National’s well-placed lob

Even left-wing pundit Martyn Bradbury made complimentary comments about National leader Christopher Luxon’s State of the Nation speech.

Mr Bradbury, scathing of most of Sunday’s address as is to be expected, called it "the least worst speech of Mr Luxon’s career".

National has had a difficult start to 2023.

From emerging into the New Year in pole position with Act New Zealand, the change of Labour leadership pushed it back on the grid. Chris Hipkins was able to ditch parts of Labour’s plans and freshen its image.

The northern floods then consumed the limelight, and Mr Hipkins’ crisis management response was satisfactory. Mr Luxon’s speech sensibly was postponed twice before being presented two days ago.

It has now received clearer air, and the key policy was a clever play into traditional Labour territory.

Politics is so much about perception, and Labour — with the likes of the landlord tax proposal and possible tax cuts — will continue to attempt to paint National as the friend of the rich and privileged.

Yet, Mr Luxon announced a plan specifically targeting middle and lower-income families.

The Family Boost child-care tax rebate will help 130,000 such families, Mr Luxon said.

Those earning up to $140,000 would receive a $75-a-week rebate on early childhood expenses. This would reduce in stages to zero at $180,000.

Christopher Luxon gives a "State of the Nation" speech in Auckland on Sunday March 5, 2023. PHOTO...
Christopher Luxon gives a "State of the Nation" speech in Auckland on Sunday March 5, 2023. PHOTO: RNZ
Clearly, this is targeted and does not match any narrative about helping rich mates.

At the same time, the policy can encourage mothers back into the workforce, perhaps a pro-feminist matter, even if Mr Luxon declined to use the word "feminist" when pushed.

As one commentator noted, the childcare part of the speech could easily have been uttered by the other Chris, Mr Hipkins.

As it is, former prime minister Jacinda Ardern’s child-care subsidy announcement of last November – at $189 million over four years – is dwarfed by Mr Luxon’s, almost $1 billion over the same period.

Mr Luxon, in answering the obvious question about where the money would come from, pressed a populist button by laying into the amount spent on consultants by the Government, now up to an extraordinary $1.7 billion a year.

Savings of $400 million annually would be expected, well exceeding the $249 million cost of the child-care tax rebates.

With the four big consulting firms creaming big profits, and $250 an hour or $9000 a week charge-out rates in some cases, National is endeavouring to be seen on the side of "ordinary" New Zealanders.

Claims about savings and efficiencies in the public service, from reorganisations or from the use of consultants should be treated with scepticism.

It is what politicians will generally assert.

Nevertheless, consultant costs have soared.

Some of the savings could come relatively easily because more conservative National will have less ambitious programmes, mostly, than Labour.

Labour is again awkwardly placed.

It was under the other Chris, Mr Hipkins, as Public Service Minister in 2018 that attempts were to be made to stop the growth of consultants which had taken place under John Key’s National Government.

Although the cap on public-servant numbers was lifted, consultant costs climbed further and rapidly. Since 2008-09, spending on consultants has (adjusted for inflation) increased more than fourfold.

There are fears that increased rebates will simply encourage early childhood centres to increase prices. Mr Luxon’s argument is that competition in the sector will ameliorate this.

National has shrewdly lobbed a tricky ball into the corner of Labour’s court. It has targeted the "squeezed middle" with ongoing "cost-of-living" assistance, it can claim the move is not inflationary because of spending cuts and no tears will be shed over the target of those cuts.

Its child-care policy can even be seen as progressive, while also fitting in with National’s claimed philosophy of self-reliance and empowerment through work.