Chris Hipkins woos business, looks to controversial reshuffle

NZ’s new PM wasted no time in moving Labour away from Jacinda Ardern’s progressive agenda but his first big test comes in next week’s reshuffle.

Chris Hipkins, New Zealand’s new Labour Prime Minister. Picture: Getty Images.

New Zealand’s new Prime Minister Chris Hipkins has wasted no time in moving the Labour Party away from the progressive agenda of former PM Jacinda Ardern, toward a more centrist, “bread and butter” program focused on curbing inflation and strengthening the economy to win over struggling households and the business community alike.

In his first post-cabinet press conference after being sworn in as the country’s 41st PM, Mr Hipkins pledged to tackle the cost of living crisis and “run a ruler” over unpopular and expensive policies.

A day later he met NZ business leaders to hear their concerns, particularly over the severe skills shortage threatening the labour market.

He has won kudos for admitting some of the government’s policies have led directly to the economic pain New Zealanders are feeling, including its immigration policy and Covid restrictions.

As his first week as PM ends, there is a will in the business community for him to succeed: Jordan Williams, executive director of the Taxpayers’ Union told The Australian business would support him if they felt listened to “and not under attack.”

David Nelson, co-founder of the public affairs firm Anacta said they were confident he would put in place an agenda “that will lead to an economic recovery that will make a real difference to the lives of everyday New Zealanders.”

However, he said, he would need to prove his government was different from Ms Ardern’s.

The rookie PM faces his first big test next week, with a cabinet reshuffle and a focus on policies – including dumping the least popular, namely the contentious Three Waters legislation for water assets reform, and the expensive merger of TVNZ and Radio NZ into a single public entity.

The most high profile minister likely to be moved is Local Government Minister Nanaia Mahuta, architect of Three Waters and its adjoined policy, co-governance with powerful Maori tribes.

Three Waters has become a lightning rod for dissent within both the party and the country and its co-governance policy is almost certainly in Mr Hipkins’ sights. As driver of that policy, Ms Mahuta is widely expected to be moved from local government, although she will probably keep her foreign affairs portfolio.

Ms Mahuta is a polarising figure in New Zealand; throughout 2022 she faced calls for her sacking for allegedly misleading Ms Ardern over the introduction of an unconstitutional entrenchment clause into the Three Waters legislation, and a conflict of interest over government contracts given to a company run by her husband, Gannin Ormsby.

Ms Ardern’s continued support for her minister despite these claims led to accusations that she was in thrall to the Maori caucus.

But as Bryce Edwards of the Democracy Project think tank puts it: “Hipkins is likely to stare down the Maori caucus.”

“Chris Hipkins has a lot more bravado, a lot more confidence to deal with internal conflict (than Ms Ardern),” Mr Edwards told The Australian. “He’s fortunate that he’s taken over at a time when the party is at a low point. He can wield that as leverage against his opponents.”

Broadcasting Minister Willie Jackson, the minister responsible for the TVNZ/RNZ merger is also likely to be moved, with that policy ditched.

Other moves within cabinet will be less controversial; Grant Robertson will remain as Finance Minister despite being linked in Kiwis’ minds with the decisions that led to current economic problems, while Mr Hipkins will have to replace himself as Police and Education minister.

Once the reshuffle is over, he will turn his fire onto National leader Christopher Luxon, who is struggling to gain traction with voters. A source close to the Labour Party said: “When Ardern went we thought Labour was dogs’ tucker. Now it’s all beginning to look like a smart move.”