WELLINGTON (BLOOMBERG) - New Zealand's next government looks set to veer to the left with the Green Party getting its first taste of real power in Prime Minister Jacinda Ardern's Cabinet.
Ms Ardern's Labour Party is poised to sweep to victory in the Oct 17 election and she's likely to enter a coalition with the Greens, forming the country's first pure left-leaning government since 1999.
The centrist New Zealand First Party, Ms Ardern's coalition partner for the past three years, is unlikely to be re-elected, removing a conservative brake just as the Greens gain a greater say on policy.
The party, which hasn't sat in Cabinet during its 30-year history, says the coronavirus pandemic is a once-in-a-lifetime opportunity to tackle social inequalities as well as the climate crisis.
Co-leaders Marama Davidson and James Shaw will be pushing Ms Ardern to boost welfare payments, introduce new taxes on the wealthy and do more to tackle agricultural pollution.
"Labour are still not offering proposals to meet the scale of the challenges at the scale that they need to be met," Ms Davidson said in an interview in the party's parliamentary offices in Wellington. "There is no reason for people to be living in any misery or poverty in this country."
While the Greens backed Ms Ardern's first administration, they weren't part of the coalition and their three ministerial posts were outside Cabinet.
Ms Davidson and Mr Shaw won't reveal what roles they want in the next government, but said they will push Ms Ardern to focus massive economic stimulus on three areas - "the climate crisis, the biodiversity crisis, and the crisis of deepening poverty."
"We talk about in this next term being able to go further and faster than we have been able to," said Mr Shaw. "Labour won't want to go as fast or as far as we will, but that's quite a different proposition from the last three years."
New Zealand's political landscape has changed since Ms Ardern's stunning election victory three years ago, when she lifted Labour from the doldrums and pipped the larger National Party with the support of New Zealand First and the Greens.
The centre-right has lost ground to the centre-left, thanks largely to Ms Ardern's masterful handling of major crises - first the mass shooting at Christchurch mosques that killed 51 people, and now the Covid-19 pandemic. By contrast, National has been beset by scandal and changed leader three times.
Labour had 47 per cent support in the latest opinion poll compared with just 33 per cent for National. While the libertarian ACT Party has risen to 8 per cent, the Greens are polling at 7 per cent, giving the centre-left a healthy majority. New Zealand First has slumped to 1 per cent, well below the 5 per cent needed to get back into Parliament.
While full of praise for Ms Ardern's leadership, Ms Davidson said the prime minister has failed to deliver the social transformation she promised.
"Ours are the more progressive, bolder, more transformational changes," she said. "One of the most immediate things that needs doing and could be done overnight is lifting the incomes of the lowest income households."
The party's poverty action plan calls for a guaranteed minimum income of NZ$325 (S$292) per week for students and people out of work and significant boosts to welfare payments for low-income families and single parents.
They want new taxes on top earners, including a wealth tax on net worth over NZ$1 million - a policy Labour has rejected.
On the environment, the Greens have also been disappointed. They were forced to watch as Ms Ardern watered down plans to make the economy carbon neutral by exempting agricultural emissions.
Instead of immediately including farming in the emissions trading scheme, the government allowed the industry to develop its own emissions pricing to be in place by 2025.
The Greens say they will make sure a review of progress is carried out in 2022 and if it is insufficient, farm emissions will be taxed. Other priorities include more clean energy such as solar power and a continued focus on improving the nation's waterways by reducing the use of nitrogen.
Their transport policy, unveiled Tuesday (Sept 29), calls for significant new investment in rail networks and cycleways around the country, and a requirement that all new imported cars be zero-emission by 2030.
Labour may be polling close to 50 per cent, but no major party has ever achieved an outright majority in Parliament since New Zealand introduced proportional representation in 1996. In any case, Ms Ardern has signalled she prefers to work with the Greens even if she doesn't need them to govern.
The bigger issue for the Greens is figuring out how to escape the usual fate of small parties in government - getting overshadowed by their larger partner, shedding support and sometimes being voted out at the next election. That will mean retaining the ability to disagree with cabinet decisions that don't go their way.
"We are actually trying to defy history here," said Ms Davidson. "For us to survive, our political independence is as important as being able to show that we can work with Labour and get some stuff done."