Chris Hipkins and Christopher Luxon were tied – then came the minimum wage clanger
As the first segment of the NZ Herald leaders’ debate drew to a close, National leader Christopher Luxon will have felt justifiably relieved.
He’d survived several challenging questions on leadership and truth telling in politics – difficult territory for a leader with approval ratings as low as Luxon’s. With Labour leader Chris Hipkins a more experienced debater and polling showing a mood for change, Luxon goes into each debate at a slight disadvantage. He must have been pleased that one segment down, he was holding his own; in fact, his sunny disposition (always a given with Luxon) contrasted well with Hipkins’ often frowny demeanour.
But that all changed after the first question of the next segment. Moderator Ryan Bridge asked for a pledge to lift the minimum wage at the rate of inflation. Hipkins said he would and Luxon said the same, adding it was “more or less what we’ve been doing”.
Luxon walked into that one. Hipkins quickly jumped in to remind Luxon that not once had the coalition lifted the minimum wage at the rate of inflation.
The minimum wage is reviewed annually. The coalition has had three opportunities to lift the minimum wage and three times it has opted to lift it by less than the rate of inflation. How did Luxon not know this? Each below-inflation increase has been prosecuted by Labour in Parliament and the media.
Act, in 2023, campaigned on freezing the minimum wage for three years (a policy they’re campaigning on again this election), during coalition talks, NZ First secured a commitment to keep lifting the minimum wage, but there was no commitment to the minimum wage keeping up with inflation.
The gaffe will have done nothing to change voters’ perception of Luxon as a little out of touch with the lives of people on low incomes. In 2024 alone, the difference between the coalition’s 2% hike and an inflation-matching 4% hike is a little less than $950 a year for a fulltime worker. That’s more than the same worker would have saved in tax cuts.
Luxon saved himself slightly, noting, correctly, that under Labour the minimum wage had been hiked considerably above the rate of inflation, which had put pressure on businesses. Though Luxon did not say it, the argument here is that Labour’s steep hikes flattened the difference between the minimum and median wage, potentially creating distortions in the labour market.
The incident was symbolic of much of the night: Luxon getting himself into trouble, and Hipkins using his generally deeper knowledge of government policy to point out Luxon’s missteps when they happened. Luxon never really regained his footing after that gaffe.
A political animal, Hipkins simply has a stronger grasp of policy detail than Luxon and wasn’t afraid to jump into Luxon’s question lines to show it.
Rather embarrassingly, Hipkins even cut in on questions about Luxon’s passion for country music in a segment designed to probe whether the two leaders were really as normal as they claimed to be (Hipkins was asked questions about DIY and Luxon about country music). Luxon was asked to complete the lyrics to a section of Dolly Parton’s “9-to-5”, but it was Hipkins, not Luxon who was first to complete that section of the song.
Luxon also struggled to come up with a convincing answer to criticism about the coalition’s reforms to pay equity. He will have known more than a year ago that the coalition’s reforms to pay equity would be litigated on the campaign. He’s had more than a year to develop a convincing answer to questions about the necessity of those reforms and yet failed to do so.
It didn’t all go against Luxon. In fact, were it not for those two clangers, the debate might have been a draw.
Unexpectedly, where Luxon excelled was in making a case against Labour’s capital gains tax proposal, warning that it risked eroding the equity in people’s homes, prolonging the economic downturn. Hipkins didn’t have a convincing answer to this, or the unfairness of applying the tax to homes that were sold as a result of unfortunate circumstances like people divorcing.
There’s been a subtle shift in National’s positioning on housing this week. On Wednesday, the party announced it would allow councils to reintroduce minimum car park requirements in some cases, a watering down of Labour and National’s semi-bipartisan intensification regime. During the debate, Luxon made an impassioned plea for the importance of protecting and growing the equity in people’s homes. A year ago, Luxon was far more cautious on the matter of rising house prices.
Luxon seemed to come into the debate wanting to lay the groundwork for an anti-CGT scare campaign which can be rolled out in the last few days before voting starts. He did this successfully.
Luxon also defended the sluggish economic recovery with a strong line which noted that it was “easy to burn down a house but far harder to rebuild it” - a rare instance of a Luxon line perfectly and articulately expressing National’s point of view.
The debate did not appear to shift the momentum of the campaign. We knew going in that Hipkins was a better debater but has baggage from the last government and a complicated future coalition; we knew Luxon was a poorer debater with an equally complicated coalition.
Not a lot that occurred will have changed that. Perhaps the most newsworthy incident in the debate occurred when Hipkins, perhaps sensing the public’s frustration with the lack of discipline among minor parties, decided to block Green and Te Pāti Māori ministers from police and justice portfolios in any government he led. It followed a mid-level controversy in which candidates from the Greens and Te Pāti Māori posed for photos with the Mongrel Mob and posted them to social media. Hipkins wisely did his best to neutralise the issue with his rule-out.
Those portfolios might be ones for Qiulae Wong. With the Chrises unable to break the deadlock on Wednesday night, Wong, who spent the night at a finance debate in Queenstown, might have been the real winner.