Luxon’s year zero sets up a competitive 2022

Tuesday was day zero for the National Party. When Christopher Mark Luxon, otherwise known as Chris, or CML, emerged as leader, it was as if the past few years of National Party dysfunction didn’t exist.

Luxon steadfastly refused to talk about the immediate past, and focused on the future. If you were to watch from outer space, you might assume that John Key or Bill English were the last leaders of the party.

Luxon does have one thing very right: National does need a good restart, and to end the chaos and backbiting of the last three years. He promises there is now going to be fresh leadership and a highperformance team.

He has a tendency to slip into TedTalk mode at times. A quick learner, he will have to pare back the corporate-speak. There are signs it is already happening: a relaxed and confident communicator, he has hit the ground running, clearly enjoying having a full schedule after the relative quiet of being a backbench MP.

Parliament is about to enter its final two sitting weeks for 2021, which is really a week and a half. That means Luxon has a couple of weeks maximum to firmly set National’s direction of travel before people tune out for Christmas. While some think that this could stop any momentum in the new leadership, it will probably work in Luxon’s favour: 2021 will be the year of division, while 2022 will have a settled team and a clean slate.

The new leader has had a good start. He now has the tricky task of both living up to the hype and gently repositioning National towards what he calls a ‘‘moderate’’ centre-right party, aimed at winning votes from those who abandoned National for Labour and ACT at the last election.

The appointment of Simon Bridges as finance spokesman and No 3 in National’s caucus rankings on Thursday was a key first move.

Not only does it satisfy the requirements of bringing the party together, but Bridges is clearly the best choice for the job and a good foil for the new leader. While Luxon is the slick CEO, resultsgetter but blue-sky thinker, Bridges is a scrapper who will revel in taking on the Government.

The rest of the caucus reshuffle, expected on Monday, will show just how meritocratic Luxon really is in his selections. Because he is so fresh and new, he is in the rare position of not really owing anyone anything.

If he says that positions are on merit, and based on people’s strengths, there will be little internal second-guessing of his motivations. He wants to win in 2023. Everything will be marshalled towards that goal. Winning back voters on economic management will be key. The period leading up to the election dented National’s economic brand appreciably – and Labour’s Covid management, led by Grant Robertson on the economic side, was a recipient.

Even since the election, National’s approach to economics and managing the finances has been inconsistent and muddled, sort of tied up with the Covid response, but sort of not. There have been some good ideas, and some stuff that hasn’t passed muster, such as a proposal to dish out a $4 weekly tax cut.

Luxon and Bridges’ first task is to get back in the mode of being a party and leadership team that people ask about economic issues because they actually have something sensible to say, rather than falling on weak sloganeering. This will require spelling out an overall framework for how National views the economy. A big part of that will be offering up solutions, rather than just bagging the Government for being hopeless.

The most difficult thing in opposition is being judicious about what to oppose. Hanging two or three big failures round the Government’s neck and reminding the public about those will be far more effective than barking at every passing car. ridges will be working on pushing four major areas: productivity, wasteful spending and debt, cost of living and inflation, and immigration. There is plenty of material to work with in all of these areas.

Productivity, while the most important, is also the most difficult to build a political argument about. New Zealand’s woeful productivity performance has been decades in the making.

In the long run, improvement in productivity is the only thing that genuinely lifts real incomes. But explaining its importance and fixing it are much harder. It includes having a world-class education system, something which Luxon, unexpectedly, has pushed hard over the past few days.

New Zealand’s debt, while low by international standards, is a worry to many voters. As an isolated, relatively open trading economy, it needs to keep debt levels low, precisely for external shocks such as Covid-19. A more forensic examination of how much of the Covid spending was really

BCovid-related, and how much went on pet Labour projects, should yield some interesting results. As with productivity, talking about debt needs to be a real-world discussion: money spent now means less money for schools, hospitals and police later. One of the problems during the 2020 election campaign was that National banged on at one point about maxing out debt at 36 per cent of GDP, instead of 48 per cent. The percentages and numbers are so big and abstract as to not really mean anything.

The cost of living versus wages could prove one of the most potent issues. Worse for the Government, inflation is rising around the world, and there are limited levers it can pull, as some of it is a result of global supply chain restrictions. But some of it is clearly fuelled by the massive amount of money the Government and Reserve Bank have squirted into the economy, and the closed border.

With inflation expected to ride even higher, and interest rates likely to rise in the new year, household budgets will get crushed. Governments tend to be blamed for this. Either way it means less money in pockets for some very indebted homeowners. The other issues that are both more immediate and broader will be the border and immigration. Already the extremely tight labour market and closed border are causing problems.

That ties into the immediate Covid response. But stepping back, the Government’s benighted immigration reset will be a big area for National. While visas for people already in New Zealand are now being granted, the wider shape of immigration policy is still a mystery.

Who will be let in, how many, and how quickly will applications be assessed? There are definite inroads that National can make in this area, which could prove to be a sleeper issue in 2022 and through to the 2023 election.

Luxon’s attempt at year zero certainly is a fresh start for National, provided the preceding years don’t start to seep back into the light. Labour is watching warily, waiting to see how the political neophyte shapes up. If a week is a long time in politics, a 2023 election is an eternity away. But it has been a good start.