Budget ’25 was carefully crafted to provide a platform that places Labour in an extremely difficult position if it is to satisfy its core constituency and attract sufficient new voters to move beyond the constraints imposed by association with the Greens and Te Pati Maori (TPM).

Without comprehensive increases in taxation it is hard to see how it can restore, as some of its MPs have promised, the pay equity position that existed before budget month and at the same time assemble a prudent balance of expenditure that doesn’t add significantly to the nation’s indebtedness.

Within the ruling coalition, National received criticism for not taking bolder steps to address deficit spending. Act members had a similar view to National’s right flank. NZ first voters seemed satisfied that Winston the Wily had again pulled a rabbit from a hat and had a budget presented that mostly satisfied their middle of the road instincts.

Public opinion polls regularly reflect that the most pressing public concerns are the economy, health, education, law and order. All these itches were scratched: the economy through a better depreciation regime for business capital spending; both the health and education sectors had bigger financial allocations; and police and the defence force needs were catered for with fresh funding.

The coalition parties are broadly in political control. Should a backlash on the pay equity decision prove ongoing in the early months of next year, Budget ’26 can address it. Should unemployment be on the rise, room can be made for measures to alleviate it. And while constant sniping by health and education unions within the public services is certain to continue, the government can emphasise that funding continues to rise year-on-year despite tough economic times.

Labour’s path to the Treasury benches is fraught with obstacles. Since budget day Peters has ruled out joining with Labour to make a government as long as Chris Hipkins is leader; TPM and the Greens have shown no sign of easing their rhetoric to attract wider support outside their core constituencies; and acceptance of budgetary restraints by finance spokesperson Barbara Edmonds places constraints on what it can offer unless significant tax increases are a part of its election policy.

Localised rows over government spending, such as the NZTA cost savings amendments to the projected Otaki-Levin highway, will help Labour, and test the coalition’s responsiveness. Growing impressions across the country that the coalition feels it can brush off community feelings with impunity can quickly erode the support of all three member parties.

Labour needs a change in apparent public acceptance of the need for careful fiscal management as under the Willis model. It would also be helped by developments abroad that thrust security issues much higher into public consciousness than has happened to date.

At the centre of this is divergence of views among the country’s Western allies on the handling of Russia’s war in Ukraine and America’s trade war with the EU. Currently the coalition is maintaining its relationship with Washington along “business as usual” lines that encompass the universal 10 percent tariff regime.

Neither New Zealand nor Australia have suffered direct unwelcome policy pronouncements of substance from the US president, although the Australian defence force is nervous about the Americans’ timetable for supply of nuclear submarines under arrangements with Canberra.

But should President Donald Trump decide to take the US out of the allied front against Russia over its invasion of Ukraine, and at the same time seek closer business ties between Washington and Moscow, there will be “diplomatic blood”.

There is good reason to believe that Trump is breaking down the strengths of American economic might and muscle through his fixation with tariffs on friends and competitors alike. These imposts and daily, weekly percentage changes disrupt supply chains and create uncertainties.  Forced reductions of research and development programmes, including those associated with technologies, contribute further to the picture of an America in decline.

It may be that Trump sees both big business opportunities in Russia and an opportunity for a political initiative that will wrest Moscow away from its close relationship with Beijing. But achieving such a transformation at the expense of the Western European alliance committed to resisting Russian hegemony is more likely to strengthen Beijing’s influence in the West and Third World.

Do Kiwi voters have the stomach to outlast the four-year Trump presidency? Can Labour exploit unease about American reliability to electoral advantage? Historically it has a record of burnishing Sino-Kiwi relationships that could be the basis of electoral appeal if strategic security becomes a major issue.