Stuart Nash Cabinet demotion, really? Chris Hipkins may have just delayed the inevitable

Luke Malpass is Stuff’s political editor.

ANALYSIS: The news that Todd Muller will retire from politics ruled a line under an extremely divisive and disruptive period for the National Party.

The Muller leadership debacle gave birth to Judith Collins’ ill-fated leadership and the subsequent rise of Christopher Luxon as National leader – probably earlier than desired.

Thanks to Muller’s short-lived time at the top, Labour got something that was previously unthinkable: a straight majority Government in an MMP system. That in turn led to a Labour Government seeking to hew to the middle while trying to make an avalanche of legislative reform, and ultimately drifting away from the median voter.

Muller leaves, in one way, as a tragic figure in New Zealand politics. A thoroughly decent man, one who was feted as the leader, but who got the job in extraordinary times against a prime minister (Jacinda Ardern) with sky-high popularity, and clearly fighting his own demons in private. In the end, the toll of being leader of the opposition was more than his mental state could handle at the time. We wish him well.

Fast-forward and Labour’s majority gradually fell away in the polls, leading to Ardern announcing her resignation in January and the ascent of Chris Hipkins.

READ MORE:
* Ruthless Chris Hipkins moves against Stuart Nash and purges another pre-election problem
* Stuart Nash’s downfall and the dangers of big-dick politics
* Stuart Nash resigns as police minister after phone call to police commissioner about criminal case

Hipkins, now fully in the job, is not going to die wondering. He’s been ditching policies, dispatching ministers and trying to get Labour out in front.

For the Labour Party, this has been a new dawn. Most of their ministers didn’t even know they needed a change until they got it. Now they have embraced it and are feeling much more positive about the year ahead.

Well, they were feeling very positive until Stuart Nash admitted on talkback radio that he had called up the police commissioner and inquired as to whether police were going to appeal a light sentence of a bloke in Southland who had been stockpiling guns.

It’s one thing to be caught doing it, quite another to be bragging about it on talkback radio, which Nash did. He did a radio slot in the morning and by 2pm the same day he’d been dispatched from the police portfolio by Hipkins. Officially, he’d resigned.

However, Hipkins said he would get to keep his other portfolios because it was the first time he’d done something like this and so the punishment had to be proportionate to the crime.

It now appears it wasn’t a one-off and that Nash had previously been warned by Attorney-General David Parker about a public comment relating to crime. Crown Law looked into prosecuting him.

By late Friday afternoon, Hipkins had demoted Nash to the bottom of Cabinet after it turned out he called a senior official about an immigration matter. This is surely one of Hipkins’ biggest misjudgments yet.

While certainly not doing anything for personal gain, Nash had clearly been far too loose in his dealings with officials in matters in which ministers should not be interfering.

It also creates a problem for Hipkins. Nash was given the police portfolio again – he had held it first for three years from October 2017 – because he is a straight-talking, tough-on-crime guy. In a party where lots of MPs like to wring their hands about the social causes of crime, structural disadvantage and institutional racism and the rest, Nash was cut from a different cloth.

It isn’t so much that some of those things aren’t true, but that as police minister you are responsible for the agency tasked with crime fighting and prevention where possible. Its underlying social causes are the domain of others.

Indeed, at a big Zespri function at Parliament on Wednesday night, a few hours after Nash got axed from police, more than one person commented to me that they had never understood why he was in the Labour Party in the first place.

In any case, Hipkins will have to choose a new police minister to see out the end of the year, and while ramraids may have subsided, there is every evidence that law and order will play a key part in the campaign and the politics of the year.

Meanwhile, it’s official: the economy is shrinking. While there is not technically a recession yet – defined by two quarters of consecutive negative growth in gross domestic product – it is clear the expected economic headwinds have now well and truly arrived.

The Stuff headline announcing the news read “economy on the skids”. Food inflation, in particular, has been fearsome, now exacerbated by the cyclones and floods earlier in the year.

This is the key issue the Government needs to do something about, and with a Budget less than two months away, we won’t have to wait long to see it.

But winter is coming, and it will be a long, hard one. For a start, emergency departments already seem to be struggling. It will be another winter with plenty of Covid-19 plus all the usual winter illnesses. Goods and services will continue to increase in price even if by election time the headline inflation figure may have fallen a bit.

The annual deficit on the current account – effectively when the amount New Zealand spends on imports is greater than the amount it earns from exports – is currently $33.8 billion, or 8.9% of GDP. That’s the highest the number has been since Stats NZ began the data series in 1988. Effectively, New Zealand Inc is spending a lot more than it is currently making overseas.

There was also a teachers’ strike this week, which may be the first in a series. Nurses also look likely to go out later this year. Mismanagement of district health boards that have been subsumed into Health NZ/Te Whatu Ora still needs to be sorted. Surgeries in Canterbury, for instance, are being massively crimped because of a shortage of anaesthetic technicians.

While the cyclones may well deliver a boost to GDP, and unemployment will stay low, there will be big challenges this year.

The Labour Party believes Hipkins is really turning the ship around, while National seethes, simply disbelieving what it sees as window dressing, or Labour pretending it’s something other than what it really is.

Both are right to a degree, but also wrong. And the bad news for both major parties was that in the 1 News Kantar Public Poll released on Monday, they both went down, supplanted by ACT and the Greens.