Previewing 2018: Labour

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The summer break couldn't have come at a better time for Prime Minister Jacinda Ardern and the Labour Party. Their performance over their first two months in government didn't set the world alight. For every step forward that the government made, there also seemed to be a step backwards.

In many respects, the end of year political polls which showed no major change in support since the election would have come as a relief for the parties of government, despite the norm for these polls being a significant boost in support for them.

The challenge for 2018 for Labour is to hit the ground running. With Bill English and National having already locked in the opposition's State of the Nation speech for late January, Labour will no doubt be lining theirs up already. Previously this speech has been used by the government to both set their agenda for the year ahead, and to announce some sort of spending package or policy.

The problem for the government is that as indicated by the half year economic and fiscal update, there isn't much headroom for new policies outside of those already outlined in coalition and confidence and supply agreements. 

My suspicion is that in Prime Minister Ardern's State of the Nation we might see some firmer details announced about the $1 billion Regional Development (Provincial Growth) Fund, such as the criteria and types of projects that will be considered by Cabinet. Another option would be the formal setting up of the Green Party's flagship Green Investment Fund.

It's important that for Labour to find some positive initiatives to highlight, because they're also in for some pain in the first half of the year too. With legislation banning foreign buyers already before the House, and the Appeasement of Winston Peters (Anti-Waka Jumping) Bill - not actually it's name, but it may as well be - also to be introduced, Labour will both take heat and be forced to expend some political capital to manage the process.

Prime Minister Ardern will also have some potential tests of her leadership ahead. Clare Curran appears to be a disaster waiting to happen based off her poor performances in late 2017 while Willie Jackson didn't appear to do prep work before taking questions in the House. Kelvin Davis may have struggled badly when filling in for the Prime Minister. Davis, but at least in his case has shown he's a strong performer, especially in his own portfolios. Ardern will also be expecting much better management of the government's activities in the House from Chris Hipkins to avoid any more embarrassing process stories.

There's also some economic uncertainty on the horizon too, with the housing market appearing to plateau, business confidence dropping, and projections of global growth trending lower too. On the first two of these, it's important to keep in mind that the Clark government faced similar issues leading to the "winter of discontent" that saw them savaged in the polls. It prompted them to take a much more proactive approach to their relationship with business and, coupled with an upswing in the economy, saw things improve markedly by the 2002 election.

In terms of their partners in government - New Zealand First and the Green Party - there's a possibility, as there always is, that Ardern will need to discipline or sack a misbehaving or incompetent minister which will test those relationships. That aside, I wouldn't expect any major issues unless, in the case of New Zealand First, the issue is with Winston Peters then all cards are off the table.

What will be interesting is how Labour keeps the momentum of the government going after Budget 2018. The first half of the year largely writes itself. The Prime Minister's State of the Nation and any associated announcement sets the tone for February, March and April are usually focused around promoting polices that can into effect from 1 April each year. From late April until the Budget in late May, the government can usually set the agenda each week with pre-Budget announcements. Then June is spent promoting any announcements from the Budget as much as possible before politicians, and the press gallery, catch a breather in July.

How the Labour-led government, with it's relatively green staff beyond Heather Simpson and Mike Munro - deal with this will be worth watching. KiwiBuild might offer some respite if and when it gets underway. And it won't be the end of the government's popularity if they're flatfooted in the second half of the year. But after an indifferent start to their term in 2017, a poor second half to 2018 could frame the second half of their term in a less than ideal light.