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One year in: the fault lines ahead

One year ago, Jacinda Ardern and her ministers were sworn into office, with the Prime Minister pledging to form an “active” government.

The first anniversary has provided a chance for Ardern and her team to look back on their successes and failures so far - but what challenges lay in wait for them before the next election?

Here are some of the fault lines the Government may need to navigate if it is to hold onto power in 2020:

Doing justice to reform plans

The Government’s plans to shake up the criminal justice system loom as perhaps its highest-risk, highest-reward reforms.

If Justice Minister Andrew Little and Corrections Minister Kelvin Davis succeed, the prison population will be reduced by 30 percent within a decade, addressing what Bill English once called the “moral and fiscal failure” of prisons.

However, National’s cries of the coalition being “soft on crime” provide a taste of its likely campaign against any firm proposals for reform, as well as the outcry which may result from any crimes following law changes (no matter their merit on balance).

Justice Minister Andrew Little has already made a couple of missteps in the push for meaningful reform. Photo: Lynn Grieveson.

There have already been a number of missteps: Little was forced to shelve a repeal of the three-strikes law after an intervention from New Zealand First, while he was also on the back foot over victims’ complaints about being shut out of the justice summit (he promised another, victim-centric conference at a later date).

Changes to New Zealand’s drug laws are another area where intra-coalition politics and public sentiment may hit hard, with Ardern under pressure over growing numbers of deaths from synthetic cannabis.

Does the Government have the care and patience needed to shepherd through reforms which will take far longer to take effect than it would hope for, or will it lose its nerve?

Waterfall of working groups

National’s gleeful mockery of the coalition’s working group fixation seemed a little insincere at the start, given the party was not averse to the odd policy review and panel during its first term.

However, there is a kernel of truth in that the Government is now waiting on the results of numerous inquiries into some critical policy areas, some of which will not report back until just before the next election, until it takes action.

As the reports and recommendations trickle in, the potential bill for implementing all that is asked for will slowly mount up.

Keeping people happy [with working groups] while making cold-hearted budget decisions will not be easy, doubly so with the budget responsibility rules in place.

Nobody would expect the Government to agree on everything that is put before it, but there will be fierce competition amongst the various sectors (and possibly ministers) for their proposals to take priority.

Keeping people happy while making cold-hearted budget decisions will not be easy, doubly so with the budget responsibility rules in place (although whether they will still be there after the next election is an open question).

A taxing issue

Part of that proliferation of working groups, but worthy of mention in its own right, is the Government’s Tax Working Group - a political slow-burner that could divide the coalition right up to the next election.

Chaired by former finance minister Michael Cullen, it will present its final report on the future of New Zealand’s tax system next February.

However, the Government has committed to putting any recommendations from the group to the electorate in 2020, meaning any changes would not be implemented until at least April 2021.

The sticking point is the issue of a capital gains tax. Robertson has made it clear to the group that he would like to see one of the two proposed taxes on capital income included in the final report and it's highly likely he will take such a tax to the 2020 election.

Sir Michael Cullen's Tax Working Group is a slow-burner that could divide the coalition by the next election. Photo: Lynn Grieveson

This could be controversial, with the Greens in favour of a more traditional, broad-based capital gains tax on everything but the family home, but New Zealand First holding a long-standing opposition to capital gains taxes. Such a tax would will likely see older Kiwis pay more, something that won’t go down well amongst New Zealand First’s key constituency.

The Tax Working Group has helped Robertson in this regard. By reframing capital gains taxes as another form of income tax, it has reframed the debate as being fundamentally about fairness: why should some forms of income be taxed and not others?

It’s an argument that might just appeal to Peters.

The next tier of talent

Despite losing Clare Curran and Meka Whaitiri from the executive due to separate scandals, Ardern has refrained from a ministerial reshuffle so far.

That seems likely to change sooner rather than later: John Key had a tendency to announce his changes either side of Christmas, and Ardern may find it convenient to do the same, allowing new ministers to get to grips with their portfolios with some distance from Parliament’s so-called “bearpit”.

Exactly who can fill the gaps left by Curran and Whaitiri is a more difficult question to answer.

Kiri Allan has been talked about as a first-term Labour MP with ministerial potential - but will Jacinda Ardern want to throw any newbies into Parliament's "bearpit" so soon? Photo: Lynn Grieveson.

Labour’s somewhat unexpected rise to power means the shelf is somewhat bare when it comes to top talent, with any heavy hitters capable of parachuting into the executive likely deterred by the party’s abominable polling under former leader Andrew Little.

There are first-term MPs with potential - Kiri Allan and Deborah Russell are two names frequently mentioned - but with Whaitiri’s dismissal for manhandling a staff member raising issues about the training and support provided to new ministers, Ardern may be loath to throw newbies into the pressure cooker.

Then there is the issue of gender balance: Ardern was already disappointed with the low number of female ministers, and she is now down to eight women out of 26 ministers (and five out of 19 for Labour).

Ardern will need some of her first-term MPs to show they are up to the job, and have the party attract some high-fliers before 2020, so she has options up her sleeve if and when she needs them.

Managing relationships

National’s battle with Jami-Lee Ross has taken some of the heat off the coalition’s own relationships, but it wasn’t so long ago that Ardern was being questioned over her sudden aversion to the term “Labour-led Government”.

But the fundamental challenges in managing a three-headed coalition - not unique to this Government, of course, but perhaps exacerbated by the size and ideologies of the different members - have not disappeared.

Take the Prime Minister’s attendance this week at a caucus planning day for the Greens, the party which has suffered most from the perception that it is swallowing more dead rats than is healthy for its first time in government.

Managing the relationship with Winston Peters and New Zealand First, as well as the Greens, is critical for Jacinda Ardern. Photo: Lynn Grieveson.

Then there was New Zealand First, on the back rather than the front foot for once regarding an ad-hoc policy change when Ardern declared there would be no regional fuel taxes outside of Auckland while she was Prime Minister.

While there is dispute over whether ministers already knew about the decision, it shows the difficulties than can arise if there is not clear communication within the coalition.

As we creep closer to the next election, it’s likely the “junior” partners will look for more opportunities to distinguish themselves from Labour to avoid the fate that has fallen most minor parties before them upon grasping the baubles of power.

Giving them the breathing space they need, while maintaining collective responsibility, will be the key to avoiding a falling out closer to 2020.

Climate change

It’s one thing to call climate change the nuclear moment of our generation, it’s another to do something about it.

The Government had a chance to send a strong message about its green credentials earlier this month when a new IPCC report warned that drastic changes are needed to keep the world from catastrophic warming. Instead, Ardern gave a post-Cabinet tongue-lashing about New Zealanders being fleeced at the petrol pump. And while last year the Government released advice about sea level rise, councils appear reluctant to embrace it.

Climate Change Minister, and Green co-leader, James Shaw said the IPCC report was broadly in line with the Government’s direction on climate change. But talk, as they say, is cheap.

There have been some climate-related policy changes, including a ban on new oil and gas permits and the establishment of a $100 million green investment fund. Also in the wings are a Zero Carbon Bill, emissions trading scheme changes and the creation of a Climate Change Commission.

The opposition won’t be pushing the Government to go harder on climate change. And there might be some political calculus that a left-leaning, environmental voter has no other natural home. The biggest pressure on the Government is its own rhetoric. Those disappointed by the environmental record of Helen Clark’s Labour-led coalition will be looking to the Green Party to push the Government into taking stronger, tangible steps.

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