Under-fire Labour turns sights on bank profits and fuel

Under-fire Labour turns sights on bank profits and fuel

“[Labour] can disagree with something happening, but unless they’re willing to change it themselves – and let’s be clear, they do have the power to do that – then what are we all here for?” – Brad Olsen

Labour faithful were in fine form at the party’s annual conference last weekend, but an unflattering political poll on Sunday soon soured the mood. 

Prime Minister Jacinda Ardern – roused by conference, poll, or both – was quick to question the numbers, and turn attention to banks’ high profits. 

Collage of Jacinda Ardern, petrol pumps, ATM and bank profit charts


Photo: Photos: 123rf.com – RNZ / Composite Image – RNZ

The Newshub-Reid Research poll on Sunday was teased as one that would send a shiver up the spine of one party. The numbers showed fewer than one in three voters planning to back Labour – 32.3 percent – with National and ACT easily able to form a government. 

It was Labour’s lowest level of support since Ardern became leader in 2017. Fresh from announcing a childcare support package at the conference, she instead had to answer questions about her own falling popularity in her Monday interviews. She played down the poll’s accuracy in comparison to Labour’s own polling – brazenly suggesting its infrequency made it less credible – but other polls tell a similar story: the right outpacing the left. 

With about a year before the election, no party is popping the bubbly just yet.

National’s deputy leader Nicola Willis pointed to the fickle nature of polling and suggested the only certainty was the election would be close. 

The smaller parties had a similar perspective. ACT’s David Seymour was encouraged and said it showed there was a mood for a change of government. The Green Party was proud of consistently polling above its 2020 election result, but wanted Labour to spend more of its “enormous” political capital. 

Te Pāti Māori co-leader Debbie Ngarewa-Packer said her party’s work did not change from poll to poll; and Winston Peters – whose New Zealand First at 3.3 percent was inching closer to the 5 percent threshold – was confident. 

Read more:

University of Auckland political scientist Lara Greaves says it’s politicians’ jobs to play down polls. She says Labour needs to find a clear message of hyping up its successes, and stick to it.

“Of course, trying to woo this mythical center voter will actually be based a bit on polls and focus groups and trying to figure out which framings work well with them … but I suspect what they’re trying to do at this point is to really figure out the best way that they can package economic policies in that center ground without seeming too Labour, in a way.

“Most voters in election studies view National as most competent at running the economy so it’s quite important for Labour to not cede that much center ground when it comes to the economy – and that’s quite a hard position for a center-left party to be in going into an election, especially after being in government for two terms.”

At Monday afternoon’s post-Cabinet media briefing, Ardern fell back to an old political trick: attack a bogeyman less popular than you – in this case, the big banks which are pulling in sizeable profits in a cost-of-living crisis.

The only thing missing was a solution – at least, one not already proposed by the Greens. Their Finance spokesperson Julie Anne Genter had launched a policy of taxing excess profits just the previous week. 

Infometrics principal economist Brad Olsen says he’s not convinced such a tax would bring inflation under control, but it’s at least worth looking at. 

“I think the difference around it at the moment is again, what we’re trying to achieve with it … if you were to apply it in the future, I’m sure you would see some sort of shift,” he says. 

“But let’s remember as well, that it will also work against the independent central banks view that the banks need to be holding more capital – which they do over time by ensuring that they are generating those profits that they then reinvest in their own business – so I guess there’s just a bit of tension there, again, over government policy settings.”

A tentative announcement on open banking at least signified there are areas the government is looking at to increase competition – but it’s still a long way off, well behind other jurisdictions, and comes with considerable uncertainties.

Another thing biting into Kiwis’ pockets right now is fuel. Energy Minister Megan Woods on Wednesday announced the Commerce Commission would be given the ability to set wholesale prices if they become disproportionate.

But the government’s cut to excise – set to end in January – costs $31m a week and can’t go on forever, and could add more fuel to the inflation-pain fire being felt by New Zealanders. 

Labour still has time to turn its falling popularity around, but it will require more than just attacks on banks, fuel companies and supermarkets – and with high inflation expected to continue into the new year, it may find itself running out of things to blame.

In today’s Focus on Politics podcast, RNZ Political Reporter Giles Dexter examines a tough week and a tough poll for Labour – and how it responded.

Listen free to Focus on Politics on Apple Podcasts, on  Spotify, on iHeart Radio or wherever you get your podcasts. 

Source link

Share This
COMMENTS

Leave a Reply

Your email address will not be published.