Comment: New Zealand stood uncertainly at multiple economic and social crossroads at the end of 2024. The hope was that a long, hot summer break would induce people to face 2025 with more confidence.
But a combination of circumstances, domestic and international, as well as largely indifferent summer weather which frustrated many, has dashed that, at least for the time being. So, at this stage, 2025 looks like being just as grim as last year.
Globally, uncertainty levels remain high. The advent of the second Trump administration underpins that, with genuine fears about its proposed protectionist tariff policies. While the cease-fire in Gaza has been a positive step, doubts remain about its durability.
Moreover, the likely impact on international stability of the Trump administration’s overall approach to Middle East issues, as well as Russia’s continuing invasion of Ukraine – which President Trump has previously pledged to stop – remains unclear.
In New Zealand, aside from the disruption caused by the weather to so many well-rehearsed holiday plans, many people spent the holiday period pondering about their job prospects, given the retrenchment occurring across so many sectors of the economy.
Reducing inflation and falling interest rates are limited cold comfort in an environment where redundancy remains a real prospect.
The year’s first public opinion poll showing National falling behind Labour for one of a few occasions in the last two years, but the coalition government still being re-elected, has contributed further to the uncertain mood.
Although it is but one poll, and the next election is still just under two years away, it confirms a sharp slump in National’s fortunes over the last four to five months.
Some will see the announcement of an unexpected but not unnecessary Cabinet reshuffle a few days after this poll as not entirely coincidental. A more likely explanation is that despite previous denials he was considering a reshuffle, the Prime Minister was always intending to make changes to his line-up at the start of this year, to attempt to regain the political initiative before Parliament resumes next week.
In that context, the replacement of Dr Reti as Health Minister was hardly a surprise. His performance sadly confirms the experience of successive governments that the appointment of specialists to the health and education portfolios seldom works, simply because such appointees are too close to their respective professions to make the often tough and objective decisions required.
However, that is not to suggest that the Government’s problems will now immediately improve with Simeon Brown in charge. The GP and nursing crises, let alone the hospital building crisis, or the pressure on spaces for professional training, will not be resolved just because a self-proclaimed “outcome-focused” Minister is now in charge.
The road will still be as challenging and the public just as demanding, but Brown may be able to more clearly set out and explain the government’s health agenda than Reti did.
Reti’s shift to the new, important, ‘universities’ portfolio is an attempt to save his face to some extent, but his demotion from No 4 to No 9 in the Cabinet ranking underscores the degree of his fall from grace (and must leave the universities wondering about how much influence he will have in the new portfolio). It also sends Reti a clear signal that it may be time for him to review his political future.
Concentrating all economic power under Finance Minister Nicola Willis’ wing in the new economic growth portfolio sends a clear signal that National wants to make this area its own within the government, reducing the potential impact of the lofty but always waffly pontifications of regional development minister Shane Jones, or the ideological babble of regulations minister David Seymour.
Both have made comments from time to time at variance from National’s preferred economic line. Willis’ new role will give her more clout to deal to such comments and put a stronger National stamp on economic policy.
The transfer of the public services portfolio to Judith Collins is significant. She is likely to quickly forge a strong relationship with new Public Services Commissioner, Sir Brian Roche, who made some insightful comments last week about improving the delivery of public services. Together, they look set to bring about substantial changes to the way in which public services are delivered.
Predictably, Labour has dismissed these changes as no more than a rearrangement of deck chairs on a sinking ship. Although a shallow, hackneyed response, it does point to one important aspect.
Much of the uncertainty that currently attaches to the Government’s programme occurs because so far it has been rather inept in explaining what it is trying to achieve. And without a clear sense of policy delivery, ministerial personnel changes account for very little.
The Prime Minister’s pre-Christmas comment that he took little notice of opinion polls was correct in one sense, but, intentionally or otherwise, sent an unfortunate signal that the Government was not too interested in public reaction to its policies.
With polls now showing more people think the country is heading in the wrong direction, and National’s support eroding, such an approach should be sounding alarm bells.
In response, National will need to be far better this year in engaging with the public and explaining its policy programme than it has been so far, if it is to recapture the support it has shed in recent months. More of the same will not arrest the current decline in National’s fortunes.
A lot is therefore resting on the Prime Minister’s “exciting plan” unveiled in his state of the nation address this week.
To succeed, it will need to give people a clear sense of the Government’s expectations and plans for the year ahead, while demonstrating genuine empathy with the issues that concern them.
Otherwise, the uncertainty and anxiety appearing at the end of last year risks becoming entrenched. In that case National’s downward slide in support will continue.
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