New Zealand votes in a narrow election dominated by economic woes, cost of living crisis

By Helen Regan, CNN

New Zealand goes to the polls Saturday in a general election that’s shaping up to be a tight race between the two major parties, with the economy and a cost of living crisis dominating campaigning nine months after former prime minister Jacinda Ardern suddenly resigned.

Final polls showed the main opposition center-right National Party, led by Christopher Luxon, with a slight lead over Ardern’s successor Prime Minister Chris Hipkins but there appeared a late rise in support for his center-left Labour Party ahead of the vote, according to CNN affiliate Radio NZ.

The election takes place on the same day as Australia’s Voice referendum to recognize Indigenous Australians in the constitution and create a permanent body to allow them to speak directly to government.

In New Zealand, neither party is expected to win enough seats to form a government outright, which means nationalist NZ First party and its leader Winston Peters could potentially become kingmaker in a coalition administration.

Coalitions are the norm under New Zealand’s mixed-member proportional system, which was introduced in 1996.

The only party to win a majority of votes and govern alone in the current political system was Labour in 2020, when Ardern won a landslide second term buoyed by her success at handling the country’s coronavirus outbreak.

But Ardern announced her shock resignation in January, saying she no longer had enough fuel in the tank to contest an election, and passed the reins of her party on to Hipkins.

New Zealand Prime Minister Chris Hipkins at Parliament on July 26, in Wellington, New Zealand.

A progressive global icon, Ardern’s time in power was defined by multiple crises, including the Christchurch terrorist attack, a deadly volcanic explosion, and a global pandemic.

Overseas she became famous for being a leader unafraid to show empathy and compassion at a time when populist demagogues were coming to the fore in many other western democracies.

But back home her popularity ebbed amid a rising cost of living, housing shortages and economic anxiety. And she faced violent anti-lockdown protests in the capital Wellington, with threats made against her.

Hipkins inherited these issues which have since been compounded by a sluggish economy, an historically high inflation rate of 6% and an accounts deficit that has concerned ratings agencies.

Sophia Ha, who is from Auckland but has lived in Sydney for last five years, was an ardent supporter of Ardern but is now unsure who to vote for.

“(She) was such a great representation for younger women in politics,” Ha told CNN. “I think she’s left a huge void that would be difficult to fill, but I think New Zealand really, economically speaking, needs assistance.”

Alex Wareham, a bartender from Auckland, said she wants to see the next government take real action on the climate crisis and fix the rising cost of living, but feels the parties are split on these issues.

“Some are more willing to take on cost of living, crime, fixing the economy after Covid, and other parties are taking the climate crisis a bit more seriously. But I think climate change will be on the back burner this election. It’s looking to be a bit more of a tax election, a bit more money talking,” she told CNN.

New Zealand National Party leader Christopher Luxon speaks during a National Party campaign rally on October 10 in Wellington, New Zealand.

It’s also the first election in New Zealand following the end of strict coronavirus lockdown measures that have been a source of contention for many. The government’s “go hard and go early” approach to the pandemic saw New Zealand impose some of the world’s strictest border rules, separating families and shutting out almost all foreigners for almost two years.

It meant New Zealand suffered far fewer Covid infections and deaths compared to many countries, like the United States or United Kingdom. But many residents felt the government went too hard on its measures.

“They were damned if they did and damned if they didn’t,” said Wareham, who added that because people didn’t “have the human toll to focus on they are thinking our economy was ruined, the country was shut down.”

“It was always going to be a lose-lose for Labour, no matter which way you look at it… but it feels a National government during Covid would have done it the same way,” she said.

The big issues

All the main parties have pledged to improve the economy, provide relief for the cost of living crisis, boost jobs, and improve health and education facilities, as well as housing.

Central to National’s 100-day plan is its promise for myriad tax cuts, including cutting a regional fuel tax. It also is pledging to change the Reserve Bank’s mandate to focus on inflation, remove what it calls red tape for businesses, extend free breast cancer screenings, crack down on crime and give police greater powers to search gang members, and roll back a raft of policies implemented by Labour over the past six years.

Labour’s policies include extending free dental care to under 30s, easing rising food prices by removing the goods and services tax from fruit and vegetables, teaching financial literacy in schools and expanding free early education, and extending financial support to working families.

Hipkins, 44, was first elected to Parliament in 2008 and spearheaded the country’s Covid-19 policies in 2020. Before becoming prime minister, he was minister of education, minister of police, minister for the public service, and leader of the house.

His campaigning was briefly hampered by a positive Covid-19 diagnosis at a critical juncture just two weeks out from the election, which prevented him from being on the road for five days.

Hipkins’ main contender Luxon is a businessman and former CEO of Air New Zealand who became leader of the National Party in 2021. Before becoming leader of the opposition, Luxon, 53, was party spokesman for various government departments and a member of several select committees.

Just under 1 million people have already cast their ballot as early voting began for those overseas late last month and in New Zealand on October 2.

Voters get two votes on the ballot: one for a candidate in their local constituency and one for the party. A party needs at least 5% of the vote or a winning constituency candidate to claim a seat in parliament.

To form a government, a party or coalition needs 61 of the 120 seats in New Zealand’s single-house parliament – about 48% of the popular vote.

Official results will be announced by the election commission about three weeks after the vote.

CNN’s Angus Watson contributed reporting.

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