Luxon tries to head off vibecession with a major reshuffle

Marc Daalder

Marc Daalder

Newsroom, Wellington, January 21, 2025

 

Prime Minister Christopher Luxon announcing changes to his Cabinet with Finance Minister Nicola Willis at the Media Conference on January 19, 2025 (RNZ Photo by Jo Moir)

Prime Minister Christopher Luxon will have got a nasty shock on Friday (January 17) when the Taxpayers Union published its Monthly Poll showing National’s worst major poll result while in government since 1999.

In the survey, by National’s own preferred pollster Curia, the Party dropped below 30% to 29.6%

It was leapfrogged by Labour at 30.9%

Luxon’s own polling also declined, with just 24.5% of respondents saying that they wanted him as PM, though that was still well above Labour leader Chris Hipkins’ 15.3% showing.

While it seems that Luxon had already been thinking about and working on a surprise reshuffle of his Cabinet for a few days before the poll landed, it will have reassured him that big changes to his front bench were warranted. And so they came, in an unexpected announcement on Sunday (just days before the Caucus retreat where such decisions are usually revealed) following a story broken by the NZ Herald predicting the move.

Reshuffles and Reassignments

The headline is a biggie: Shane Reti has been demoted, losing his Health Minister role to Simeon Brown. But beneath that, there were plenty of major reshufflings and reassignments.

Three new roles have been created: Nicola Willis is now the Minister for Economic Growth (formerly Economic Development) with a wide mandate to stimulate productivity and the economy; newcomer James Meager is the Minister for the South Island and Todd McClay has now had Investment tagged onto his job as Trade Minister.

Chris Bishop has picked up Transport, which gels well with his Infrastructure focus; Simon Watts gets Brown’s Energy and Local Government jobs, which will flow well with his Climate portfolio; and Judith Collins becomes the Public Service Minister.

Melissa Lee, demoted from Cabinet last year, is now out of the executive entirely.

Matt Doocey has lost three ministerial roles and one associate job, gaining nothing in return (but is somehow still in Cabinet).

Mark Mitchell gets Ethnic Communities, an interesting pick, given Mitchell rejected the Police’s own research last year which showed systemic bias in the service. Luxon said that he was qualified because “he is someone who has huge empathy for communities and people all across New Zealand.”

Luxon’s Two Themes

Notwithstanding all the complicated exchanges of hats and games of musical chairs that necessarily accompany any major Cabinet reshuffle, there are two themes Luxon is speaking to with these decisions.

New Zealand’s economic recovery needs to go beyond a return to baseline. While Luxon and Willis are still talking about slashed government spending and last year’s tax cuts, neither seems to have shifted the dial on the economic mood of the nation.

The pair claim credit for falling inflation and interest rates in 2024 and hoped-for GDP growth in 2025, but the reality is that government decisions are rarely the major contributor to these factors – and when they are, they take years, not months, to have an impact.

Still, there is a recognition that good economic data does not equal good economic vibes.

In the United States, the Democrats have failed to win re-election to the Presidency and lost control of the Senate amid a period of historic economic recovery. There, the phenomenon was called the ‘vibecession.’

Labour’s Approach to the 2026 Election

Chris Hipkins, speaking to Newsroom before the end of the year, was frank about Labour’s planned approach to the 2026 election. He hopes to ask a simple question, the same one that catapulted Donald Trump back to the White House: Are you better off now than you were three years ago?

While the economic data suggests the objective answer is likely to be ‘Yes’ for most Kiwis, that does not mean that they will attribute economic progress to the government’s actions.

In the Taxpayers Union/Curia poll, 53% of respondents said the country was moving in the wrong direction, compared to just 39% who said it was going the right way.

The net view (14% towards the wrong direction) is the lowest since December 2023.

None of that speaks to a public that is buying Luxon’s lines about economic recovery. His reworked focus on economic growth is an attempt to change that.

Improving Healthcare

The second theme of the reshuffle is that progress in healthcare needs to come more quickly. Luxon was fairly explicit about that, saying that while Reti had handled the first year well, Brown was the man to actually bring down wait times across primary and emergency care.

As with the economy, sometimes the perceptions around health are just as important as the concrete achievements. Concrete change in health is already difficult enough. The portfolio has long been seen as a hospital pass, and for good reason. Health New Zealand is the country’s single largest employer by a factor of four.

Reti has worked hard in the portfolio, benefitting both from his experience as a doctor and from having no other major roles to distract him. And even so, progress has been sluggish at best. The reality is that change in the health system, like the economy, takes years, not weeks or months.

Even if Brown can turn things around, no guarantee will lead to a boost for National. As with the economy, the important health statistics are governed by averages. Just because overall wait times might fall doesn’t mean everyone will always be seen quickly at their GP or in the emergency department.

It only takes a few viral anecdotes on social media or news stories to reverse progress on the narrative of a faster, more efficient health system.

These are the headwinds of incumbency – particularly when you are a new incumbent, elected on a promise of a turnaround job. Luxon is now learning that turning around is only part of the job.

Marc Daalder is a Senior Political Reporter at Newsroom. He covers Climate Change, Health, Energy And Violent Extremism. The above article has been published under a Special Agreement with www.rnz.co.nz

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share this story

Related Stories

Indian Newslink

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide