2026.

In this regard, Labour will be able to draw on the widespread global support for CGTs. New Zealand remains an outlier among the members of the OECD for the disinclination of its political leadership – Left as well as Right – to introduce a comprehensive tax on capital gains. Beset by the same demographic pressures as the rest of the developed world, the New Zealand state remains unusually reliant on income and sales taxes to pay for its core services. As the cost of these services, health in particular, continues to grow, the ability of the state to pay for them, without increasing its revenue, must be called into question.

Finance Minister Nicola Willis’s willingness to meet her government’s core obligations by incurring more and more debt will, as her Treasury advisers were quick to point out, very rapidly become economically unsustainable. But diluting those obligations, by reducing or privatising core public services will, even more rapidly, become politically unsustainable.

The present government’s economic and political difficulties are attributable almost entirely to its unfathomable decision to slash billions off the state’s income by cutting taxes when virtually every part of the state apparatus was crying out for more, and just about every responsible economist was arguing against it. Attempting to resolve the inevitable (and self-imposed) fiscal crisis by cutting state expenditure, has only compounded the Coalition’s difficulties.

On its face the Coalition’s behaviour seems self-defeating, which is why left-leaning commentator Rob Campbell’s latest contribution to The Post is so intriguing. In brief, Campbell sees a great deal more method than madness in the Coalition’s behaviour.

Stripping away its pious posturings and well-worn excuses, the former trade union leader reveals what he considers to be five key shifts at the heart of the Coalition’s policies:

• From public to private investment and delivery.
• From an emergent bi-cultural, back to a colonial nation.
• From universal to user charges.
• From regulated to market-use of resources.
• From limits on, to incentives for, private investment returns.

The temptation for Hipkins and his colleagues to pledge themselves to rolling-back the Coalition’s right-wing policy transitions will be strong. If they succumb, it would require an incoming centre-left government to reprioritise:

• Public provision over private enterprise.
• Tino rangatiratanga over colonial institutions.
• Universal provision over user pays.
• Rational regulation over laissez-faire.
• The public good over private interest.

This isn’t quite the pitch Hipkins made to the Auckland Chamber of Commerce. His purpose there was to play up the continuities embedded in National and Labour policy – especially with regard to the restoration of New Zealand’s decrepit infrastructure. Picking up on the growing disquiet at the Coalition’s apparent obsession with tearing down everything Labour had built, Hipkins was also careful to reassure his audience that while Labour might amend the policies of its predecessor, it does not share its affinity for the wrecking-ball.

The name for this approach is the “small-target strategy”. The idea being that the less one’s opponents have to aim at, the less they can hit. Sir Keir Starmer’s emphatic 2024 victory over the British Conservatives represented a huge vindication of the strategy, which might also be described as relying upon your opponent’s failures, rather than your own party’s policies, to carry you into office. Or, as Napoleon expressed the same idea: “Never interrupt your enemy when he’s making a mistake.” Bold and detailed policies are a dangerous distraction.

In the context of MMP, however, one’s own party’s commendable policy discipline can easily be compromised by the wild policy incontinence of one’s putative coalition partners. A strong and measured argument in favour of introducing a CGT on the part of Labour could all-too-easily be undermined by the Greens trumpeting a swingeing Wealth Tax on the non-tax-paying rich. And even that degree of fiscal radicalism might be overwhelmed by Te Pāti Māori demanding that full compensation for the crimes of colonisation be paid to tangata whenua.

Small wonder, then, that Hipkins is asking all those New Zealanders anxious to be rid of the National-Act-NZ First Coalition to play it safe by making sure that Labour receives by far the largest share of the anti-government Party Vote. Keeping the parliamentary representation of Labour’s potential coalition partners as small as possible will also limit dramatically their ability to demand excessive and/or outlandish policy concessions.

A Green Party heading into the election with 15 percent of the vote is much more likely to make trouble for Labour than a Green Party hovering just above the 5 percent threshold. A Te Pāti Māori facing stiff competition from Labour in all the Māori seats, and registering insufficient voter support to crest the MMP threshold, will find it harder to justify the angry performative politics at which it excels.

The chances of Labour winning back all those voters who deserted it for the Right in 2023 would, of course, be seriously enhanced if Hipkins felt confident enough in his position to execute what might be called a “Newsom Turn”.

Gavin Newsom, the Democratic Governor of California, last week turned his face against his party’s uncompromising support for transgenderism. By coming out against biological males participating in sports formerly restricted to biological females, Newsom signalled that he would run for President in 2028 on a “non-woke” policy platform. His decision is the strongest signal yet that the Democratic National Committee’s hold on the party’s ideological direction is faltering.

A similar signal from Hipkins, indicating that Labour’s infatuation with Identity Politics was also waning, would hasten the return of the tens-of-thousands of supporters alienated by Labour’s 2020-23 policies. The true test of Hipkins’ leadership, however, would be whether or not he could prevent tens-of-thousands of outraged “progressives” responding to his “Newsom Turn” by deserting Labour for the Greens and Te Pāti Māori.

Clearly, Christopher Luxon is not the only politician with leadership problems.

This essay was originally posted on the Interest.co.nz website on Monday, 10 March 2025.

The Politics of Ostracism.

Ruled Out: The AfD, (Alternative für Deutschland) branded “Far Right” by Germany’s political mainstream, has been ostracised politically. The Christian Democrats (many of whose voters support the AfD’s tough anti-immigration stance) have ruled out any possibility of entering into a coalition with the radical-nationalist party.

THAT THERE HAS BEEN A SHIFT towards the political right across virtually the entire world is now indisputable. The latest demonstration of right-wing strength came earlier this week (23/2/25) in Germany where the Christian Democratic Union/Christian Social Union (CDU/CSU) alliance and the even more emphatically conservative Alternative für Deutschland (AfD) together accounted for just under half of the popular vote.

The corollary of right-wing strength is, of course, left-wing weakness. In Germany the traditional left-wing standard-bearer, the Social Democratic Party, slumped to its lowest share ever of the post-war popular vote. The Greens also lost ground. Only the relatively minor Left Party registered solid gains.

On its face, the German result would indicate the swift formation of a strong right-wing coalition government. The German electorate has, after all, delivered the right-wing parties a commanding majority in the German parliament. That such a coalition will not, as matters presently stand, eventuate, requires some explanation.

Predictably, that explanation derives from the twelve years that Germany spent under Nazi rule. The crimes committed against the German people and, ultimately, the entire world by Adolf Hitler and his followers presented the victors of the Second World War with a dilemma: How to establish a political system sufficiently robust to allow the Germans to rule themselves without embracing the same radical-nationalist ideas that gave birth to Nazism?

In the Russian Zone of occupied Germany “denazification” was accomplished by constructing another totalitarian state, the German Democratic Republic, in which a single political organisation, the Socialist Unity Party (superintended by the Communist Party of the Soviet Union) controlled everything.

The American, British and French occupiers of the defeated Reich, already engaged in bitter ideological competition with the Soviets, could not be seen to embrace the totalitarian solutions of the Communists. Their brand-spanking-new Federal Republic of Germany could only be a democracy – with all the dangerous freedom that entails.

“Dangerous freedom”?

Of course “dangerous freedom”. Because, if freedom is to be anything other than a sham, it must encompass the possibility of its own rejection. People are not genuinely free unless they are also entrusted with the power to surrender their freedom. Liberty cannot be enforced.

The American, British and French occupiers disagreed. The constitution of their new republic was shaped in such a way that any political party unwilling to conform to its unwavering intolerance of anti-democratic ideas would be shunned by all the pro-democratic parties. If this political ostracism failed, and the voters, against all reason, continued to vote for an anti-democratic party in large numbers, then the all-powerful “Office for the Protection of the Constitution” could ban it altogether.

For good measure, all speech supportive of Hitler’s Nazi regime; the public display of Nazi symbols and memorabilia, and the use of Nazi greetings and slogans, was outlawed.

Following the collapse of the German Democratic Republic in 1989, and the re-unification of Germany in 1990, the exclusion of the anti-democratic Right was extended to the anti-democratic Left. On the grounds that a number of its founders had been members of the Socialist Unity Party, the centrist Social Democrats and their Green Party allies point-blank refused to enter into a coalition with the Left Party.

The AfD, branded “Far Right” by Germany’s political mainstream, suffered a similar fate. The CDU and its Bavarian sister party, the CSU (many of whose members support the AfD’s tough anti-immigration stance) have ruled out any possibility of entering into a coalition with the radical-nationalists.

For the long-suffering Germans this means enduring yet another “Grand Coalition” of the Christian Democrats and the Social Democrats. (In New Zealand terms, National and Labour.) But these two ideological formations are traceable historically to very different socio-economic classes and cultural/religious divisions in German society. Politically-speaking, it is extremely difficult to effect a durable combination of chalk and cheese.

Nor is it a durable solution to the steady expansion of radical-nationalist populism in Germany, or, for that matter, across the globe. Once a political movement achieves sufficient momentum to double its popular support from 10 to 20 percent of the electorate, excluding it from political office becomes completely counterproductive. What meagre support for democratic principles that still exists within its ranks will disappear altogether.

The treatment of the AfD will thus prove the truth of German philosopher Friedrich Nietzsche’s famous maxim: “What doesn’t kill me makes me stronger.”

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 28 February 2025.

What Are We Defending?

Following Our Example: Not even the presence of Chinese warships in the Tasman Sea will generate the sort of diplomatic breach the anti-China lobby has been working so assiduously for a decade to provoke. Too many New Zealanders recall the occasions when a New Zealand frigate has tagged along behind the Aussies and Americans in their regular voyages across the South China Sea and through the Taiwan Strait. 

A SMALL FORCE, just three ships, but its impact in a week of geopolitical transformation was devastating. Chinese naval vessels had sailed past Sydney at a distance of just 150 nautical miles. A clearer message to Australia and New Zealand could not have been sent by the Chinese Government: The Pacific is no longer an American lake.

The question to be answered, now, is: How should New Zealand respond? It’s armed forces are in a state of deplorable disrepair. Enlisted men and women are poorly paid and their morale is said to be dangerously low. Recruitment to all three services is bad and getting worse. The Royal New Zealand Navy, the service now in the spotlight, would struggle to show the flag in the Tasman Sea. If it tried, the not unreasonable fear would be that the vessel it sent might not come back. After all, the HMNZS Manawanui didn’t.

Defence Minister Judith Collins acknowledges these difficulties and is pledged to address them. New Zealand’s defence spending, expressed as a percentage of its GDP, is set to double over the next five years.

Unfortunately, that’s not saying much. Currently, New Zealand spends less that 1 percent of GDP on its armed forces. So, even a doubling of that figure would still leave us shy of the 2 percent figure now accepted globally as the minimum spend for any nation wishing to be taken seriously – not only by its enemies, but also by its friends.

According to Stats NZ: “The size of the New Zealand economy was $NZ415 billion for the year ended June 2024.” Working from this figure, if this country’s defence spending was to be brought up to the new minimum of 2 percent, a sum of roughly $8 billion would need to be appropriated by the House of Representatives. That’s an additional $3 billion on top of the 2024-25 appropriation.

That’s a lot of dollars to spend of guns and ships and planes when your country’s public health service is falling to pieces before its citizens’ horrified eyes. To supply the New Zealand Defence Force with an additional $3 billion, Finance Minister Nicola Willis would either have to embark on a blistering austerity programme reminiscent of Ruth Richardson’s 1991 “Mother of All Budgets”; or, the Coalition Government would have to raise taxes steeply. With an election looming in 2026, neither of those options is politically enticing.

Historically, securing general public support for a sharp increase in defence spending is almost impossible in the absence of a palpable – maybe even an existential – threat.

Following the successful conclusion of the Second World War, the administration of US President Harry S. Truman moved swiftly to restore American society to its pre-war settings. When the behaviour of the Soviet Union made it clear that the USA’s general demobilisation had been a tad premature, Truman rapidly concluded that to secure the appropriation of massive sums for the nation’s defence it would be necessary to, in the words of Senator Arthur Vandenberg: “scare the hell out of the American people”.

Fortunately for Truman, that proved to be less of a problem than many anticipated. Then, as now, the Russians made it easy!

Less so the Chinese – especially in New Zealand. The best efforts of Professor Anne-Marie Brady notwithstanding, casting the Peoples Republic in the role of Stalin’s Soviet Union has proved problematic. Most Kiwis are aware of the huge economic value of their country’s agricultural exports to China, and are, accordingly, in general support of the efforts of successive governments to avoid antagonising China to the point where the relationship between the two countries is jeopardised.

That being the case, not even the presence of Chinese warships in the Tasman is guaranteed to generate the sort of diplomatic breach the anti-China lobby has been working so assiduously for a decade to provoke. Too many New Zealanders recall the occasions when a New Zealand frigate has tagged along behind the Aussies and Americans in their regular voyages across the South China Sea and through the Taiwan Strait. If New Zealanders are entitled to sail where they please in international waters, then so too, presumably, are the Chinese.

What’s more, in light of the events of the past week, the Washington faction of MFAT faces a new and major problem. While the contrast between the United States and China remained stark, drawing attention to the totalitarian inclinations of its Communist Party rulers remained a reliable strategy. But, President Donald Trump’s affection for dictatorial regimes; the brutality of his transactional approach to international affairs; and his apparent repudiation of the “rules-based international order” in favour of cold-eyed realpolitik; makes it difficult for America (and its increasingly apprehensive allies) to retain their footing on the moral high-ground.

It is difficult to criticise the transactional elements of the relationships forged between China and the micro-states of the Pacific – the Cook Islands being only the latest in a succession of Chinese-initiated bilateral agreements negotiated in New Zealand’s “back yard” – when the United States is demanding half of Ukraine’s rare earths in part-payment for the American munitions supplied to counter Russian aggression.

What those three Chinese warships have produced, however, is a much more compelling argument for aligning New Zealand’s defensive posture in general and its military procurement in particular with Australia’s. In the much colder and more brutal world that is fast emerging from the collapse of the 80-year-old Pax Americana, only the Australians can be relied upon to protect us – and only then if they are satisfied that the Kiwis are pulling their weight.

What does that mean? It means finding that additional $3 billion and spending it. It means a much bigger and more effective navy. It means paying our soldiers, sailors, and air force personnel the sort of money that makes it easy for the NZDF to recruit and retain the best and the brightest young New Zealanders. It means a strategic military vision that makes sense to the NZDF, the politicians, and the overwhelming majority of New Zealanders. And, yes, it probably also means swallowing hard and signing up to AUKUS Pillar 2.

None of this will be of any use, however, in a nation divided against itself. A population composed of mutually antagonistic cultures and identities; a country racked by ideological differences and beset by conflicts made all the more intractable by the demonisation of every side except one’s own, cannot possibly achieve the consensus needed to construct an effective national defence.

If New Zealand is to defend itself, then the very first thing it needs to agree upon is the nature of the state it is defending. Is it a state committed to refashioning its ideas and institutions in conformity with the cultural imperatives of its indigenous people? Is it a state dedicated to maximising the ability of individuals to act effectively in the marketplaces of goods, services, and ideas? Is it a state dedicated to ensuring that every citizen has the support required to realise their full potential? Is it mixture of all three?

Until we can agree upon the shape and purpose of the state for which we are annually appropriating 2 percent (or more) of the nation’s economic output, then the long-overdue refurbishment and rehabilitation of our armed forces is unlikely to, and probably shouldn’t, happen.

Denied the easy option of marching behind British and American drums, and before they simply fall in step with the Australians, New Zealanders should sort-out why, and for what, they are willing to march at all.

This essay was originally posted on the Interest.co.nz website on Monday, 24 February 2025.