GUEST BLOG: Pat O’Dea – Class War: Leadership Counts
Class War: Leadership Counts
There are tens of thousands of people in New Zealand without secure housing. Over 150,000 children live in material hardship. Food bank use is rising. Wages lag. Public services are stretched thin.
Against this backdrop, Labour leader Chris Hipkins says we must wait. Wait for the Budget. Wait for the numbers. Wait before promising change.
But politics does not happen in a vacuum. Around the world, governments facing similar pressures are choosing sides. Some cut first and let working people carry the cost. Others ask those with the most to contribute more. The difference is leadership.
The Crisis Is Not Abstract
New Zealand’s affordability crisis is already here.
According to figures cited by Martyn Bradbury from the Salvation Army’s State of the Nation report:
43,500 people are in severe housing deprivation
Transitional housing placements have fallen while housing support funding was cut by $80 million
Over 156,000 children live in material hardship
Food parcel distribution rose 7% last year to more than 90,000 parcels
Māori and Pacific unemployment remains far higher than the national average
Domestic violence is rising
As Bradbury put it: “These people don’t have time for incremental policies.”
Yet Labour’s response, articulated by Chris Hipkins, is to “not overpromise” and wait for the Budget before offering solutions.
The question is simple: how long are people meant to wait?
Austerity by Design
Labour MP Kieran McAnulty has drawn a direct line between government decisions and rising homelessness: emergency housing has been deliberately restricted to cut costs.
The savings — roughly $1 billion — conveniently match the government’s stated spending reductions.
In other words, people sleeping on the street are paying for the Budget.
The Global Choice: Cut or Tax
Around the world, governments facing fiscal pressure are making starkly different choices.
Argentina: The Chainsaw
President Javier Milei’s answer to crisis has been austerity:
Slashing education, health, and pensions
Cutting infrastructure and subsidies
Weakening labour protections
Laying off tens of thousands of public sector workers
Supporters credit him with lowering inflation. For working Argentinians, life has become harder. Strikes and protests have followed.
This is one model: cut services, weaken labour, and let working people absorb the pain.
New York: A Different Direction
New York City faced a reported USD $12 billion budget deficit. The orthodox response would be cuts, wage freezes, and layoffs.
Instead, Mayor Zohran Mamdani has argued for taxing wealth.
New York City doesn’t control income tax rates — that power sits with Governor Kathy Hochul — but Mamdani has publicly pressed the case: before cutting services or wages, ask those at the top to contribute more, and he has been successful.
So far, his administration has:
Strengthened rent protections
Backed workers in labour disputes
Built close relationships with unions
Pushed the state to fund free childcare
The principle is clear: exhaust wealth taxation before austerity.
New Zealand at the Crossroad
New Zealand faces the same choice as Argentina and New York.
Housing costs are high. Public services are stretched. Tens of thousands are leaving for Australia in search of better wages.
When deficits appear, governments can:
Cut services
Suppress wages
Weaken labour protections
Or they can:
Tax wealth
Protect public services
Invest in affordability
New Zealand is not poor. In fact, it has more millionaires per capita than New York City:
NYC has 384,500 millionaires supported by 8.4 million people
NZ has 340,000 millionaires supported by 5.3 million people
The money exists. The question is political will.
Leadership Counts
Argentina shows us what austerity looks like.
New York is testing a different path.
The direction New Zealand takes will depend on leadership — and on whether organised working‑class pressure forces that leadership to act.
If the centre‑left offers only caution and constraint, voters will look elsewhere. As Bradbury warned, when the left fails to materially improve living standards, people drift toward culture‑war opportunists.
The US offers a cautionary tale: a Democratic Party that rejected redistributive politics and repeatedly chose “safe” centrists over Bernie Sanders paved the way for Donald Trump — twice.
That dynamic is not unique to America.
The Risk Ahead
Labour is right not to promise what it can’t deliver. But refusing to debate wealth taxation at all is not realism — it is retreat.
A credible alternative path exists:
Fully cost an alternative Budget
Commit to properly funding public services
Stem the exodus of nurses, doctors, and skilled workers
Then be honest about the modest tax increases on wealth required to pay for it
In New York, Mamdani’s team calculated that fully funding his affordability agenda required only a 2% increase on taxes paid by the wealthy.
If, by the next election, Labour under Chris Hipkins still refuses to tax the rich or meaningfully tackle affordability, the electorate will not reward restraint.
They will punish it.
And the next government that follows will be far worse than the current one.
Pat O’Dea is a trade unionist and human rights activist.
