The recent election results in New Zealand illustrate the clear divisions between the parties on economic issues, the environment, indigenous rights, and how open the economy should be. The centre-right, three-party coalition between National Party, Act Party, and New Zealand First will need to cross these divisions if it is to be successful. 

The 2023 New Zealand General Election resulted in the governing Labour Party losing power; with its share of the party vote almost halving to 26.91 percent, down from 50.0 percent in 2020. In contrast, the centre-right National Party’s share of the party vote increased by 12.51 percent to 38.1 percent. The right-wing Act party increased its support to 8.64 percent while winning a second affluent urban electorate off National. The nationalist and socially conservative New Zealand First Party returned to parliament with 6.08 percent of the vote and the Green Party’s share of the vote increased by 3.74 percent to a record 11.6 percent. The Greens also won two traditionally Labour electorates while retaining Auckland Central. Te Pati Māori went from two to six seats in Parliament, with Labour retaining only one Māori electorate. The 2023 election therefore saw the minor parties make strong gains.

Labour had decisively won the 2020 election after a strong response to Covid-19 that had seen New Zealand’s borders close; Labour politicians appear daily on television; and emergency policies that protected employers and workers, and, by cutting interest rates, further boosted house prices. Labour also benefitted from disunity within National.

However, election data did not show that the electorate favoured more left-wing policies. After the 2020 election, Labour faced economic challenges resulting from high inflation and lower economic output while lockdowns had also disrupted educational and health services. Further lockdowns, particularly for Auckland between August and December 2021, eroded Labour’s support.

Labour made progress after the 2020 election on some traditional left-wing objectives, such as reducing interest deductibility for landlords, increasing taxation of capital gains on investment properties, building more social housing, boosting the minimum wage, improving public sector pay, and increasing the top marginal tax rate. Imprisonment rates were also substantially reduced. However, promises to make tertiary education more affordable had been dropped, while in other areas progress remained slow. Tunnelled light-rail for Auckland was investigated to avoid removing carparking, despite surface options being much cheaper and preferred by potential users. Legislation facilitating urban intensification resulted in a negative response from residents’ associations, and almost no progress because councils exploited loopholes. The 2022 Council elections saw authoritarian right-wing mayors focussed on lower spending and opposition to cycleways and urban intensification elected in Auckland, Christchurch, and Dunedin. Centralised management of Polytechs, hospitals, and water infrastructure promised long-term benefits, but was controversial.

After Labour’s leader Jacinda Ardern stood down in February 2023, stating that she wanted to spend more time with her partner and daughter, Labour chose fellow moderate Chris Hipkins as their leader. Hipkins quickly announced that several policies, including measures to protect the environment, would be delayed or abandoned in favour of a cost-of-living package that increased benefits and superannuation payments. The 2023 budget also saw prescription fees scrapped, more spending on early childhood education, and cheaper public transport. However, to the dismay of Labour’s Finance and Revenue ministers and many core supporters, wealth and comprehensive capital gains taxes were ruled out. Falling tertiary enrolments also resulted in universities announcing redundancies. High profile departures of ministers dented Labour’s reputation, while voters perceived Labour’s execution as poor.

At the 2023 election, Labour campaigned on new policies of free dental care for those under 30 and removing sales tax from fruit and vegetables, along with its existing policies of expanding early childhood education provision, boosting support for families, more police, and more apprentices. National focussed on lower inflation, growing the economy, more roads and fewer speed restrictions, tougher law and order, requiring schools to concentrate on core subjects, increasing spending on cancer treatments and medical school places, and letting councils opt out of urban intensification. Policies for its right-wing supporters included a smaller public sector, lower welfare spending, policies that favoured landlords, and making it easier to dismiss workers. Act prioritised law and order, free markets, business incentives, individual freedom, and welfare reform, together with equality policies that downplayed multiculturalism and indigenous rights. New Zealand First campaigned on opposing “woke” multicultural policies, law and order, nationalism and support for primary industries, the elderly, and blue-collar workers. The Green Party focussed on the environment and sustainability, welfare state expansion, indigenous rights, education, and justice system reform. Te Pati Māori had a very strong focus on indigenous rights, but also supported expanding social services, reducing inequality, and environmental protection. A clear division between parties on left-right economic issues, the environment, indigenous rights, and how open the economy should be was therefore evident.

During the election campaign Labour pinned its hopes on Hipkins’s strong debating skills, a barrage of negative ads, and mobilising core Labour supporters. However, Labour’s policies were incoherent at times – a controversial fuel tax reduction from March 2022 to July 2023 to address cost of living pressures was followed by planned increases in fuel tax to pay for new roads. Similarly, Labour’s promise to remove sales tax on fruit and vegetables was a reversal of its traditional opposition to tax exemptions. Turnout was down, particularly in Labour strongholds in south and west Auckland.

National was looking to form a government with Act, but strong campaigning by New Zealand First meant that National’s leader, Christopher Luxon, had to sign coalition agreements on 24 November with both parties. National’s policies were largely agreed to. However, National agreed to support Act and New Zealand First policies that reduced restrictions on smoking and firearms, and considerably reduced biculturalism and policies to help Māori. Act ensured a new medical school and electric vehicle infrastructure were subject to cost benefit analysis, while the scope of reviews of government regulations was widened. New Zealand First forced National to abandon its policy to allow foreign buyers to purchase New Zealand houses, got regional infrastructure funding, and reviews of competition in the banking and grocery industries and of tax avoidance. Other concessions New Zealand First received were a commitment to minimum wage increases; ensuring immigration did not displace New Zealand workers; and keeping the age for universal superannuation, which Act had wanted increased, at 65. The leaders of Act and New Zealand First will each be deputy prime minister for 18 months.

Labour reconfirmed Chris Hipkins as its leader following the election, with many MPs feeling that his strong campaigning skills will be an asset if National fails to deliver on its promises and as policies that affect Labour supporters come into effect. Hipkins promptly announced that a capital gains tax and wealth tax will be reconsidered, with many party members believing that focussing on centrist voters, rather than the working-class, had been a mistake. Labour may potentially benefit from National pushing ahead with policies, such as congestion charging that received little publicity during the campaign. The coalition government’s extensive suburbia and strongly pro-motorist and pro-landlord policies may help mobilise support for the Green Party. Similarly, the coalition’s commitments to less use of the Māori language and fewer policies to help Māori are likely to work to the advantage of Te Pati Māori. If the opposition parties can mobilise their supporters and attract centrist voters they may be a strong threat to the governing parties at New Zealand’s next election.

Matthew Gibbons is a post-doctoral researcher in the Politics and International Relations Programme at Victoria University of Wellington. He has a PhD from the University of Waikato.

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