CONOR ENGLISH
DIRECTOR
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Bachelor of Commerce in Economics from Otago University.
CONOR ENGLISH
DIRECTOR
-
Bachelor of Commerce in Economics from Otago University.
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Election 2023
What Do the Polls Tell Us?
Silvereye's key takeaways from recent polls and what they could tell us about New Zealand's 2023 General Election.
20th April 2023
All change
When British Prime Minister Harold Macmillan was asked what the greatest challenge for a statesperson was, he opined: 'Events, dear boy, events'. Another British Prime Minister, Harold Wilson, contributed ‘a week is a long time in politics’. Both maxims have come to the fore in 2023.
Labour is back but have we hit Peak Chippie?
With the resignation of Jacinda Ardern, and Grant Robertson sidelining himself, Chris Hipkins was the only logical choice for PM. His self-deprecation combined with his positioning and articulating as both Prime Minister, and Leader of the Opposition, at the same time, has seen an arrest of Labour’s decline in the polls. In his first few weeks in charge he has announced the ditching of policies that had been perceived as contributing to a decline in the polls.
Almost single-handedly, Hipkins has steered Labour off the electoral rocks it was heading to under Ardern, who had the self-awareness to jump. He’s arrested the decline and has Labour’s nose back in front of National’s.
But what does he do next?
Along came Gabrielle
Massive floods and a devastating cyclone propelled Labour and Hipkins into a wartime footing similar to Covid-19 and the Mosque Shootings, and before that National’s role in the aftermath of the Christchurch Earthquakes. Good command was rewarded in the polls, while National had to take a back seat, postponing planned policy announcements.
A silver lining of insurance payouts will help a sluggish economy, but this comes with an inflationary double edge. And any fiscal headroom for an electoral bonanza in the May budget may well be eaten up by significant public infrastructure repairs.
The ongoing cost-of-living crisis provides an additional challenge. It’s a catch 22 for the government. For example, the Emission Trading Scheme (ETS) is designed to send higher price signals to the public to encourage decarbonisation, but that increases the cost of living. So while government is adding about 20 cents per litre to the price of fuel through ETS to discourage consumption, it has reduced other taxes by about 25 cents per litre to put more money in voters’ pockets to try and address the cost of living crisis.
Monetary policy, which saw massive stimulation during the Covid period, is now swinging to a substantial tightening to try and get the inflationary cat back in the bag. This will see billions of dollars of mortgages coming off low fixed-interest rates. Infometrics in February highlighted that during 2023 some 55% of all fixed interest loans will come up for renewal. This will have significant cash implications on many households. Along with the Governments tougher Credit Contracts and Consumer Finance (CCFA), the cost and availability of credit for home buyers and businesses is constrained.
Many economists predict that recession will likely strike New Zealand. With cash margins squeezed by increasing inflation and falling demand induced by monetary policy, jobs will be lost as businesses try to stay afloat and try and cope with constrained and increasingly expensive working capital.
The deficit between what the country earns and what it spends has hit a record of $38.8 billion or 8.9% of GDP. This imbalance will likely impact negatively on the exchange rate, thus keeping pressure on tradeable inflation.
People who are hurting seldom vote for the status quo, which is perhaps the biggest threat Labour and Hipkins face come October.
Tale of the tape
As it stands, the centre-left would form the next government right now, but as the election is just over six months away that could very easily change.
Act continues to be rewarded for a disciplined and on-message performance in Parliament, and if it can keep this up, it bodes well for them on election day.
The Greens continue to bounce around in the polls, being as low as 5.7% and as high as 12.4%, but currently sitting midway at 8%. Its challenge is to balance the diverse aspirations of its membership.
If the Māori Party can hold Rawiri Waititi’s Waiariki seat and pick up more electorates – which will be a huge achievement – then its base will grow. Still, it is likely to remain in Opposition. It certainly won’t form a coalition government with National, but could negotiate juicy wins in any supply and confidence agreement with Labour.
All of which brings us to 2023’s proverbial wildcard: Winston Peters.
He’s been campaigning under the radar while packing out halls, including 400-plus recently in Howick. Oddly enough, he may just be National’s route to power. If we have indeed hit Peak Chippie and Labour starts to plateau, enough Labour voters might switch to New Zealand First, to be a “handbrake” on a National /Act government, giving Peters a similar role that he had in Jacinda Adern’s government after the 2017 election.
The big question is whether National can control itself and bury leadership speculation, allowing Luxon to focus on growing his current base with more policy announcements.
The data on “right track, wrong track shows a convergence of the tracks, and doesn’t yet reflect any changes made by the new Prime Minister. This sentiment will certainly impact how voters vote when they get into the booth and decide which boxes to tick
There’s around 180 days to Decision ’23.
Hold all bets. It’s going to be some ride!
