Market Update: Chris Hipkins needs more than charm to win over wary business leaders – Fran O’Sullivan – Full Analysis

It was an issue when he was Prime Minister from January to November 2023, during which he launched a policy bonfire to refocus on “bread and butter” cost-of-living issues, taking the knife to key Labour programmes and more.

The prior Labour Government’s reformist agenda was poorly conceived and implemented – it was not a patch on the well-conceived launch of KiwiSaver and the NZ Super Fund, which Hipkins referenced in his speech to distinguish Labour from National.

The “bonfire” was effectively an admission of Cabinet incompetence – not that Hipkins put it that way.

The “savings” he announced then were a drop in the bucket when it came to the escalating debt burden Labour incurred in the three years it reigned supreme as a majority Government.

This is important.

Tight political polling shows Labour is in with a fighting chance of forming a Government after the November 7 election.

Hipkins’ team has brilliantly ridden a wave of voter dissatisfaction: persistently high cost of living pressures felt every time Kiwis go to the supermarket, or pay insurance and rates bills and those for energy.

Talented young New Zealanders, whole families for that matter, are off to Australia for a brighter future in a land where optimism is second nature. Even Dame Jacinda Ardern is moving there.

Labour’s strategy – don’t take to the field when your opponents are kicking own goals – has worked. But that is not a long-term strategy.

When it comes to Hipkins versus the “other Chris”, Prime Minister Christopher Luxon, Labour’s Chris is well ahead on likeability.

He is affable – a political personality nurtured through student politics, time as a staffer in Helen Clark’s Beehive apparatus and years buried in the depths of Labour’s machine politics.

Hipkins knows how to rattle cages – as he is doing currently by keeping the other Chris on edge as he sweats him before doing a deal to support the Indian free trade agreement.

With Prime Minister Narendra Modi likely visiting in July to celebrate the agreement, Hipkins will not want to be cast as a deal-breaker. That won’t help votes in the Auckland market.

Luxon is from the managerial school.

He was not bloodied in politics before entering Parliament.

Leading a Cabinet team is more difficult than he projects. He’s thrown away 90-day plans, which can distract teams from focusing on what really matters rather than indulging in tick-box management.

He is less prone to disparaging others. It’s been a while since he’s mentioned bottom-feeders and the “C-list”.

He still talks about how he “came into politics to mount a turnaround”, but it would go down better with colleagues if he focused on “team”.

Something his very well-versed prior Deputy PM has publicly reminded him on X – “we not I”.

A psychologist might say it is the classic “empath” against a “narcissist”, but the two Chrises are a mixture of both and need to be to succeed.

The diagnosis Labour’s Chris covered this week – stagnant productivity and a cost base eroding business competitiveness – is not new. It also deteriorated under the last Labour Government.

But he also said a future Labour Government will need multiple terms to bed in its policies.

Correcting the mistakes of the past, rather than pushing ahead with vim and vigour, may just be a recipe for more stasis. Looking at where New Zealand sits on most metrics, momentum is needed.

If Hipkins wants corporate New Zealand to take him seriously, he will need to show he understands which decisions from his time in government helped create the very environment he now criticises.

Take climate change: he argues New Zealand can become a “renewable energy superpower” as investments in renewables deliver cheaper power, more resilient infrastructure and new jobs and industries.

But from a business perspective what is the transition pathway to this future; where is the investment coming from: taxpayers, consumers or capital markets?

Saying no to the Government’s LNG terminal is not a strategy despite Hipkins’ critique that it will lock New Zealand into volatile global gas markets and add costs to every power bill for decades.

Hipkins has also cited nearly 240,000 people leaving in two years – the equivalent to stripping out the populations of Napier, Rotorua and New Plymouth.

The profile of those departing is the workforce companies need to grow and build.

Hipkins is all across the drivers but what does Labour plan to stem the flow?

He is waiting until after the late May Budget to announce Labour’s policies. This to see what fiscal headroom the party has for new policies.

There is certainly political bandwidth for a different pathway.

Hipkins is also developing good bench strength. His team is disciplined. He promises some talented new players for the election.

But businesses do hold back on investment near election times (particularly if they are likely to be a close-run thing).

Ensuring the business community knows the scope of what is in the offing (even behind the scenes) will assist his standing.

But when you boil it down, Labour’s plan has to be bankable to ensure business will invest to help underwrite the very future Hipkins wants to lead.

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