Guest Column

In New Zealand, Christopher Luxon’s Leap

According to Enoch Powell, “all political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs”.  

Former New Zealand Prime Minister Dame Jacinda Ardern may be a rare exception. Suddenly departing at the start of 2023, albeit amid plunging popularity ratings, she handed over the reins to senior minister Chris Hipkins while preparing her move to greener pastures at Harvard. It was a wise decision because, ten months later, New Zealand turned against Labour in a landslide, and the National Party’s leader Christopher Luxon became Prime Minister.

New Zealand’s change of government was one of the most dramatic in its recent history. Labour lost nearly half the vote, and seats, it had gained in 2020. Admittedly, the 2020 election was unusual. It coincided with the first wave of Covid (and the second wave of “Jacindamania”). 

Something dramatic must have occurred for a government to lose that much support in such a short time. Ardern was spared an ignominious end by quitting early. 

New Zealand was not as lucky as Ardern. The tumultuous six years of Labour resulted in a country in which all aspects of the economy, public life and society are in disrepair. This is the backdrop against which Christopher Luxon’s government has begun its work. Taking a step back to see what Ardern and Hipkins left behind will help us understand just how big a task New Zealand’s new government faces. 

In 2017, Ardern was a last-ditch candidate for Prime Minister. Her predecessor as Labour leader, Andrew Little, threw in the towel when Labour received an approval rating in the low twenties in polls just a couple of months before the 2017 election. 

Labour did not expect to win. Hence, it was ill-prepared when it did, propelled by a media frenzy around its new, fresh leader, and with the unexpected support of the mercurial Winston Peters.

Over the next six years, Labour had to learn the hard way, developing policy ideas while, at the same time, being confronted with a series of crises: a major terrorist attack, a deadly volcanic eruption, the Covid pandemic, and finally the Ukraine war. It would have been a challenging time for a competent, experienced government. It was too much for a government still learning the ropes.

The one thing Ardern’s government had in spades was the Prime Minister’s charisma and marketing skills. However, after six years in office, New Zealanders had become increasingly disillusioned by the vast discrepancy between the Labour government’s lofty promises and the socio-economic outcomes it delivered. 

Consequently, the situation for Luxon’s government is dire: the kitty is empty, and severe challenges abound in every area of policy. The new government cannot simply throw money at problems, as incoming governments often do (and as Ardern did). New Zealand’s government spending is already too high, and especially in the current high-inflation environment, more public spending would be most unwise. Luxon will thus have to prioritise his reform efforts on cost-effective policies that deliver significant impact. He also must do so in an unusual three-party coalition, which includes the classical-liberal ACT party and the populist New Zealand First, led by Winston Peters.

The stakes could not be higher or the obstacles greater. But Luxon, coming from a high-flying business background, is one who likes a challenge. As a former executive at Unilever’s North American branches and then at Air New Zealand, Luxon knows what turnaround jobs require. He will need all that business acumen.

New Zealand’s public service is like a poorly managed company that fails to produce decent results and has forgotten what good looks like. It is not as if successive New Zealand’s governments have not spent enough over the years. It is rather that they have done so senselessly, often without sufficient regard for outcomes.

Luxon has wasted no time getting to work. In his government’s 100-day plan, practically all of Jacinda Ardern’s hallmark policies were scrapped. High-profile initiatives like the Auckland light-rail project and the Lake Onslow pumped-hydro scheme have been axed. So were the Reserve Bank’s employment mandate and Ardern’s re-regulation of the labour market and subsidy schemes for electric vehicles.

Luxon’s government abolished the highly controversial Three Waters program, which would have taken away the nation’s water infrastructure from councils and put it under co-governance with Māori. It also abolished the Māori Health Authority, uniting health services for all residents in one organisation. Luxon’s clean-up exercise has been so comprehensive that practically nothing of the previous government’s agenda is still in place.

With the 100-day plan implemented, the focus for the coming months and years is now shifting towards reforms across the board. Education is a good example. The new government wants to arrest New Zealand’s slide into mediocrity and propel the nation’s education system back to the heights it once occupied. There is a crisis in New Zealand’s educational system, manifested by serious literacy and numeracy deficiencies. It is largely self-inflicted due to wrong priorities in schools. Over the past three decades, the school system has been moving away from traditional teaching rigour and towards a fuzzier focus on wellbeing, creativity and so-called twenty-first-century skills. The situation has been exacerbated by plummeting attendance rates with an alarming rise in students deemed chronically absent. 

Luxon’s government has embarked on a comprehensive overhaul of the public school system. This starts with a renewed focus on core academic disciplines and rigorous standards of literacy and numeracy. The introduction of direct, standardised testing in these areas is also on the cards. It will not only assess the current capabilities of students, but also set a benchmark for future educational achievement. 

Crucially, a knowledge-rich curriculum is essential. A ministerial advisory group, chaired by Dr Michael Johnston, has set out to write it in the crucial areas of English and mathematics. It could deliver the most significant education reform New Zealand has had this century.

Housing is another area in which reform is much needed. In New Zealand, houses are grossly unaffordable, putting a dampener on home ownership dreams. The underlying problem has long been a housing market suffocated by rigid planning laws, which limit land supply, and a lack of fiscal incentives for councils to approve new projects.

As a member of business delegations organised by the New Zealand Initiative, Luxon visited Switzerland and Denmark. These visits have informed his response to the housing issue, and the concept runs under the name of “localism”. Localism means councils are not just encouraged, but also financially motivated, to support development. This should transform them into agents of growth. They will be able to increase their revenue by facilitating new development.

Housing Minister Chris Bishop’s work to overhaul New Zealand’s archaic planning laws complements this vision. By streamlining the process for new developments, Bishop’s reforms aim to dismantle the bureaucratic barriers that have stalled progress. Together, these planning reforms and localism have the potential to turn the housing market around.

But as Ardern’s legacy is dismantled, the elephant in the room is fiscal consolidation. Navigating New Zealand’s fiscal landscape presents a formidable challenge in the years ahead. Following a period of restraint, during which core government expenses had fallen to 27.3 per cent of GDP in 2018, that trajectory shifted with Ardern’s 2019 “Wellbeing Budget”. However, even Ardern planned to keep it below 30 per cent of GDP, prior to Covid. Covid then helped propel spending to a projected 33.4 per cent of GDP this year, with only a gradual reduction to 31.4 per cent by 2028 anticipated by Treasury. This shows just how much work there is to do to bring spending back to a reasonable level. 

Facing these realities will test the resolve and strategic acumen of the Luxon administration. To succeed, it will have to do two things: First, Finance Minister Nicola Willis must balance the books in a technical sense. That means government spending will need to be cut back as a proportion of GDP. Second, and perhaps more critically, Luxon’s government must also bring back more discipline and evaluation to government spending. Rigorous cost-benefit analyses have been absent from New Zealand for years. They must become standard practice again.

Fiscal sustainability requires hard choices and unpopular decisions. However, the alternative—continuing with the status quo—poses an even greater threat to economic stability and social wellbeing.

As an avid reader of political biographies and memoirs, Christopher Luxon will now work towards his own legacy. Ultimately, that legacy will be defined by his government’s ability to lay the foundations for a prosperous, productive, resilient and fiscally responsible New Zealand. If he does that, he may be another exception to Enoch Powell’s iron rule of politics.

Dr Oliver Hartwich is the Executive Director of the New Zealand Initiative

15 thoughts on “In New Zealand, Christopher Luxon’s Leap

  • pgang says:

    Winston Peters has a lot to answer for in the way he sold out New Zealand to look after himself.

  • lbloveday says:

    Quote: He also must do so in an unusual three-party coalition, which includes the classical-liberal ACT party and the populist New Zealand First, led by Winston Peters.
    The Australian 8/4/2024 page 11, sees it differently:
    The country’s new Prime Minster, Christopher Luxon, has made strong progress in unwinding Ardern’s woke legacy, as the leader of a three-party coalition between the Nationals, Winston Peters’ AUSTRALIA First and David Seymour’s ACT party. (my emphasis)

  • David Isaac says:

    Dr Hartwich is really far too charitable about the performance of Dame Jacinda, implying that it was mere incompetence which caused her to deep six the New Zealand economy and flood the traditional population with foreigners, all the while instituting world’s best practice terror on the populace.
    Is she not a WEF young global leader? Was she not part of Helen Clarke’s department at 21 and then a senior policy adviser in the Cabinet Office during Tony Blair’s reign of ruination whilst still in her mid twenties? Was she not, at age 27, president of the International Union of Socialist Youth? Can there be any doubt that she is a ranking member of the Fabian Society which seems bent on bringing in a Brave New World style tyranny in which all family bonds, races and religions have been destroyed?
    This is a spiritual battle in which managerial efficiency will not be enough. European people everywhere, with their once-cherished traditions of freedom, need to understand that they are the pre-eminent target of this pack of hyenas.

  • Bron says:

    David Isaac
    Your contributions are becoming less and less coherent. I don”t know why you are so fixated with European subjugation by immigrants. A smokescreen perhaps as I hear whispers you are Middle Eastern. Not that there is anything wrong with that. Jacinda would love to give you a hug.

    • lbloveday says:

      I don’t understand why people read them. Seems, to me, somewhat masocotic.

    • David Isaac says:

      Following on from your sordid and puerile ad hominem after Rachael Kohn’s article from 31st March, this is just more put downs and feigned naivety.
      The replacement of Europeans in all our territories is real. It’s intentional and it’s accelerating. Counterproductive economic policies can be changed but demographic destruction is all but permanent. Still, European countries including Australia must swiftly reassert their right to run their countries for the benefit and reconstitution of their White majorities. Israel and Zionists can hardly quibble with this, as this is the same policy they reserve to themselves.

  • Dallas Beaufort says:

    That stinking elephant in the room for 5 decades, Bad white man made global warming and its dribbling pup Net Zero needs extinguishing.

  • Ceres says:

    A “charismatic” leader. Hardly. A description invented by the media and repeated ad nauseum. A woman who decreed with her never ending phoney smile “we will be your single source of truth”.
    Good to see Luxon tearing her Socialism down. Now let it happen here next year.

  • sfw says:

    Just heard that NZ is also cutting migration by a huge amount and tightening the rules for visas etc. If only the Libs or Labor here had a similar policy, they don’t, they’re just different cheeks of the same backside.

  • lenton1 says:

    Yes, please let it happen here next year, BUT, as much as we all yearn for Mr. Dutton to rip to shreds each and every bit of Lab/LINO socialist bile, he is no Luxon. Whilst a noble attribute, as a former QLD copper, he’s hardly someone with the intuitive business acumen needed to turn our ship of state around. And unless he abandons the ignoble need to be liked and unequivocally begins to create sound and confident conservative policies on everything (and sorry, while a viable long-term necessity, nuclear power will NOT sway the majority) then we will be the laggard nation in not outing the socialist cancer, as enlightened countries are finally beginning to find the courage to do. (Tho Old Blighty is soon to seal its sad fate. RIP Britannia.)

  • Elizabeth Beare says:

    It all sounds so hopeful. Make you want to pack up and leave for the Shaky Isles. Australian voters should be keeping watch and bringing pressure to bear on the Liberals, because this sort of planned attack on the woke leftism we are experiencing under Labor should be ready to roll at the next election here.

    Faint hope though. Australian voters are still easily swayed by two things – cash handouts for struggle street who are feeling the heat but can’t see where it is coming from, and beat-ups about climate change for the ‘educated’. Our education system has a lot to answer for in both cases. It will probably take another election cycle and further and obvious damage done before we vote out the current destroyers.

    More news more frequently from across the Tasman might help point to another way: the good news that a chainsaw is a good policy option. More easily done in NZ than Argentina I suspect. Keep it coming.

  • Elizabeth Beare says:

    “Still, European countries including Australia must swiftly reassert their right to run their countries for the benefit and reconstitution of their White majorities. Israel and Zionists can hardly quibble with this, as this is the same policy they reserve to themselves”.

    I don’t like your tone, here, David Isaacs. Israel and Zionists (Jews and Zionists?) are part of European history and tradition, their heritage is ours, in our Judeo-Christian culture. They are a Mediterranean people and white under any non-racist interpretation of the term. As a nation, Israel protects its own culture, while democratically welcoming other contributors. Why raise Jewish ethnicity at all unless you have some hidden barrow to push here? Not one I like.

    I agree with you that we have immigration policies in Australia intended to cause social disharmony and gain a left-voting electorate, and that they are implemented with a view to removing a lot of our traditional heritage, which the left regard as unacceptably colonial. Also that, as Douglas Murray writes, Europeans including the British have let themselves be culturally over-run by immigration from unfriendly cultures, sometimes out of goodwill and sometimes out of misplaced economic hopes, and that is happening in Australia too. In the US, Biden’s immigration policy is deliberately destabilising to suit his own political electoral purposes.

  • David Isaac says:

    Lets be real. You need to look a little deeper than the supercilious Douglas Murray- an ardent Zionist by the way – is prepared to, if you wish to find the root causes for the apparent suicide of the West.
    Judeo-Christian is a neologism designed to deceive. Traditionally the two were viewed as opposing principles and Jews had to convert in order to influence Christian culture, which many did in 16th C. Spain, playing a prominent role in the Society of Jesus. This requirement changed with the emancipations of the late 18th century and the spread of Freemasonry. Atheistic Judeo-liberal culture began to rise in challenge to Christianity. This really became evident in the last hundred and twenty years after Ashkenazim moved en masse from the doomed Romanoff and Hapsburg empires to the United States, rapidly dominating the new propaganda vehicles of film and television. Jewish-led liberal purging of Christianity from US schools and colleges and the sequential enshrininement of race denial, multiculturalism and now anti-White anti-racism were the crowning achievements of this cultural takeover. It has all been a snowballing disaster for European gentiles and has rendered them far less able to mount a coordinated effort to reclaim cultural hegemony in what used to be undisputedly their countries.
    Alejandro Mayorkas’ immigration policy seems aimed at disenfranchising and weakening the shrinking American majority to the point where the threat of them rebelling over the takeover of their country and the brainwashing of their neighbours and their children need no longer be a consideration. Search ‘Biden C-SPAN an unrelenting stream’ to see Biden gloat over the demise of the American majority back in 2015. Mayorkas, who is Jewish, was there next to him even then. Biden’s grandchildren, bar one illegitimate child, are all Jewish.
    Fifty percent of campaign contributions to the Democrats federally come from Jews ( it’s only 25% for Republicans.). However much they may wring their hands over the current slaughter in Palestine, the Democrat leadership are still ensuring the flow of funds and materiel – with plenty of support from AIPAC-approved Republicans. They are loyal nationalists in favour of Israel, at the same time as their nominal country is invaded from
    the south. The only check on this support seems to have been an upwelling of popular indignation especially from the left, which has forced some performative wrist-slapping of Bibi and his gang.
    What to make of it all?

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