If Labour decides a wealth or capital gains tax is needed ahead of the next election, then Chris Hipkins can’t stay on as leader
Chris Hipkins has received the endorsement of his caucus to continue in the leadership and intends to contest the 2026 election as Labour leader.
Resoundingly forced into Opposition last month, the party now plans to refresh its policy platform entirely, and Hipkins says that means taking stock and starting again with a “blank page”.
A brief conversation was had about the party’s tax policy on Tuesday, when MPs met for an all-day caucus in Upper Hutt, but Hipkins says nothing specific was decided and he didn’t agree his decision to rule out both a wealth and capital gains tax defined the election loss.
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Hipkins is also unwilling to say whether ruling them out was a mistake, but it certainly poses some difficult issues for him if he wishes to stay on as leader through into the 2026 campaign.
Bear in mind it was only in July Hipkins stated, unequivocally, "under a government I lead there will be no wealth or capital gains tax after the election".
There is, no doubt, a move within the wider party and caucus to take another look at its tax policy and live up to some of the long-held rhetoric from many of its MPs that the country deserves a fairer tax system.
There is no scenario where Hipkins can seriously sell a wealth or capital gains tax to voters in just a couple of years’ time without looking like a leader devoid of any political principles.
It would also be naïve of the remaining Labour MPs to suggest the lack of either or both taxes were what turfed it out of government.
If it had been adopted earlier on and meaningfully sold it might have added a point or two, but it was the aftermath of Covid and the shambolic instability of the Cabinet that did more damage to the party.
Hipkins is right when he says the polls started to tell a story at the end of 2021 as many, but particularly Auckland voters, began showing real contempt for then Prime Minister Jacinda Ardern and her government.
The final election result and the tidal wave of blue in previously safe red Auckland seats is all the evidence anyone needs that the country’s biggest city turned on Labour.
Then there was the disorder and disarray that came from several ministers not living up to the standards set by Cabinet, and more importantly the expectations of the voting public.
No, one, minister in the list of Meka Whaitiri, Stuart Nash, Michael Wood, or Kiri Allan, can be held responsible for the election loss but together they poked holes into an already weak executive.
Hipkins can rightly be furious at the hand he got dealt in some of those cases, given they were already problems before he took over, but that’s also just the nature of the job.
In addition to all that, the loss of six of the Māori seats paints a telling picture.
While outgoing deputy leader Kelvin Davis and Māori caucus campaign manager Willie Jackson are right that Māori voted strategically and gave their party vote to Labour and their electorate vote to Te Pāti Māori, they can’t hide from the wider message that sends.
Senior MPs and ministers, such as Davis, Nanaia Mahuta, Peeni Henare, and Rino Tirikatene contested the seats and they’ve all been told in no uncertain terms they didn’t do enough to earn the mandate for their electorate.
The vote splitting might well suggest Māori would prefer a Labour government with Te Pāti Māori at the table, but it also sends a message to those senior MPs that they weren’t the right people for the job.
That will be a tough pill to swallow and already a lot of soul-searching is going on as to whether to stay in the fight.
There will be questions, too, from those Māori who took pride in Davis holding the deputy leadership, and the decision by the Māori caucus not to put up an alternative candidate when Davis announced his plans to retire from the position.
While Jackson said it was discussed, the decision was made to endorse Carmel Sepuloni instead, which could leave some voters pondering whether the Māori caucus has any fight left in it at all.
Labour’s caucus discussion on Tuesday will be just one of many to unpack the dismal election result and try to find a way to draw a line under the things that went wrong and unite around how to best fix things.
Stability and unity are key now for both the Opposition and the formation of the incoming government.
Soon-to-be Prime Minister Christopher Luxon has stressed in the weeks since election night the need for a “stable government”.
The importance of that can’t be underestimated given Labour increasingly didn’t look like one in the months leading to the election - and as a result now finds itself out of office.
