Analysis – The Covid-19 pandemic put Jacinda Ardern’s leadership to the test, and Chris Hipkins’ handling of the recovery from Cyclone Gabrielle will do the same.
Unlike Ardern, who had years to prove herself, Hipkins will have to do so in a matter of weeks or months.
One of New Zealand’s worst natural disasters has befallen him, causing widespread destruction of buildings and property and wiping out entire communities.
This week, the rescue mission continued as an emergency operation in which people needed to be rescued, kept safe, and fed and watered.
The focus will then move to the costly and lengthy recovery process.
Hipkins and his top cabinet aides have performed admirably thus far. This includes Emergency Management Minister Kieran McAnulty, Energy and Resources Minister Megan Woods, and Communications Minister Ginny Andersen.
Hipkins has been front and centre from the very beginning. On Saturday he arrived in Auckland, and he remained there through the cyclone.
Christopher Luxon, leader of the National Party, left to return to Wellington in time for the start of Parliament on Tuesday, which lasted only a few hours before being adjourned until next week per a decision by the cross-party business committee.
Hipkins has taken the lead in this crisis by providing briefings and touring the flooded East Coast on Thursday and Friday.
Another minister, Finance Minister Grant Robertson, will play a pivotal role during the recovery period.
He will have to come up with the cash, and he probably won’t be stingy about it.
There is a possibility that the final price will be extremely high.
According to Christoph Schumacher, a professor of innovation and economics at Massey University, the cyclone could end up costing the country tens of billions of dollars based on the costs of similar events in other countries.
Schumacher acknowledged that “damage” existed, focusing solely on the expense of restoring what had been destroyed.
“However, the loss of national productivity, the closure of businesses that cannot sell their products, and the inability of many people to get to and from work would all have an adverse effect on the economy.
“The GDP and our output will both suffer as a result. That’s not going to end anytime soon; in fact, it’s going to go on for months.”
Hipkins is unlikely to worry about political repercussions if he gives Robertson free reign to spend money on the recovery.
It would be counterproductive for the nation to criticise the spending that is helping businesses, farmers, and families recover. It might find minor fault with the delivery method, but that’s probably all it’ll do.
The Treasury is already onto it.
On Wednesday, the Herald reported that Treasury Secretary Caralee McLiesh testified before the House of Commons’ Finance and Expenditure Select Committee.
She informed the committee that the Treasury anticipated a “very significant cost” to the government due to losses in assets and infrastructure.
She said economic support would also come at a cost, listing Civil Defence payments and small business support.
McLiesh refused to provide a precise figure, saying instead that the Treasury was working on it.
“We have stood up a team within Treasury and our role is to assess the impact,” she said. “It’s an unprecedented and evolving situation.”
“The full economic and financial cost will take some time to realise.
We anticipate that lost capital and economic opportunity will account for the bulk of the economic costs.
She predicted an immediate impact on GDP as a result of the resulting disruption to the agricultural sector, the tourist industry, and the service sector.
However, reconstruction after the floods had subsided would likely have a positive impact on GDP, with rebuilds counted as economic activity.
Hipkins and Labour stand to gain politically if the government succeeds.
According to Claire Trevett, political editor of the Herald, “almost any natural disaster will render the opposition irrelevant – unless the government bungles the handling of the disaster.”
To paraphrase Winston Churchill: “Even then, the opposition won’t necessarily be thanked for wading in to criticise it instead of being constructive – at least while the emergency is underway.”
According to Trevett’s analysis, the government hasn’t made any obvious mistakes so far. Hipkins and the Minister of Emergency Management, Kieran McAnulty, “have been all over it so far.”
Luke Malpass, the political editor at Stuff, said that Hipkins had been excellent and had stayed on top of his brief, but that McAnulty had managed to divert his focus.
Malpass has commented that “it is McAnulty, the cabinet neophyte whose performance is really impressing.”
“McAnulty’s steady guidance has made a positive difference. Detailed, well-organized, and easy to understand. And he’s someone who knows, deep down, that it’s important to be humble when interacting with the general public; he comes off as genuine.”
He brought Woods and Andersen with him on Wednesday to explain the ongoing power and phone outages and the steps being taken to fix them.
Since he oversaw the Covid-19 response, he has extensive experience in crisis management and is likely aware of what Trevett wrote in her article: “One lesson learned from Covid-19 is how quickly people can turn to anger once the shock and coping with the initial emergency is over.”
We can already see the signs of frustration. There have been reports of frustration in Gisborne due to the inability to charge phones or use ATMs.
The old adage that “a week in politics is a long time” proves true remarkably often.
A week ago, the government’s attention was laser-focused on a single issue: the cost of living.
To get his Cabinet’s full attention on dealing with a crisis that could decide the outcome of the election, Hipkins had announced a set of policies that he was scrapping or putting on hold.
This week, however, he is focusing on a different crisis that is just as likely to affect the election: the aftermath of a natural disaster.
For the next few months, Hipkins will be responsible for both of them simultaneously.