The Making and Breaking of Jacinda Ardern's Labour Government, 2017–2023

In New Zealand's election held during the pandemic in October 2020, Labour achieved a record-setting 50 per cent of the party vote. This had allowed Jacinda Ardern to form the first single-party majority government since 1996. By the time of her resignation in January 2023, however, opinion polls were showing Labour behind the centre-right National Party by 6 or 7 percentage points. In the October 2023 election, National won.

What had gone so wrong for Labour?

Background

New Zealand is a unitary state with a unicameral parliament. Since the 1996 election, it's used mixed-member proportional representation (MMP), comparable to Germany's federal electoral system. There have been six Labour or Labour-led coalition governments to date.

Ardern’s political career had begun solidly in the Third Way era and she described herself as a social democrat, but not a radical. She rose quickly through the ranks while in opposition. Her run to become prime minister—at the age of 37—attracted global media attention. She brought a new tone to politics, emphasising kindness and compassion, espousing sound social and environmental values with a special concern for ending child poverty. At the 2017 election, however, National won more seats than Labour. A Labour–New Zealand First coalition was formed nonetheless, with support from the Greens.

Ardern’s reputation for exemplary leadership was soon firmly established following a terrorist attack in Christchurch in 2019. Her empathetic response united the country. A Wellbeing Budget in 2019 raised mental health and child-poverty as priorities.

When Covid-19 arrived in 2020, Ardern led one of the strictest lockdowns in the world. In the election that year, Labour won 50 per cent of the party vote—the most ever for one party under the MMP system. Trust in Ardern and approval of the Covid-19 response were the main factors.

The economy

In the pandemic, saving lives was prioritised above the economy. Ardern believed that a hard lockdown in the short term would mean that economic recovery would follow.

A strong fiscal stimulus was needed to preserve jobs and support struggling businesses, but the borrowing and spending had an inflationary effect. This was exacerbated by the global context. As the pandemic receded in political salience, the ‘cost of living’ became the most prominent issue. Economic stagnation plus inflation contributed significantly to Labour's defeat in 2023. Moreover, Labour launched a programme in 2018 to build affordable homes, but by 2023, only a tiny fraction had actually been built.

Covid-19

Public support for the pandemic response declined, and social fissures had grown that have not entirely been repaired. Managed isolation and quarantine were seen as inefficient and unfair. Labour's polling declined steadily in part because the party didn't pivot away from being the Covid-19 ‘saviour’.

In November 2021, the National Party had chosen a new leader, Christopher Luxon, and in the following year, National moved ahead of Labour in the polls. In early 2022, more people were saying that the country was heading in the wrong direction than in the right direction. It made political sense, then, for Ardern to step aside.

Misusing the majority

When Labour gained a one-party majority in 2020, people questioned whether they'd use that power wisely. Indeed, a proposed social unemployment insurance scheme (SUI) based on the Nordic model was planned behind closed doors. It was an income-replacement insurance which was developed with little consultation or deliberation. The business-friendly parties of the right saw it as just another tax. Welfare advocates argued that the government should be focussing instead on reducing child poverty and inequality. The proposal was shelved after Chris Hipkins took over from Ardern as Labour leader.

Another policy was to ‘reform New Zealand's drinking water and waste water system and upgrade water infrastructure’. This was uncontroversial in election debates. Quite unnecessarily, the Labour government turned its ‘Three Waters’ proposal into the most disliked of all its policies. It would have seized locally owned infrastructure assets and vested them in four proposed water services entities, and brought in a co-governance model for the proposed entities.

In the New Zealand context, ‘co-governance’ refers to a partnership model that shares power equally between representatives of central or local government and of indigenous tribes. Control over waterways has been an ongoing concern for indigenous rights under the 1840 Treaty of Waitangi. The political backlash against co-governance in general—and against Three Waters in particular—was in part racist. But it was also founded on a democratic principle whereby citizens gain office on grounds of merit rather than ethnicity or ancestry. Calling those who opposed co-governance ‘racists’ didn't entice voters back to Labour.

Moreover, a document entitled He Puapua (the wave break) proposing constitutional changes was leaked by opposition parties in early 2021. The wider public wasn't ready for co-governance to be used throughout the apparatuses of the state.

Political misfortunes

If we evaluate a past government by achievements that outlive it, then the Ardern government failed: it made no enduring public policy reforms. The centre-right won in 2023 on promises to repeal Labour's reforms. Rather than blame ignorant misogynists and racists for their defeat, Labour now needs to return to basics. The long-term political problem for Labour is that it now looks like the party of taxes and the party of diversity and inclusion, rather than the party of prosperity and security for all.

Conclusion

What, then, were the lessons? People soon forget how well a government has dealt with a national emergency, so be ready to pivot when the recovery phase comes. On its own, restructuring is not a solution to a public policy problem: structure follows strategy. And, if a left-wing party wants to achieve far-reaching aims, then wide public support must be built up in advance, so that ‘progressive’ or even ‘radical’ starts to look like ‘common sense’. Reforms should become so widely accepted that opposing parties are obliged to leave them in place once it's their turn in office. Don't take a parliamentary majority as a mandate, or as an opportunity, to make changes that are known to be unpopular—or progress will be short-lived and soon reversed. Be honest with working and retired people about the problems they face and about what a centre-left government can (and what it can't) do for them. Transformative social change takes time, so long-term ambitions need to be communicated and supported through medium-term achievements. The vision for a fairer and cohesive society must be backed by the hard and detailed work that builds political trust.