SPARE CHANGE - The Ardern Years

Jacinda Ardern discovered she would become Prime Minister in rather a strange way.

After a couple of weeks of talks with both the National and Labour parties, NZ First leader Winston Peters took to a stage in the Beehive theatrette to announce which of the two his party had chosen to form a government with.

Ardern found out at the same time and in the same way as everyone else in New Zealand.

The moment was captured by her partner (now fiance) Clarke Gayford.

"Clarke filmed my face. It's not the most flattering piece of footage. It's fair to say I'm looking a bit anxious. Almost a bit sweaty,” Ardern recalled of that moment in October 2017.

"I'm standing near the couch in the opposition lounge watching the television. There are a group of MPs and staff around me. You can hear on the television the speech that [Peters] is making, as the camera stays fixated on my face.

"There is a sudden moment of realisation in my expression.

"I smile, and realise that we are going to have the chance to change everything."

That was before the mosque attacks.

Before Whaakari.

Before the Wellbeing Budgets.

Before Covid.

Before Neve.

And before Jacinda Ardern resigned as prime minister after five-and-a-bit frenetic years in charge.

For some, Ardern’s stewardship through crisis, as well as her dignity and leadership on the international stage, are enough to cement her legacy.

But Ardern herself set her sights higher than that.

She set out a series of priorities for the two governments she led. Her record against them is mixed.

On housing, climate change and mental health, there has been quite a lot of activity but less to show in the way of outcomes.

On wellbeing and child poverty, there is more evidence of an impact.

But the most complicated - and perhaps most significant - legacy of Ardern’s leadership is her management of Covid-19 and the related state of social cohesion in Aotearoa.

In her time as Prime Minister, Jacinda Ardern certainly did get the chance to change everything, as she had predicted. But she left office with a lot still to do.

Tackling Covid-19

It would have been extremely difficult to conceive of a scenario where the Prime Minister closed the borders, told everyone to stay home indefinitely and got 88 percent of the public backing that move. But that’s what happened within the space of a little over a fortnight in March-April 2020.

The success of Jacinda Ardern’s Covid-19 elimination strategy is often measured over the course of 2020 - those 102 days without community transmission - but it seemed to click with the public almost instantly.

A Colmar Brunton poll which ran from 3-5 April, 2020 - right in the middle of the first nationwide lockdown - found 88 percent “trust the government to make the right decisions on Covid-19”.

It helps to explain the strong response then National Party leader Simon Bridges got to a Facebook post he made a couple of weeks later which picked at aspects of the government’s response - testing rates, and the availability of PPE in particular. But he also suggested the lockdown period was being needlessly extended. The response was, in essence, don’t politicise it, Simon, we’re all fighting this thing together.

In the months that followed Ardern, Director-General of Health Ashley Bloomfield and Chris Hipkins (first as Health Minister, then Covid Response Minister) led the nation in a long series of pitched battles against the virus.

A hastily arranged Managed Isolation and Quarantine (MIQ) system was the first and by far the most important line of defence. It was, inevitably, prone to human error and there were repeated scares which led to lurches back up and down alert levels.

Regionalised lockdowns and increasingly complex rules (remember level 2.5; and level 3, steps 1 and 2?) tested the public’s patience.

But still, the elimination strategy fundamentally did what Ardern promised: countless lives were saved and the health system was spared the overwhelming burden Covid wrought on most other countries.

A nationwide opinion poll - the general election on 17 October, 2020 - returned an historic outright majority for Ardern’s Labour Party.

In the first two years of the pandemic, while millions of people died worldwide, fewer than 100 perished in New Zealand.

At the same time, a combination of low interest rates and monetary stimulus from the Reserve Bank, as well as $50b of additional spending by Ardern’s government had the economy humming.

In June 2020, the Economist Intelligence Unit ranked New Zealand’s policy response to Covid-19 the best of 21 OECD countries. In November, Bloomberg named Aotearoa as the best country in the world to live in during the pandemic.

But the successes obscured big problems beneath the surface.

During 2021, a Covid vaccination campaign eventually rolled out. It surged in the latter months of the year as many Aucklanders in particular became increasingly desperate to be relieved of a months-long regional lockdown.

It was in this period that the frameworks, guidelines and recommendations issued by Ardern, Bloomfield and Hipkins became more and more complex.

As part of the vaccination campaign, Ardern opted to implement a series of vaccine mandates. People would have to show proof of vaccination in order to do some everyday things like dining at a cafe, going to a gym or a hair salon. Some employers required staff to be vaccinated if they wanted to stay in the job - this included public sector roles in schools and early learning centres, police and the defence force.

Polling in November 2021 suggested 74 percent supported the mandate for teachers, health care workers, port, border, and prison workers. But by March 2022, support was down to 60 percent and opposition had climbed by 12 points to 32 percent.

The High Court overturned the vaccine requirement for police and defence force staff.

Opponents of the Covid response became emboldened. A three-week occupation of Parliament grounds ended in shocking scenes of police being attacked with flying bricks and fires lit on the lawn.

While Ardern still had the support of many, perhaps even most, New Zealanders in her Covid response, the end of the elimination strategy was nothing like the beginning.

In 2022, the first of three waves of Covid-19 infection spiked in February. By the end of the year, close to a third of all reported cases were reinfections. About 2500 people have now died as a result of Covid. And with well over two million cases, New Zealand will not be spared the impact of Long Covid, a condition still not well understood.

Social cohesion

The ‘Unite Against Covid’ communications strategy was exceptionally successful - until it wasn’t anymore.

Pressure points started to show on the borders (via MIQ), in particular.

A lobby group of New Zealanders abroad, Grounded Kiwis, grew in number and profile. They had dozens of examples of people desperate to get home but unable to secure a place in MIQ when they needed it - or at all. Hipkins tried to make the process more transparent and efficient with an online system for regular ‘lotteries’ but this only underscored the fact there were many more people who wanted a space than there were spaces available.

In April 2022, Grounded Kiwis won a High Court decision which found a more sophisticated system that still met public health aims could have been achieved. The MIQ system was, in some respects, unfair.

While that decision came after MIQ was shuttered, it was another sign of how the official response to Covid-19 could not sustain national unity indefinitely.

There were groups of specific interest forming with deep grievances: people opposed to vaccine mandates; those affected by the MIQ bureaucracy; and, as the rules were eased, those anxious about the threat of Covid spreading throughout the community.

Most people weren’t firmly in any of those camps. But there were other, non-Covid, issues coming for them.

The Covid response provided the backdrop for a familiar critique of a Labour government. A series of policies were framed by opponents as meddling, bureaucratic overreach. At the extreme end, there would often be language and imagery personally vindictive of Ardern that ran alongside these complaints.

First among them was the ‘Three Waters’ reforms, which were a response to a 2016 outbreak of gastroenteritis in the Havelock North drinking water. For years after that episode - which is thought to have killed four people - Local Government Minister Nanaia Mahuta worked on a plan to completely reform and rebuild the management of waste, drinking and stormwater. The idea was to spare local bodies the kind of debt they would need to upgrade and maintain water infrastructure. It meant councils losing direct control of their assets, and a mandatory voice for Māori.

For Ardern, this was a reasonable trade-off to guarantee people safe, sustainable and reliable water. That’s what people really wanted and it’s what she was offering. But this could only happen after the reorganisation of assets was done. Acknowledging there was a need for something to bridge that gap, in July 2020, Ardern and Mahuta announced a $761m “stimulus and reform” fund for councils who agreed to take part.

But Three Waters was, and still is, seen by Ardern’s opponents as a lamentable impulse for consolidating power and control within a sprawling, unaccountable bureaucracy. 

By the time Ardern resigned, her critics could point to health reforms, a mega-merger of polytechs and the merger of RNZ and TVNZ as further examples of a supposed 'centralise-or-bust' mentality. Each had its own purported reasons for being, but Ardern and her ministers struggled to own the narrative.

Ardern, of course, was not the first prime minister to have her policy programme knocked off course by opponents. But there was something deeper happening here.

Jacinda Ardern set impossibly high standards for inclusiveness in Aotearoa. In the first Speech from the Throne on behalf of Ardern’s government in November 2017, Governor General Dame Patsy Reddy said: “This will be a government of inclusion … This government aspires for this to be a country where all are accepted, no matter who they are, where they come from, how they live or what their religious beliefs are.”

New Zealand, she said, had a great opportunity now to become “a kinder, more caring and confident nation”.

“We will have to do things differently. But it is possible, if we include each and every person, in each and every town and region of New Zealand.”

There is no way to govern - especially with a plan to be transformational - without some people feeling marginalised. Ardern’s rhetoric suggested no-one needed to fear being ignored. Everyone would be heard. But then what?

When the Cabinet she chaired made its choices, she would have to say: “We have heard you, but…” Of course those groups on the wrong side of decisions would feel like the voices of others had been preferred to theirs’.

Ardern’s rhetoric was then turned against her. How could she say her government accepted everyone when it was excluding the unvaccinated from parts of everyday life? Or forcing them from their jobs?

Worse, some people interpreted the “inclusiveness” Ardern promised as a lie. It was about enhancing the rights of the historically marginalised - the LGBTQI+ community, Māori, women - at the expense of everyone else, some believed.

Ardern never solved this problem. But then, neither did Barack Obama nor Nelson Mandela.

Perhaps it was enough that she accelerated the march of history towards a more equitable nation. But there is no hiding from the fact that we live in a sharply polarised nation today.

Climate change

Very soon after she swept into the role of Labour leader, Jacinda Ardern made a declaration that would be repeated back at her approximately 50 million times. Climate change, she said, was her generation’s “nuclear-free moment”.

It was a good line. So good, in fact, that the political journalists who followed her around the next five years never forgot it.

Climate change was in many ways a defining challenge for Ardern. It was an urgent, global problem when she started as PM and it’s still there now - only it has gotten even more acute. It didn’t stop for the pandemic, the Christchurch terror attack or the Whakaari eruption.

“Crises do not form an orderly line waiting to be addressed,” went the 2020 Speech from the Throne.

“Three of the country’s longest-standing and hardest issues demand continued and determined action: affordable housing and homelessness, child poverty, and the global climate crisis.”

Ardern’s rhetoric on climate change was typically sweeping. One of her earliest moves as Prime Minister, in April 2018, was to allow no more offshore oil and gas exploration permits. Expectations among climate activists soared.

The actions since then have been a little less eye-catching.

By late 2019, the Zero Carbon Act was passed into law. It established an independent Climate Change Commission and made it a legal requirement for governments to have plans for lowering carbon and methane emissions.

In May 2022, Climate Change Minister James Shaw announced three ‘emissions budgets’ outlining the reductions in carbon emissions required up to 2035 to keep on track for zero net emissions by 2050. The first budget calls for emissions to fall to 72.4 megatonnes per year, a reduction of two megatonnes per year on the five-years prior. The reductions get much steeper in the next two five-yearly budgets.

Ministers have outlined plans across transport, energy, building, waste, agriculture, and forestry to meet the first budget but these have been criticised as too long on generic statements and short on bold specifics.

If this is all sounding a bit future-focused, that’s because it is. Sort of like legislating for the All Blacks to win the next three Rugby World Cups then announcing a plan to win next year’s Bledisloe Cup.

Concrete actions to date have included phasing out fossil-fuelled industrial heat in schools, hospitals and universities as well as funding for the private sector to do the same. The Emissions Trading Scheme was also stiffened up with the introduction of a cap on credits, which is supposed to reduce over time. 

But while Ardern’s two governments have spent a lot of time and effort on climate change, there has been no sign of a sustained reduction in emissions - something Ardern described as “urgent” five years ago. And Ardern spent very little of her political capital on the problem.

Her preferred conciliatory approach was tested through the He Waka Eke Noa process for addressing agricultural emissions.

During the 2020 election campaign, Ardern pointed to He Waka Eke Noa (“we’re all in this together”) as her party’s solution to reducing the climate damaging methane emissions that New Zealand has a particular problem with.

The group - made up of a number of farming bodies, working alongside government officials and Māori leaders - was asked to agree on a plan for reductions. After months of consultation, it produced one in May 2022. The Climate Change Commission outlined concerns with that plan. And in October, Ardern fronted an announcement that went further than the group had suggested, putting farmers back on a path (of sorts) to the Emissions Trading Scheme. He Waka Eke Noa countered and just before Christmas, the government came back with further changes.

He Waka Eke Noa was established in October 2019 with the goal of reducing emissions at the farm level by 2025. There is still no agreement on exactly how that will happen.

The greatest frustration for climate activists is the perpetual sense of preparing for a catastrophe that’s already here. Ardern has certainly helped prepare New Zealand but the really hard work of actually reducing emissions has been left for someone else.

Wellbeing

In January 2019, Jacinda Ardern spoke at the World Economic Forum in Davos. She made a bit of a splash with the outline of a plan to present a Wellbeing Budget for New Zealand. 

“We're embedding that notion of making decisions that aren't just about growth for growth's sake, but how are our people faring?” Ardern said.

Not for the first - or last - time Ardern got global attention for the speech. But the idea for a Wellbeing Budget was not exactly novel.

In 2008 then-French President Nicolas Sarkozy established the Commission on the Measurement of Economic Performance and Social Progress. It said measures of economic wellbeing need to better represent individual circumstances and recommended a ‘dashboard’ of data to measure economic wellbeing across health, education, environment, employment, and social connectedness.

Ardern’s predecessor, Bill English, had advanced the idea of connecting the government’s funding decisions with social outcomes through a ‘social investment’ approach.

But the systems established in the 2019 Budget do seem to have stuck.

Treasury has a ‘Living Standards Framework’ that it says helps to guide its recommendations to Cabinet about funding decisions. It also produces a dashboard - just like the one Sarkozy’s commission proposed - to track progress. So, what does it show?

The dashboard was updated in April 2022 and relies on a range of different surveys. There are more than 50 different data series with a trendline for each, including:

The percentage of young people who are not in employment, education or training was 11.9 per cent in 2017 - it was exactly the same in 2021.

The percentage of adults who were victims of family violence in the past year was 2.3 per cent in 2019. It fell in the following two years, down to 1.7 per cent in 2021.

The percentage of adults who report they do not have enough money to meet everyday needs continued to fall from a peak of 16.6% in 2010 down to 8.8% in 2021.

The percentage of adults with high or very high levels of psychological distress climbed from 7.6% in 2017 to 9.6% in 2021.

It’s a mixed picture and the impact of Covid-19 puts a shadow over almost everything. The most recent spike in inflation is also not yet captured.

Under questioning about incomes and wellbeing, Ardern and her Finance Minister Grant Robertson often returned to the measures within their so-called ‘families package’, which was announced just before Christmas 2017 and took effect in July the following year.

English’s government had legislated for tax cuts by finally shifting up the income brackets at which rates rise. It would have lowered the tax burden for anyone on less than $52,000 per year. Ardern immediately scrapped this plan, restoring the pattern of a steadily increasing tax take. That money would instead be handed back in the form of a series of payments: increased Working for Families benefits, a Winter Energy payment for low income households, ‘Best Start’ payments for families with newborns, and an extension of paid parental leave to six months.

Ardern and Robertson returned to these transfers as their preferred approach to lifting incomes and wellbeing. In 2020, the winter energy payment was doubled for one year, and benefit rates permanently lifted as part of the Covid-19 response. Ardern’s last major policy announcement, at the Labour Party conference in November 2022, was a boost to childcare subsidies.

It’s clear these payments made a material difference to incomes, and to a lesser extent, overall wellbeing. They cement Ardern’s status as an icon of the Labour Party but lack the enduring impact her predecessors achieved via the creation of initiatives like Working for Families, KiwiSaver, or the Treaty settlement process.

And it’s hard to believe Ardern and the machinery of government needed the ‘well-being’ approach to Budget decision-making in order to arrive at these policies.

While they’ve stuck to that process, it does threaten to end up as just another layer of parliamentary procedure rather than anything truly transformative.

Child poverty

If there was a theme to Ardern’s wellbeing initiatives, it was a determination to drive down the rates of child poverty.

In some ways, the work on child poverty was a bit like that on climate change. A lot of effort went into targets and legislation. But Ardern was able to achieve better clarity on child poverty, and better progress.

In her first term, she took on a newly-created portfolio of child poverty reduction. The Child Poverty Reduction Bill was passed, mandating a series of targets on multiple measures over different time frames. Two units within the Prime Minister’s Department were established - a Child Poverty Unit and a Child Wellbeing Unit.

Did any of it work?

Early in her first term, Ardern made a particular show of setting a 10-year target to halve the rate of child poverty. One way of measuring this, she said, was counting the proportion of children living in households earning below 50 percent of the median income before housing costs. The figure at that time was about 16 percent - “totally unacceptable for a country like New Zealand,” she said. Ardern wanted it down to 10.5 percent by 2021 and 5 percent by 2028. But progress has been slow - it was about 13.6 percent by the year ended June 2021.

On the two other measures for child poverty, however, it beat one target and technically achieved the other (it was within the statistical margin of error).

Ardern left office with a lot of work still to be done to even get close to the next targets she set for child poverty. And it will only get harder from here.

The 2022 Child Poverty Monitor, prepared by the Child and Youth Epidemiology Service at the University of Otago, stressed the large gap that remains between European children and those identifying with other ethnic groups, and between disabled and non-disabled children. On the measure Ardern wanted below 10.5 percent by 2021, European children were at 9.7 percent but tamariki Māori were at 18.1 percent and Pacific children 17.2 percent.

A “much more targeted effort” is needed, the report said.

Housing and homelessness

For a time, it seemed possible that Jacinda Ardern’s biggest and riskiest move as PM would be the introduction of a capital gains tax.

She was, after all, the leader of a party that campaigned on one for six years before taking power.

The nature of her first-term government, however, was the need for NZ First’s support on a major move like a new tax.

A tax working group recommended a capital gains tax but in April 2019, Ardern admitted defeat on trying to convince Peters to make it happen. She ruled it out for as long as she remained PM.

A much more politically damaging defeat followed with the abject failure of KiwiBuild, a scheme that promised the construction of 100,000 high-quality, affordable homes within 10 years. The target led to homes being rushed up where they weren’t needed, just to try to keep pace with that arbitrary 100,000 goal.

Soon after KiwiBuild was re-scoped, Covid arrived, interest rates were slashed and house prices climbed at an even faster rate than before. It was the summer of 2020/2021 before Ardern gave her most forceful response to what quickly became an affordability crisis.

Among the range of mostly tax measures was an extension of the “bright-line” test, which was widely seen as the backdoor version of a capital gains tax.

A steep decline in house prices that began about nine months later had much more to do with the sudden end of accessible, cheap borrowing. Although the tax changes are seen as significant, there are few who would argue the housing supply problem that was frequently cited prior to 2022 has been permanently solved. And even with the sharp price drops recorded to date, the national median house price remains about $150,000 higher than pre-Covid levels.

Supply problems also stalked efforts to eliminate homelessness. Ardern and her ministers often proudly repeated that stopping the sale of state houses was one of the first things they did. But even with Housing New Zealand building new homes at a rate of - on average - four new homes a day, a major problem developed with temporary or transitional housing.

Simply, the government has not been able to keep up with demand. The result has been seen most visibly in Rotorua where a busy tourism hub has been transformed into a strip of motels filled with people in desperate situations, many of whom have mental health or addiction problems. The motels in many cases were ill-equipped to manage their temporary tenants, and there were few rules or checks on standards of accommodation. But still, they collected $788m to house 37,887 people between March 2020 and July 2022.

Mental health

Ardern’s efforts with large funding commitments were similarly frustrated on mental health provision.

In the high season for ministerial reviews after the 2017 election, mental health was on the list. It would be a “special focus” for that government, the Speech from the Throne said.

“New Zealand’s high suicide rate, especially for adolescents, is shameful,” that speech said.

The response to the ministerial review, He Ara Oranga, was the centrepiece of the 2019 Wellbeing Budget. 

Then-Health Minister David Clark said a new frontline service for mental health would be fully rolled out within five years.

“It will put trained mental health workers in doctors' clinics, iwi health providers and other health services so that when people seek help it is immediately available,” he said.

“For example, when a GP identifies a mental health or addiction issue they can physically walk with their patient to a trained mental health worker to talk.”

Up to 325,000 people a year would be accessing this new model of primary mental health care, he predicted.

A total of $1.1b was allocated for this and a range of other mental health initiatives over the following five years.

But by 2021, it was clear the money pouring in to improve mental health services was missing its mark in some important places. Money went unspent as providers complained about struggling with procurement processes.

Mental Health Foundation chief executive Shaun Robinson even said the crisis in mental health had actually got worse since Labour took power.

In the New Zealand Health Survey, published by the Health Ministry in November 2022, 8.8 percent of adults reported an unmet need for professional help for their emotions, stress, mental health or substance use, compared to 4.9 percent in 2016/17. The problem was worse for young adults - 16.2 percent for 15-24 years and 15.6 percent for 25-34 years.

Parents were also reporting in greater numbers they couldn’t get professional help for their children for their emotions, behaviour, stress, mental health or substance use - up to 6.2 percent from 4.5 percent in 2016/17.

There has been no sustained improvement in the suicide rate.

The change that never quite arrived

In mental health and housing there was no shortage of money or political will. But Ardern’s governments were unable to meet the sheer scale of the problems. Diagnoses will vary: perhaps there were better ideas that have gone untried; maybe there were personnel problems in the public service; maybe even more money was needed; or maybe they just need more time. It’s probably a bit of everything.

For Ardern, though, there is a pattern across these and her other priority areas. Her rhetorical skill and personal conviction to really make a difference inflated expectations beyond what her government - including the public service that actioned its orders - was able to achieve.

On a careful analysis, her policy achievements are relatively modest.

But there is another dimension to being a prime minister that’s harder to measure. A modern PM is the moral leader and national captain of the mood, especially when times are tough. Ardern was a natural in this role. She knew what to say and how to act when the shock of the Christchurch terror attack hit, including the swift passage of an assault weapons ban.

Her intellect, work ethic and communication skill combined to steer Aotearoa through the most dangerous stage of the Covid-19 pandemic. It is easy to forget that the path she chose at that moment was bold and not at all guaranteed to work. This was surely her finest and by far most impactful achievement as one of this nation’s most historically significant leaders.