Adults in the Room.

Team Labour can win in 2026 by presenting themselves as the only adults in the room.

IDENTIFYING A WINNING STRATEGY for Labour isn’t that difficult. Implementing it, however, is something else entirely. In a sentence: Team Labour can win the 2026 General Election by presenting themselves as the only adults in the room of New Zealand politics. Unfortunately, to pull that off, an embarrassing large number of the current crop of Labour MPs will first have to grow up.

For the sake of argument, let’s assume Team Labour has undergone this rapid process of maturation. What’s the most important problem they need to get their heads around?

Overwhelmingly, this country’s most pressing problem is the shortfall between what the New Zealand state takes in and what it pays out. This deficit is set to grow alarmingly over the next three decades, forcing governments to engage in more and more borrowing until the world finally cuts off New Zealand’s credit. When that happens, the nation will effectively be placed in the hands of the International Monetary Fund’s receivers. Not a pleasant prospect.

The next big thing Team Labour’s grown-ups will need to grasp is that cutting state spending is not the answer. As Elon Musk has discovered, the big-ticket items of any modern state cannot be carved out of its budget without precipitating massive economic, social, and political upheaval.

Health, Education, Social Welfare, and Superannuation absorb the Lion’s share of the New Zealand state’s revenues, so cutting state spending by any meaningful degree could hardly avoid a significant and potentially catastrophic downsizing of the welfare state. The impact of such cuts on New Zealand’s already fraying social cohesion would be immediate and severe. Class and ethnic gaps would widen ominously – with fatal electoral consequences for the party responsible.

The third big thing that Team Labour needs to accept is that the only solution to the relentless rise in New Zealand’s national indebtedness is to increase state revenues significantly. Or, to use the words politicians least like to hear: to raise taxes.

And not just in a marginal way, but in big bold steps. Team Labour needs to sharply increase both the rate and the progressivity of Income Tax. GST should be raised from 15 to 20 percent. To break up the steady formation of a Kiwi aristocracy, wealth, inheritance, and property taxes should be introduced, and the old NZ Superannuation surtax reimposed. Team Labour could then, no ifs, no buts, no maybes, introduce New Zealand to the rest of the adult world by introducing a Capital Gains Tax.

For good measure, Team Labour should also slowly, and in stages, raise the age of eligibility for NZ Superannuation from 65 to 68.

Political suicide! Never going to happen! Labour doesn’t have the balls! Angry objections to Labour’s fiscal policy, as strident as they are predictable, will flow like molten lava. Tax experts will opine that such flagrant fiscal rule-breaking is economically and politically impossible.

But the rules that became embedded during New Zealand’s long period of relative prosperity, are unlikely to endure when the institutions upon which New Zealanders have come to depend – public health and education, welfare benefits for those who have fallen on hard times, a guaranteed liveable income for the elderly – are rapidly decaying, or being shut down altogether, by a state that is, amidst ever-increasing squalor and dysfunction, going broke.

Even so, on the Right, reducing taxes remains an article of political faith. No matter that cutting taxes in the face of a growing government deficit constitutes fiscal vandalism. No matter that the inevitable reduction in revenue cannot be made good except by drastically reducing the state’s capacity to meet its citizens’ needs. No matter that, if the political will to implement the required slash-and-burn austerity programme simply isn’t there, then the level of state indebtedness will continue to rise, and rise, and rise. Or, if the political will to inflict deliberate harm on society is present, then respect for democracy will soon be absent.

The present National-Act-NZ First Coalition Government thus finds itself teetering on the brink of the moral abyss into which all political elites willing to impose severe austerity measures on their nation’s most vulnerable citizens are bound to fall.

Finance Minister Nicola Willis remains wilfully blind to both the economic and political consequences of her refusal to abandon National’s promised tax-cuts. In the face of near universal condemnation from the economics profession, she slashed an astonishing $12 billion from the income side of the state’s ledger. Only to discover that the internal politics of the governing coalition ruled out any serious attempt to make good the resulting revenue losses through answering expenditure cuts.

Willis is equally unwilling to acknowledge the long-term dangers of continuing to borrow to pay the nation’s grocery and medical bills. Her faith in the budget-balancing power of Prime Minister Christopher Luxon’s “going for growth” mantra seems absurdly hopeful in the face of so many New Zealanders’ loss of confidence in their country’s future.

But, what other choice does Willis have? From an electoral point of view, admitting that she and her colleagues have decided to lay the burden of their folly and cowardice on the shoulders of future generations is unlikely to impress young New Zealanders – or old ones, for that matter!

The actions of the Trump Administration aren’t helping the Coalition Government. The image of Elon Musk wielding a giant chainsaw in front of a delighted audience of hardline conservatives is unlikely to fill mainstream New Zealand voters with positive feelings toward the lumberjacks of austerity. Between them, National, Act, and NZ First already have the votes of most of those who take pleasure in seeing the livelihoods of their fellow Kiwis, along with the services they provide, chain-sawed. The Far-Right micro-parties have the rest.

The omens for a sweeping Labour victory could hardly be more propitious – but is there anyone in the current Labour priesthood capable of reading them? Does Chris Hipkins have what it takes to grasp the nettle of constructing a new electoral paradigm? As New Zealanders observe with growing dismay the decay and failure of vital institutions and infrastructure, does Hipkins possess the historical chops to proclaim a new economic and political dispensation?

Because the task of presenting New Zealanders with the brute facts of neoliberalism’s failure could hardly be more urgent. Forty years of being told that it was possible to slash taxes, cut services, borrow billions, and she’ll be right: that we could, somehow, beggar our country while enriching ourselves; has come to an end. The whole bipartisan neoliberal pitch, daily disproved by an unending parade of grim headlines, has lost its mojo. And everyone except the true-believers knows it.

But before Labour can dismiss the childlike naivete of the Right, it must first sever its own ties with the children of the Left. Hipkins’ pitch must be simple and brutal: give us the numbers to fix this; free us from the infantile demands of the Greens and Te Pāti Māori.

The next Labour Government must be clear-eyed in its analysis and plain-spoken in its appeal to the electorate. It needs to argue, calmly and firmly, that nobody can reasonably expect to receive a full insurance payout if they’ve spent the previous forty years colluding in the fiction that the premiums they were being asked to pay were fair and adequate.

If the citizens of a nation wish to receive timely and professional public health care; if they want their kids to be publicly educated to the limit of their potential; if they want state support in times of hardship and loss; if they want a dignified retirement; if they want utilities that supply their core needs at reasonable cost; then they must be honest enough to bear the true fiscal cost of sustaining those public goods.

New Zealanders now know what skimping on taxes means for the communities they live in. They are open to a new way of conducting public affairs. But they will not move towards a new economic and political dispensation unless they are convinced that the politicians offering it are serious, responsible, and competent individuals. Men and women who know what men and women are. Citizens who refuse to divide their fellow citizens along ethnic lines. Upholders of traditional democratic rights and freedoms – especially the right to freedom of expression. Human beings who refuse to instruct other human-beings that 2 + 2 = 5.

Adults in the room.