TLDR: Apparently out of the finally blue skies of a summer break, Jacinda Ardern announced this afternoon she has decided to resign as Prime Minister, saying she just didn’t have enough energy left to keep going for a third term.

After disclosing the date of the next election, Ardern shocks by announcing her resignation. Photo: Getty Images

I wrote and said publicly last year there was a non-negligible but real chance she would retire just before Christmas or early this year before the resumption of Parliament and in time for a new Labour leader to prepare for the election. I saw a retirement as possible, in part because of the intense pressures of the job over her five years in charge, and in part because Ardern has, bit by bit, ruled out many new policy areas for Labour.

She also knew she had become personally and viscerally unpopular with a section of the electorate, some of whom are swinging voters able to bring in a new Government. But it’s fair to say this is a surprise and a complete shock to most. It completely throws open the prospects for this year’s election, which is now set to be on October 14. I said it was possible, but never believed it was probable. It’s still a shock.

Ardern will be replaced by a new Labour leader and Prime Minister if two-thirds of the Labour caucus agree on a new leader in a vote on Sunday, but (in theory) without her deputy Grant Robertson as a candidate. He has said he will not stand again, but I think there’s a chance the caucus will beg him to do it, given he remains the most popular and accomplished politician in the caucus.

If Robertson is resolute about not taking the job, the vaguely viable candidates to replace her include Cabinet ministers Chris Hipkins, Michael Wood, Megan Woods and Kiri Allan. In my view, only Robertson would be able to revive Labour enough to reverse National’s lead in the polls and win the election. Hipkins is most likely to win the caucus vote, in my view, given his experience and resolve under pressure.

The ultimate tragedy of Jacinda Ardern, the politician

I’ve included some of the audio from Ardern’s news conference in the podcast above, along with my analysis of what happened today, why it happened, and how it might change the outlook for the Government, and any policies. I have also included my tribute to Ardern, and tried to explain what I see as her ultimate tragedy. She promised so much in 2017, won the enthusiasm of so many, and ultimately failed to deliver.

She wasn’t transformational, but did some extraordinarily good things in two of the biggest crisis moments in Aotearoa’s modern history. Her commitment to fiscal orthodoxy and limiting the tax take to 30% of GDP, along with ruling out capital gains or wealth taxes, meant she could not achieve what she promised on housing, transport, climate change and child poverty. She ruled out so many pathways that there were few places for Labour to go with its reforming instincts. I think that is ultimately why she is leaving. I had a column written and unpublished on why should should retire now to open up pathways to reform. Some of it is repurposed here.

In the end, she deserves our utmost respect and thanks. She was instinctively extraordinary with her responses and leadership after the Christchurch attacks and the arrival of Covid.

Ultimately though, her innate conservatism, including on the issue of cannabis reform, means she will never be seen as a transformational Prime Minister. However, she was an extraordinary one who worked brutally hard for five years, sacrificed much personally and was both gracious and empathetic. In front of the camera, and behind. She certainly does not deserve the enmity of those who protested against her last year outside Parliament.

Out of not-so-clear-blue Napier sky

Ardern made the announcement shortly before the start of the Labour Caucus’ summer retreat strategy session in Napier, where it has been raining lightly. Here are the key segments from her resignation speech to a media conference in Napier.

“I am entering now my sixth year in office. And for each of those years, I have given my absolute all. I believe that leading a country is the most privileged job anyone could ever have, but also one of the more challenging. You cannot, and should not do it unless you have a full tank, plus, a bit in reserve for those unexpected challenges.
“This summer, I had hoped to find a way to prepare for not just another year, but another term - because that is what this year requires. I have not been able to do that.
And so today, I am announcing that I will not be seeking re-election and that my term as Prime Minister will conclude no later than the 7th of February. This has been the most fulfilling five and a half years of my life. But it has also had its challenges.” PM Jacinda Ardern

Ardern said she was not leaving because she thought she would lose the election and she was confident a new leader could lead Labour to victory in October.

“I’m not leaving because I believe we can’t win the election, but because I believe Labour can and will win it. We need a fresh set of shoulders for the challenges of both this year and the next three.
“As to my time in the job, I hope I leave New Zealanders with a belief that you can be kind, but strong, empathetic but decisive, optimistic but focused. And that you can be your own kind of leader - one who knows when it’s time to go.” Jacinda Ardern.

Ardern highlighted the personal toll of the job over the last five years.

“I know there will be much discussion in the aftermath of this decision as to what the so called “real” reason was. I can tell you, that what I am sharing today is it.
“The only interesting angle you will find is that after going on six years of some big challenges, that I am human. Politicians are human. We give all that we can, for as long as we can, and then it’s time.
“And for me, it’s time.
“I know what this job takes, and I know that I no longer have enough in the tank to do it justice. It is that simple.” Ardern

She said she had no plans beyond stepping down as Mt Albert MP in April.

“All I know is that whatever I do, I will try and find ways to keep working for New Zealand and that I am looking forward to spending time with my family again - arguably, they are the ones that have sacrificed the most out of all of us.
“And so to Neve, mum is looking forward to being there when you start school this year. And to Clarke, let’s finally get married.”

Ardern and partner Clarke Gayford leave the press conference. Photo: Getty Images

The mechanics and the details

Her office said in a statement Ardern would remain as the MP for Mt Albert through until April, which would mean there is no requirement for a by-election before the election. They can be avoided six months before a General Election.

The Labour Caucus has seven days to find a leader who holds more than two-thirds support within caucus to become the new Prime Minister. A caucus vote for a new leader will happen on Sunday, 22 January.

If no one receives two-thirds support within caucus, the leadership contest will go to the wider Labour membership. Ardern recommended to the Party that the process, if required, should happen no later than 7 February.

The Government’s intention is that Parliament will rise on Thursday, August 31 and Parliament will be dissolved on Friday, September 8. Writ day will follow on Sunday, September 10, with nominations closing at noon on Friday September 15. Advance voting will start on Monday October 2 ahead of the election on October 14, with the last day for the returning of the writ being Thursday November 9.

Robertson appears to rule himself out

Finance Minister and Deputy Prime Minister Grant Robertson said in a statement he would not be “putting myself forward to be a candidate for the leadership of the Labour Party.”

“In 2014 when I failed to secure the leadership of the Party for the second time I indicated that I would not put myself forward again. My position has not changed.
“I have been a close up witness to the extraordinary work that Jacinda has done as leader and Prime Minister. The level of intensity and commitment required of Prime Minister is an order of magnitude greater than any other role.
“It is a job that you must unequivocally want to do in order to do it the justice it deserves. I have every confidence that there are colleagues within the Caucus who are both capable of doing the role, and have the desire to take it on. They will have my full support.” Grant Robertson in a statement.

Robertson said he was committed to standing again at the election and serving in whatever role the new leader wanted him to undertake. He said he would “not be making any further comment on the leadership until the process has concluded.”

He paid tribute to Ardern, who he has been closely aligned with for their entire careers. He stood to be Labour leader in 2011 and 2014, winning the support of the caucus on both occasions, but losing to first David Cunliffe and then David Shearer in the subsequent votes by Labour Party members at large. Robertson stood with Ardern as his proposed deputy in 2014.

“It has been the honour of my working life to have supported Jacinda as Minister of Finance and as Deputy Prime Minister. Her intellect, judgement and empathy mark her out as one of New Zealand’s finest Leaders. I believe that history will judge her tenure as Prime Minister as a period where New Zealand not only weathered many storms, but also made huge progress in becoming a stronger, fairer and more inclusive nation. As a colleague, a friend and a New Zealander I am incredibly grateful for her service and commitment and wish her every joy and success in the future.” Grant Robertson

Luxon pays tribute to Ardern

Opposition Leader Christopher Luxon held a news conference this afternoon, also in Napier where the National caucus is also holding their summer retreat. He paid tribute to Ardern, but said it would not change National’s approach to the election. He said he texted her to thank her and wish her well.

“When I reflect, I think that the way she led New Zealand through the Christchurch terror attacks and the way we all felt proud of ourselves as a country and of her as our leader, and the way she has always been a good ambassador for us on the global stage, are things that will be really important in her legacy.
“It is a pretty difficult and demanding job, she has given it her all and we should thank her for her public service.
“For us, nothing changes from what we talked about this morning. The reality is New Zealanders want a government that is able to get things done and they want a government that is going to deal with the cost of living crisis, lift incomes for all, restore law and order and deliver better public health and education.” Christopher Luxon at a news conference.

So what happens now? And will it make a difference?

Everything is up in the air with no clear successor. A popular replacement with a new set of policies might have upset the trajectory of National and ACT, which at this stage appeared to be on track for victory, but there is no obvious candidate or set of policies beyond Ardern’s that are in prospect.

My current view is this cements the likelihood of a National-ACT victory on October 14, with no fundamental change in tax, Government spending or social policies, other than the reversal of Labour’s interest deductibility and bright-line measures, along with the truncation of Three Waters, the removal of the clean car rebate scheme and no follow-through on a levy on farm emissions.

From a purely political and financial view, it’s more likely to lower interest rates, increase residential land prices, increase net migration, increase nominal GDP, lower the Budget deficit, lower net debt-to-GDP, further restrict productivity growth, slow real wage growth and increase the emigration of young New Zealanders who come from renting families.

But many stranger things have happened. A week is a long time in politics. A few quiet weeks over summer turned out to be much more consequential for our political economy than we expected.

Or maybe not consequential at all.

In the long run.

Ka kite ano

Bernard

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