A painful handbrake? Or a perfect alibi?

Winston Peters has pulled the handbrake on a range of Labour and Green reforms to show wavering National voters he is their best chance to keep the status quo in a second Ardern term. Bernard Hickey asks whether she'll accept that.

Prime Minister Jacinda Ardern will have to decide soon whether she wants the second term of her Labour-led coalition to be about policy reform or simply about managing the status quo, and whether she is confident enough in Labour's popularity to propose 'transformational' policies that clash with New Zealand First's. 

She will have to decide if she is a true Labour reformer, or just a manager of the status quo, MMP-style. So far in her Prime Ministerial history, she has been able to argue that New Zealand First leader and her Deputy Prime Minister Winston Peters are a necessary and 'unplanned' inconvenience that keeps getting in the way.

Wednesday's confirmation that New Zealand First has blocked Labour's preference for a NZ Superannuation-led 'Public Public Partnership' to build a $6 billion transformational rail-led redevelopment of the Auckland isthmus is just the latest of a series of handbrake turns. 

They include: commercial rent relief for smaller retailers; a vehicle feebate scheme to encourage new electric car purchases; 90-day trials for new employees for smaller businesses; welfare reform; benefits for jobless migrants; blocking visa variations to allow out-of-work migrants to switch employers; delaying a second round of gun reforms; blocking reforms to sexual violence law reforms; stopping cameras from being rolled out on fishing boats; stopping farming's inclusion in the emissions trading scheme; tougher water quality rules; and reform of the 'three strikes' law reform.

That's not forgetting the ultimate handbrake on Labour's Capital Gains Tax reform, although some might argue Ardern purposely set up a straw man of a tax review led by an avowed opponent of a capital gains tax (former Labour Finance Minister Michael Cullen) and refused to back reform during the review -- effectively acknowledging Peters would block it anyway. The pledge never to propose a capital gains tax in her political lifetime was the cherry on top of that admission of defeat and her intentions.

Handbrake? Or alibi?

So far, the most popular politician in a generation has been able to portray a septuagenarian as a painful handbrake stopping Labour and the Greens from being transformational on issues such as capital gains tax reform, climate change and welfare reform. But that approach can only be credible for both Labour and Green supporters during a first term where the coalition agreements were a 'surprise' creation out of an unexpected election result.

But a second term with a similar mix of parties, which is what appears likely with the current polling, would not be a surprise, and she risks being seen using Peters' opposition as the 'perfect alibi' for retaining power on the grounds any Labour-led government, even one that reforms little, is better than any National-led government in the eyes of Labour and Green supporters.

Peters is running the perfect race. One-out and one-back going around the final term into the home straight, positioning himself at the shoulder of Ardern, before pulling out to separate his party from the Government in the eyes of voters with enough time before the election to make a difference without appearing too divided.

So far, it's status quo

Voters will find out in the coming months in a series of decisions by Ardern whether she is willing to accept this mix of status quo policies, or whether she has enough confidence in Labour's popularity and her own connection with voters to take a risk with substantially different policies. 

Her reaction to this week's set of 'handbrake turns' by the Government suggests she is preparing for a re-rinse of her first term, but without the apparent attempts at reform.

“That [light rail] was a policy that we campaigned on that we have worked really hard on because we believe it will make a difference to congestion issues in Auckland, but ultimately, this is a democracy, and we were unable to reach an agreement amongst the parties and so that is now where it has landed," Ardern said on Wednesday.

“Ultimately this is an MMP government. We are unable to pass policy or legislation without all parties, all three parties agreeing and I think what it actually points to is the remarkable amount we've been able to achieve through consensus," she said.

Proposing significantly different policies from New Zealand First risks creating the same dashing of supporters expectations and the impression of division in the minds of voters craving stability and a united Government. Her decisions about Labour's policy platform will show whether she believes Labour and the Greens can win on their own.

So far, Ardern is either keeping her powder dry, or baking in the current policy mix.

'Vote for us to stop change'

Peters was in his element yesterday, portraying his decision as 'common sense' winning out over poor policies from Labour and the Greens. He was speaking straight to National Party supporters in claiming power over the main party.

“Todd Muller is very unhappy because every potential scandal or loose policy that they would be able to exploit if we were not doing our job has been taken away from them. That's why they're so desperate," Peters said.

“I’m not blocking light rail or any other rail – the reality is that every programme has got to stack up, it’s got to be fiscally sound, and it’s got to work,” he said.

Even Green Co-Leader James Shaw seemed to accept that Peters would win a similar blocking role in any new government.

“We've only got a few weeks left of this Government and most of the stuff that we wanted to get through we have gotten through, you know, so I'm feeling pretty good. I mean, today, for example, you had Eugenie Sage launching the doubling of the protected area for Maui's dolphin, right. So we are doing lots of good work and we'll continue to do good work until Parliament rises," he said.

The first test of whether Ardern wants reform or the status quo will be in her decisions closer to the election on Labour's policy platform, including whether it includes welfare reform, migration reform, a wealth tax, real climate change policies and real justice law reform. 

The final test will be whether Labour engineers an electorate seat for New Zealand First to ensure any of its votes under the five percent threshold are not wasted. She can afford to wait until the last minute before giving the voters of Northland (Shane Jones) or Ohariu (Tracey Martin) a nod and a wink to bring New Zealand First across the line.

Then there can be no doubt. Winston Peters will then be the perfect alibi to argue for no real change in a second term.

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