2026 Election: turbulent changes in the political landscape
Nicola Willis has two good years ahead though
After Matthew Hooton and Duncan Garner published why Christopher Luxon might not lead the National Party into the next election, Chris Trotter weighed in too. This piece has two purposes: first, I would like to respond to Trotter’s analysis and, second, I attempt to share the intuitive line of thought I mentioned in a message to the readers. The core of the line of thought is that when (not if) Luxon is removed, Nicola Willis is the most likely to follow.
Usually, I agree with Chris Trotter, and, more importantly, during the last election I would have voted the same way as him. I saw the problems with Labour’s policies, and I wanted New Zealand First to have a say in forming the coming government. Nevertheless, I could barely find points within Trotter's recent piece in the Interest I would agree. Let’s go through them!
Starting with the first major claim by Trotter, namely, the answer to the question of whether the replacement of Luxon might work for the National Party “lies not so much in the efficacy of Luxon’s successor as it does in the perceived strength of the Centre-Left alternative.” It is a diversion from Trotter’s former beliefs, namely, it is not the opposition that wins elections, it is governments who lose them. So, in this logic, it is only the Nats who can loose, and Labour has barely any latitude.
To justify his claims about the options of the centre-left party, Trotter mentions that Hipkins held a late “state of the nation address” on 7 March at the Auckland Chamber of Commerce, where he expressed that Labour is not planning anything too threatening. The possibly threatening element of Labour’s policy move would be the introduction of a comprehensive capital gains tax – according to Trotter. This justification is problematic because elections cannot be won by tax reform. Not to mention that introducing a capital gains tax can be barely regarded as tax reform. Tax reform is when a government methodically identifies the state’s responsibilities and fully redefines the necessary funding for those responsibilities. Although there is indeed global support for capital gains tax, in New Zealand there is another huge missing element in the taxation system: social security contributions, especially the ones that are paid by employers.
Trotter believes that the current economic problems are attributable to spending cuts only. The situation, however, is far more complex. Sluggish economic growth is typically attributable to a lack of innovation capacity. Although we hear a lot about AI, it is not something that would mobilise government spending to the extent that would provide employment for many people. The core problems of the slowing of the global economy lie elsewhere, mostly, in the lack of profitable investment options.
There are five areas where Trotter identifies room to establish political capital. Labour should prioritise:
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.
The first and the fifth points appear interlinked, they both require a larger role by the state. If managed properly, these may work, however, the problem is how to identify the practicalities of these priorities. Nevertheless, the principle of “public good over private interests” can be understood in layman's terms if it refers to blocking corruption and lobbying. Otherwise, it seems quite “empty.” Moreover, there is a huge problem regarding these principles: the public trust towards state services (both by central and local government) is very low. Practically, everyday people do not like the bureaucracy. They identify healthcare as one of the biggest concerns, however, promising something in healthcare delivery would raise questions about the funding of healthcare, in other words: tax hikes.
The rational regulation over laissez-faire again seems an easy sell if it is translated into simple messages: securing workplace safety or providing infrastructure that is weather-proof. The universal provision over user pays is again a simple sell (for example “free” road access), however, we again have to ask about the funding and the tax burden.
Beyond these five points, Trotter argues that Hipkins should make a “Newsom turn,” namely, he should distance himself and Labour from identity politics, following the steps of Gavin Newsom, the governor of California, who might become the presidential candidate in 2028 for the Democratic Party in the US. There are at least two problems with this option: it contradicts the principle of prioritising “Tino rangatiratanga over colonial institutions” because that is a strong reference to identity politics. Besides, this is the area where Hipkins’ behaviour shows how extremely tight his room is, not just in navigating the political landscape with Te Pāti Māori and the Greens, but also inside Labour. We should not forget that one of the main reasons for Labour’s catastrophic loss of the supporter base was identity politics, within which the promotion of Māori rights and culture was pivotal.
Although Hipkins admitted this mistake at Labour’s annual conference in Christchurch last November, he also prepared the stage for the political comeback of Nanaia Mahuta, the author of Labour’s most controversial policy, the Three Waters legislation. Hipkins said that the party was doing a lot of what the party believed was important, but they did not listen to the people about what was important to them. However, in the next minute, he invited applause for Nanaia Mahuta and gave the floor to her.
Hipkins’ impossible situation
The main point where we can agree with Trotter is that Hipkins should show stronger leadership than just performing the balancing act that has been characterising him recently. However, this is possibly the point where Hipkins faces the largest resistance both inside Labour and with the other left-wing parties. It is because every time he showed leadership qualities he was attacked by “his allies.” Two examples can show why this has been the case.
First, his so-called “captain-call” while he was Prime Minister in 2023. Regarding the introduction of the capital gains tax and a form of wealth tax in the 2023 Budget, he asserted that while he was the leader, there would be no capital gains tax or wealth tax. Although the preparations were done by the Treasury to introduce both taxes, Hipkins refused them. He had a principled argument for his stance, namely, that the Labour Party did not have the mandate to introduce such a large change to taxation. I believe he made the right choice regarding the wealth tax (David Parker’s baby), but he was wrong about the capital gains tax. Still, overall, the Labour Party did not have the mandate for the change. Despite all these justifications for Hipkins’ position, he got negative responses from the Labour Party membership.
Second, also in 2023, Hipkins had concerns about the policies of possible coalition partners, the Greens and Te Pāti Māori. As Hipkins said regarding the demands of Te Pāti Māori, “Smaller parties should be more realistic with their policy bottom lines.” He was right in this instance too. Te Pāti Māori intended to introduce a 33% tax on land ownership which is ridiculous. Nevertheless, Te Pāti Māori co-leader, Rawiri Waititi responded to Hipkins quite fiercely: Don't tell us what to do. So, Hipkins got into a trap.
This trap is defined by the demands of the Labour Party Membership and the demands of possible coalition partners. Anytime Hipkins attempts to show leadership, he is facing a wall. Therefore, the Newsom turn would be too big for Hipkins. Nevertheless, this situation shows something else too: the Labour Party members and MPs do not want to aspire for the leadership position, and they believe it is still Hipkins who could lead. So, Hipkins’ situation is a recipe for disaster: whenever he shows leadership, he gets booed, however, everyone is content with his leadership – probably because everyone is too lazy to develop a policy agenda for which they would stand up.
There is no other explanation for why Hipkins is still the leader of the Labour Party. His closing speech at the Labour Party annual conference was just an echo of what the membership decided to promote as policy agendas. Nothing else! In this sense, he is no leader just a representative… Therefore, when it comes to possible government roles, it would be a disaster to have the current political landscape on the left-side of the spectrum.
In 2023, in a rare and strong moment of leadership, Christopher Luxon labelled the left-wing parties as the “coalition of chaos.” Even though Hipkins later labelled the right-wing parties also as the “coalition of chaos,” Luxon won the argument. In simplistic terms, on the left-side of the spectrum there are three parties, among them the largest does not bring about leaders. The Greens have had character issues (Golriz Ghahraman, Darleen Tana, or we might even mention the Wellington mayor, Tory Whanau, or Julie Anne Genter) and problematic leaders. Chlöe Swarbrick is admittedly psychologically unfit. Marama Davidson, beyond her unacceptable “white cis-men” comment, was one of the worst-performing ministers between 2020 and 2023. The third, Te Pāti Māori is – let’s put it this way – a huge question mark.
This left-wing political structure would not appeal to the “average voter,” a hypothetical person. As far as I could follow New Zealand’s elections, this average voter has always been wise to elect certain governments. For example, in 2008, the incoming government had an economist as Prime Minister and an economist, Bill English, as Minister of Finance. Since the 1980s, English was the only Minister of Finance who had an economic background. Just at the right moment, when the country needed, after the Global Financial Crisis. This wise average voter is unlikely to allow the current Te Pāti Māori to become king or queenmaker. So, the left-wing parties could form a government only if the Labour Party and the Greens had enough MPs to acquire a majority. It seems impossible with their current leaders.
For this reason, regardless of what the polls suggest, the right-wing parties still have an advantage. They formed a solid coalition in which it is the ACT Party that seems to misbehave, not New Zealand First, as Hipkins’ expectations showed when he ruled out working with New Zealand First after Winston Peters ruled out working with the current Labour Party. The overall political landscape appears to be a stalemate only because the leading right-wing party, the National Party, lost popularity that is entirely due to the Prime Minister’s weak performance. However, as an additional advantage to the right-wing parties, the National Party seems to have realised the necessity of changing the leadership while the left-wing parties have not.
Willis’ incoming step-up
The current historical trends in governance include the cutting off the missteps of woke agendas (e.g. allowing biological males in female sports), the reduction of the state as Elon Musk is carrying it out in the United States, promoting some forms of protectionism, and focusing on national interests (tariffs). Apart from the first component of the existing trends where Winston Peters is working, it is Nicola Willis who is focusing on those policies. In a way, she even preceded the main trends because she announced her plans as Minister of Finance in 2023.
In the campaign, she already told voters that she would focus on checking all the spending and reducing all unnecessary government expenditures. She holds the Public Services portfolio that is in its essence a New Zealand version of the Elon Musk-led Department of Government Efficiency (DOGE). In her intentions, we can identify protectionist elements. For example, she intended to introduce a tax on foreign property buyers which did not eventuate. Recently, however, she announced that the legislation about public procurements will change to favour New Zealand businesses.
For these reasons, it is easy to say that Nicola Willis is the frontrunner when Christopher Luxon gets replaced. In the coming months, Willis will have many opportunities to shine. In May, she will deliver the next budget. Before that, there will be pre-budget addresses when she is about to reveal elements of the coming financial plans. Because she is likely to own the spotlight, it would take only one poll to show to what extent she would be accepted as Prime Minister. If such a poll shows that the gap between her and Luxon is 10% point or less (it does not seem difficult), the obvious choice is to promote her to become Prime Minister. It is likely to happen before July this year.
She has ambition too. It was she who helped Luxon as a first-time MP to understand the background machinations of the National Party before he could step up to be leader in November 2021. And, before the 2023 election, when polling suggested that Luxon might struggle in popularity, she was allegedly planning a coup already. (Bryce Edwards reported this in one of his interviews with Sean Plunket on the Platform, and Bryce Edwards referred to a National Party member outside parliament.) Although she would still be a moderate character, she would bring some colourful moments either intentionally (her comments about Labour’s internal “argy-bargy”) or unintentionally (sizes of holes and sausages). These moments would save her from falling into the depth of unpopularity as Luxon did during the last year.
Nevertheless, by the election in 2026, there is a chance that the whole political landscape will have a tectonic shift. The Labour Party has its annual conference in Auckland in November. There, the intention is to finalise the election manifesto for 2026. If there is a minimal chance to replace Hipkins, it can arrive at that moment. Besides, other factors might influence the New Zealand political map, and we barely talk about these: Foreign policy and security developments. The recent, provocative and unnecessary Chinese live firing exercise on the Tasman Sea are early warnings that security issues might become relevant concerns for the electorate. If so, new faces and policies can emerge and the party preferences will shift dramatically, again, mostly in favour of the right-wing parties.