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Dunne: It’s getting real for the Govt and Ardern

Policy achievement seems to run a distant second to colour in politics these days but, despite that, the Government and Jacinda Ardern cannot ignore some difficult decisions ahead, writes Peter Dunne.

When Parliament resumes in a couple of weeks the Prime Minister may well be reflecting wistfully on her time in Davos and the adulation she received for saying nothing of substance, but smiling ever so sweetly as she did so.

Helen Clark was correct in her assessment that so much of the Prime Minister's international appeal is the difference she cuts between her and other leaders. She is young, enthusiastic, and radiant - not the glowering bully of the United States President, nor the stubborn grimness of the British Prime Minister.

In a world of political grayness, she is a bright spark of colour, but the sad thing is that seems to be all that matters these days. Policy achievement seems to run a distant second to the new show business of contemporary politics.

The Prime Minister is not the first New Zealand leader to have been admired on the world stage, or to have found its lure attractive. Most have taken it in their stride, although one or two have let it go to their heads.

Walter Nash was an inveterate international traveller as Prime Minister, practising what he saw as international "summitry", but generally treated as a nice old man from the colonies, while David Lange found the international stage fitted so well that he quickly lost interest in and control of what his government was up to domestically, with disastrous results when he realised, and tried to reassert his authority. For his part, Sir Robert Muldoon saw himself as a potential international economic saviour  through his promotion of a reformed Bretton Woods agreement, a course few others seemed interested in following.

So when the Prime Minister flops back into her comfortable green leather seat in the debating chamber when Parliament resumes, it will be perfectly understandable if her mind starts to drift back to the excitement of Davos, rather than the comparative drudgery of how to rescue the rapidly crumbling Kiwibuild programme, what to do with the recommendations of the Tax Working Group, or how to balance the mounting calls from China and the United States to take one side or the other in their ongoing tussle for dominance.

All will require difficult decisions - something this Government has hitherto run a mile from, preferring instead the comfort blanket of another review group.

Given that Labour has been talking about Kiwibuild for the last two, if not three, election campaigns, it is a mystery bordering on a scandal that when it did come to office it seemed to have little idea how to implement it.

Much of what this Government has been about so far is scene setting, painting a picture of the positive future it has in mind for the country. That is a laudable and sensible approach, but the problem is that as the midpoint of its term nears, there are as yet not too many visible, specific examples of this positive future in effect, and with the next election only the end  of next year away, time is beginning to run out.

That is what makes the omnishambles of the flagship Kiwbuild  programme all the more spectacular and politically serious.

The dramatic failure to come anywhere near previously expressed target levels for Kiwibuild houses risks becoming a metaphor for the entire Government programme across all portfolios.

Given that Labour has been talking about Kiwibuild for the last two, if not three, election campaigns, it is a mystery bordering on a scandal that when it did come to office it seemed to have little idea how to implement it.

It is all very well blaming officials, or in the ridiculous case of the National Party support partners who would not allow it to tear up the Resource Management Act, because the reality is the failure lies fairly and squarely on the shoulders of the Minister who was Kiwibuild's architect and champion for so long in Opposition that one might have been forgiven for assuming he had some idea of what he was talking about. For the sake of her government's credibility, not to mention the thousands of young families who saw Kiwibuild as a potential answer to their housing concerns, but are now becoming disillusioned, the Prime Minister needs to ensure her government averts this mounting disaster - and quickly - before it engulfs them.

If the Minister is not up to the task, an increasingly likely proposition, he needs to be replaced by someone who is. Equally, if he magically reveals how he can now do the job, he needs to be given every support to get on with it. Either way, the Prime Minister faces tough decisions, far removed from the unreality of Davos.

The report of the Tax Working Group is due imminently, with much focus likely on how it addresses the capital gains tax question. Remember, it was Labour's policy at the last two elections to introduce a capital gains tax, but during the last campaign, the Prime Minister kicked the issue to touch when the heat started to rise, by promising a review, with no changes due before 2021. Well, now the review is over and its report eagerly awaited.

The review head, Sir Michael Cullen, has always favoured a capital gains tax and was only stopped from introducing one during the last Labour-led government by coalition politics and an obstinately negative Revenue Minister. So, it is a reasonable bet, that now freed of such constraints, Sir Michael will seek to achieve his ambition this time.

Either way, that poses a problem for the government.

Acquiescing to Sir Michael's wishes will leave many people feeling cynical that the whole review process was merely a cover for implementing Labour's intended policy anyway, and will leave the government going to the next election having to campaign for a looming capital gains tax, to the relish of the National Party. Rejecting any such recommendation, will leave the Government with nothing, unless skillful and tough political leadership can negotiate a shrewd and acceptable compromise, which seems unlikely.

And then there is the matter of the mounting tension between China and the United States.

Both are important to New Zealand which is why we have so far prudently avoided taking obvious sides in the growing argument. However, there are strong signs that we may not be able to do so for much longer. China has already made clear its displeasure at the GCSB's decision to exclude Huawei from the 5G upgrade process, with there being strong suggestions that the Prime Minister's long-heralded visit to China was not just delayed, but deferred indefinitely (in other words, cancelled) by the Chinese as a consequence.

China is hugely important to New Zealand as a trading partner so maintaining and enhancing that is equally important for our growth and prosperity, something the Chinese understand all too well. But now, pressure is also coming from our Five Eyes intelligence partner, the United States, to back it over China, so the luxury of not taking sides may not last much longer. The United States already sees New Zealand as somewhat flaky in terms of Five Eyes, and in the volatile environment the President has established, escalating this perception will not be to our advantage in terms of the wider relationship.

The realpolitik of having to deal with these situations, let alone the likely teachers' strikes, the ongoing junior doctors' dispute, and a range of other day to day problems, are a world away from the acclaim of Davos. But it will be how she responds to these issues, and the level of leadership she shows, that will determine the Prime Minister's standing with New Zealand voters as 2019 unfolds.

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