The messy business of throwing together an election plan

Sunday, 15 February 2026

Vernon Small is a former journalist and ex Labour Government advisor

OPINION: Key elements of abstract expressionism included throwing or dripping paint onto a wall or canvas, and energetic techniques with no central focal point.

Apparently, the movement marked a shift away from social realism to expressing more primal feelings through emotion and speed.

Sorry, I digress.

Watching the rushed and random announcements out of the Beehive this week you might conclude some sort of plan is being thrown together with only one clear focus - the election later this year.

They included a surprise decision to establish an “independent” review of the Reserve Bank’s performance during the Covid pandemic. It will land in September just weeks before the election – timing that hit a wall of scepticism from commentators.

To be honest, the sense of rushed and random policy, presumably sparked by continuing knife-edge polling, was less justified by economic news than it has been recently.

Westpac issued a very positive outlook, tipping stronger economic growth of 1.8% in 2025, 3.3% in 2026 and 2.7% the following year. Meanwhile there was relatively good news in Treasury’s update for the six months to December which showed a $1.5 billion improvement in the deficit track since Christmas, though much of that was down to timing issues and may reverse in coming months.

How the Reserve Bank (RBNZ) review weighs the extra debt and the cost to the government of the RBNZ’s Large Scale Asset Purchase (money printing) programme, versus the benefits to the government of the extra activity and tax revenue, will be a key measure of the review’s credibility. The RBNZ’s view, expressed by chief economist Paul Conway, is that the higher revenue almost entirely covered the direct costs of LSAPs.

Even more contentiously, the review will look at the interaction of monetary policy and fiscal policy – the latter the exclusive responsibility of the Government not the central bank. Here constitutional boundaries lurk.

But the award for the most garbled announcement must go to the urgent need for a liquefied natural gas (LNG) terminal in Taranaki costing “north of $1 billion” to be funded by an impost on consumers, owned by private interests but leased by the State.

Details were woolly and numbers vague so, not surprisingly, the focus has been on the extra cost on top of high and rapidly rising power bills, and hence whether the charge was a tax or not.

By week’s end it was still unclear whether the Government would admit it was a tax (as Winston Peters agreed it was) a levy (as it was initially described), a charge, or some even more weaselly term.

But National’s spin machine seems to have decided it is a sort of political Voldemort that cannot be named. So, questions about it were answered with claims it was (kind of) none of the above, because its cost would be outweighed by savings.

By that avant-garde definition, any tax collected to pay for services that delivers a greater benefit ought not to be called a tax. Presumably that applies to money raised to pay for health care, education, the police or defence – or anything else that the Government spends. Unless, perhaps, it is inefficient and wasteful.

You could imagine Labour MPs rolling around laughing as they reprised all the “tax not a levy” lines National had run before the election. Not to mention the delicious irony of being able to sloganise about their capital gains tax paying for three free visits to the doctor while National’s “gas tax” would build a terminal that would pay its way if it was rarely if ever used. It was left to Labour’s Tangi Utikere to deliver with a straight face the warning to voters about National as the taxing party.

Where the Government did supply some numbers about its LNG plan, they were less than precise.

It suggested that the benefit of lowering the current dry-year risk premium in power prices would more than offset the extra cost to consumers delivering a net benefit of $265 million a year stressing that was the equivalent of $50 a year for each household.

Now as of mid-2025 Stats NZ estimated there were some 2,041,900 households. So, if the Government’s $50 estimate is right, the overall savings are about $100 million for household consumers with the balance of the $265 million savings presumably going to non-domestic users.

Meanwhile, the Government aims to quickly sign contracts for the terminal to lessen the chance the next Government will overturn them (as National did disastrously with the Cook Strait ferry contract).

And it will also rush through special legislation to put in place consents for the LNG terminal – bypassing its own fast-track legislation.

The timing of that announcement couldn’t have been more delicious. It came after a panel, set up under the fast-track law, issued a draft report turning down Trans-Tasman Resources’ application to mine the seabed off Taranaki; a venture that would have extracted vanadium, one of the minerals often cited by NZ First deputy leader Shane Jones.

Jones’ response was that NZ First would campaign on giving ministers final say on fast-track decisions – a power that was in the initial draft law but dumped after public outcry.

The official Government line was a “silk-purse/sow’s ear” response. Ministers artfully suggested the panel’s seabed mining finding showed the fast-track law was “not a rubber stamp” as some critics would have it.

It’s just that when it comes to the LNG terminal, if the avant garde fast-track law is not an abstract rubber stamp, then a statutory rubber stamp is clearly needed.

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