Labour seeks to capitalise on trust rules controversy

Andrew Little.
Andrew Little.
In another era, Labour's poll dive this week would have sent the party into a spin.

A whispering frenzy would have ensued about Andrew Little, who is the fifth Labour leader to hold the office to National's one.

He should be more aggressive, some would have said.

He should be less aggressive.

He should go for John Key's jugular.

He should avoid personal attacks on Mr Key.

He should get rid of that lefty schemer Matt McCarten.

He should bring back that Australian strategist Mike Richards to put a bomb under everyone.

We need to cover our left flank.

We need to move to the centre.

What do we stand for?

Where are we going?

All these conversations took place this week but among the media, tweeters and observers, not in the Labour caucus.

The caucus was disappointed at the poll but it was not spooked.

At the Distinction Hotel in Dunedin, at a pre-planned caucus retreat, a sobering discussion took place about the drop of four points in the party vote to 28% and Mr Little's steady decline in personal ratings to 7%.

Mr Little accepted responsibility but so did other members of the caucus collectively, as they should.

Their mix of personal ambition, factional behaviour and short-termism led to the steady turnover of leaders and a sense that the party puts its own interests first.

It was that that did the damage, not the individual leaders.

Little is the best leader the party has had since Helen Clark because he has controlled the factions.

He does that by not recognising them - of course it helps that the right faction (they prefer to be called moderates or pragmatists) is shrinking in number; Clayton Cosgrove will be the next to exit.

Mr Little will stay leader until the next election, of that there is no doubt.

If he is not prime minister after the 2017 election, it will be Grant Robertson and Jacinda Ardern's turn.

But until then, the caucus will remain loyal in a way they weren't to former leaders Phil Goff, David Shearer and David Cunliffe.

Not that they didn't have failings. Mr Goff was too soon after government; Mr Shearer was too inexperienced; and David Cunliffe was just too David Cunliffe.

To put it in perspective, the 28% in TV One's poll this week is exactly what they got two elections ago, under Mr Goff, but it is better than the 25% they got at the last election under Mr Cunliffe.

The poll results are a reflection of the long-running identity crisis and Mr Little's recent exacerbation of it.

The party that began TPP under Miss Clark rejected the done deal then tried to be the farmers' best friend.

The party seeks respectability in the business community but contemplates a return to Muldoonist regulation of interest rates.

It wants to be the party to target inequality but toys with the idea of giving the rich and poor the same universal basic income.

Mr Little, however, has not let the poll dent his confidence. On the contrary, he has used it as a licence to exercise more power.

The quickest way to deal with Labour's identity problems over policy is to forget the policy and make it about the leader.

So at the Distinction Hotel, he was mandated by colleagues to rely on his own judgement more, to be bolder and make an impact, instead of trying to achieve consensus within the party.

That approach was in action this week with Mr Little's extraordinary attack on John Key's so-called moral compass - according to Mr Little, he doesn't have one - in the wake of the Panama papers.

Establishing a negative impression of Mr Key is everything; nuance is non-existent and facts are a luxury in this new clobbering approach of Mr Little's.

Labour is not bothered that Mr Key has no foreign trust, that there is no evidence of any unethical behaviour by Mr Key or his lawyer.

It is apparently enough that he was a currency trader, that he is wealthy, that he waited for a week before ordering an inquiry into the 12,000 foreign trusts in New Zealand, in order to cast him as the Prime Minister only for the privileged and greedy end of town and a person of "no moral compass''.

Mr Key's instinctive defence of New Zealand's reputation over foreign trust law (ipso facto, the dodgy dealers who use them) was a move Labour will seek to exploit for weeks and months to come. But it is not without risk, which was illustrated neatly in a perceptive tweet by comedian Guy Williams this week: "The opposition is always desperately trying to find a John Key scandal! How about we think up good policy and attack on issues.''

Labour risks looking desperate, and coming worse off than 28%.

If Mr Little's attacks fail to ring true, the public will stop listening on other issues.

On his side is the fact that trusts are deeply mistrusted, and not just the tax-dodging ones here with foreign settlers.

Yes, they can be benign and convenient vehicles to establish, for example, a tertiary education fund for children.

But they have been used as vehicles to shelter income and assets for tax purposes to access, for example, Working for Families or to reduce matrimonial property settlement obligations.

Their disclosure rules are so loose that the Law Commission can't actually say how many there are in New Zealand - between 300,000 and 500,000, it estimates.

Labour's primary aim, however, is not to get better disclosure rules to the trust laws, laws it introduced in government, but to associate Mr Key with a reluctance to change them.

And if Mr Key gives him an inch, Mr Little will try to clobber him a mile even if he damages himself in the process.

With about 18 months to go before his only shot at power, Mr Little is willing to take that risk.

Audrey Young is political editor of The New Zealand Herald.

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