Jacinda Ardern thuds back to earth thanks to NZF's 'carefully generated torpedo' (CGT)

A humiliating defeat for Jacinda Ardern and Labour on the Capital Gains Tax is a reminder of how political power works and where the struggle for that power – and next year's election – really lies. Peters has swung the tax axe, with impunity

If not now, when? If not this, what? If not her, who? Those are the questions that must be bedeviling Labour and Green Party supporters as Winston Peters has not for the first, second or even third time, put his stamp of authority on this supposedly Labour-led government. New Zealand First has made it impossible for Labour and the Greens to pass even a fig leaf's worth of the proposed Capital Gains Tax (CGT), leaving Jacinda Ardern and her party looking timid and weak. 

Ardern has spent the month since the terrorist attacks in Christchurch at the centre of local and global attention, the darling of much of the western world. She has been a class act – widely admired and rightly wrapped in praise. Now, Peters has reminded her how power works.

Thud. Welcome back to earth, Prime Minister.

Who knew CGT stood for 'carefully generated torpedo'?

Sure, Labour can spin the line that 'Labour listens' and try to claim some initiative by Ardern's promise that there will be no new attempt to introduce a Capital Gains Tax while she's in charge (echoing the words of her predecessor Andrew Little). They can argue they have taken from National's hands the largest hammer the Opposition had to whack them with. Whatever helps them sleep. They are hollow words.

Labour has campaigned on a CGT in every election since 2011. More than that, Norm Kirk's Labour government introduced a 'speculation tax' back in 1973. This policy runs deep. The evidence is clear that while it's no panacea for poverty and comes with fishhooks, it does reduce inequality. As Labour has argued for years, New Zealanders will not get rich selling houses to each other and government needs to incentivise people to invest in things other than 'bricks and mortar'. All those arguments are now as ashes in their mouths

A CGT is not some perfect system, but it is fairer, redistributes wealth and invesment, boosts younger New Zealanders on average at the expense of older generations (yes, there's a whiff of Brexit in all this), and the tax cuts that would have followed would have been targeted at the poorest New Zealanders. The next time New Zealand First tries to campaign on caring for the least of these, that should be remembered.

Not that Peters cares about that when he can deny Ardern at will and keep his older voters happy at the expense of the young.

National Party leader Simon Bridges hit the nail on the head when he said, "At the apex of her power she hasn't been able to deliver".

And that is truly remarkable. She didn't deliver what Labour wanted. She didn't get even a compromise version. She got nothing. Zip. Nada. Nil.

What good is power if you are unable - or too cautious or too timid or not savvy enough - to wield it? If Ardern can't stare down or cajole Peters now, with the world at her feet, voters are left to assume she will never be able to. And if she is not able or prepared to go to the wall for a policy like this – a Labour passion and bugbear, something she made a 'captain's call' on, a policy with inter-generational ramifications – then what will it take?

Even at the 'apex of her power', Peters has made Ardern and her party look weak. Again. Remember the rug being pulled out from under three strikes, the industrial relations reform, the refugee quots and the fact Shane Jones seems to be able to act with impunity. This is not merely 'MMP at work'; there is a pattern of political abuse here.
I'm not sure if 'bullying' is the right word; Peters is using his numbers. But if this is a friendship, it's an unhealthy one. If this was one of my children's school friends, I'd be advising them to find a new friend. Sadly, Labour doesn't have that luxury. The choices are few. 

This is why some National Party supporters and MPs were telling themselves after the 2017 election – as they rocked back and forth and sucked their thumbs – that 'at least we won't have to work with him'. As with Labour, whatever helps them sleep.

On the other side, Labour supporters may say 'just wait until the election' and 'we'll take our revenge by leaving Peters out of any second term'. This, however, is a reminder that a Labour-Greens government will be an incredibly hard trick to pull off.

The very things that motivates Labour to win without Winston in 2020 are the very things that make that less likely.

Indeed, this sort of stunt by New Zealand First is the party's platform for 2020. 'Look at what Labour and the Greens would have done without us', the election ads will say. 'You need us,' the billboards will scream: 'I kept the bastards honest'.

And if you're thinking Peters may be at risk of over-reaching, here's the bitter irony for Labour: Ardern's own unassailable popularity is exactly what gives Peters such a free hand. In a tighter race, New Zealand First might need to show more discipline, a more united front. With Labour the hottest of hot favourites to win again next year, Peters can play. He can do what he does best. He can be confident Labour won't call his bluff.

It was summed up in one grab on Newshub tonight.

When Newshub's Political Editor Tova O'Brien asked, "Is New Zealand First the most powerful party in this government?", note how Peters replied, "next question". He can deny any power plays point blank because it's enough the question is asked.

He knew by instinct that a seemingly grumpy, succinct reply would make the six o'clock news, so hundreds of thousands of viewers would be left in no doubt where the power lies.

It's not with Labour. It's not with Ardern. As it stands she is unable to deliver the "transformational" government she promised. The question now is whether she can wrestle some of that power back. And what issues, if any, will she go to the wall on. The most fascinating power struggle over the next 18 months – even more compelling, perhaps, than any forthcoming struggle for the leadership of National – will be the one between the Prime Minister and her deputy.