NZ opposition leader Hipkins says Labour focused on tackling cost of living woes

By Lucy Craymer

WELLINGTON, Sept 9 (Reuters) - Former New Zealand Prime Minister Chris Hipkins says his Labour party was too slow to grasp the cost-of-living pain in the wake of COVID-19 battles, as he looks to win back urban, middle-income voters who will help decide the November 7 election.

Hipkins, 48, elected Labour leader and prime minister after Jacinda Ardern's surprise resignation months before the 2023 election, struggled to gain traction with voters as right-wing parties positioned themselves as better at managing inflation to return to growth.

"COVID had been all-consuming," Hipkins told Reuters in an interview. "We were too slow to revert back to non-COVID-related good governing."

With cost of living a key concern for voters ahead of an election expected to be close, Labour unveiled policies to provide relief, such as weekly caps of NZ$20 on public transport costs in large urban cities and NZ$10 in small centres, three free doctors' visits a year and a program to adopt solar power.

Beyond cushioning voters from the immediate squeeze, however, Hipkins said Labour's answer is to rebuild the urban economy.

It is pitching innovation, technology, renewable energy, research and development as sources of skilled jobs that can help revive urban economies alongside more resilient rural exporters.

"The tech revolution that we're in at the moment has the opportunity to be a source of massive competitive advantage for New Zealand," Hipkins said. "Renewable energy has the potential to be a source of competitive advantage."

Labour's policy platform includes a New Zealand Future Fund intended to back high-growth businesses, innovation and infrastructure, alongside support for apprentices and small businesses.

FISCAL PLAN TARGETS OPERATING SURPLUS BY 2029/30

Labour's fiscal plan targets an operating surplus by 2029/30, while maintaining spending and revenue at about 33% of gross domestic product once its capital gains tax is in place.

Labour has faced significant criticism from the current government that blames it for overspending in its last term, entailing cost-saving measures. New Zealand is not expected to return to an operating surplus until 2029 to 2030.

Hipkins rejects the contention on the grounds that if his government had stayed in power it would have reached surplus earlier than the current government intends.

However, governments need to spend money at times in order to save money, such as investing more in preventative healthcare, he added.

COALITION PROSPECTS

Polls ahead of the election show that neither National or Labour will garner sufficient support to rule alone, so they will need to partner up.

Since 2023, New Zealand has been governed by a coalition of three parties: the centre-right National Party, populist New Zealand First and the right-wing ACT Party.

"Prime minister will be me," Hipkins said, listing items he called non-negotiable. "Barbara Edmonds will be minister of finance." Any negotiations or compromises made to form a government need to have public support, he added.

"The smaller parties shouldn’t be able to force through chances that are unpopular by holding the country to ransom," he said, adding that New Zealand had a successful track record with minority governments.

(Reporting by Lucy Craymer; Editing by Clarence Fernandez)

((Lucy.Craymer@thomsonreuters.com;))