Hipkins stays on as New Zealand Labour leader - for now


New Zealand Labour has endorsed Chris Hipkins to stay on as leader, despite the outgoing prime minister leading the party to an election defeat.

On Tuesday, the party's much-reduced caucus met in Upper Hutt, in Wellington's north, and endorsed Mr Hipkins to stay on.

They also elevated Carmel Sepuloni to deputy Labour leader, with Kelvin Davis standing down from the role.

Both leadership votes were uncontested.

Mr Hipkins cleared a 60 per cent confidence threshold to survive, as mandated by the party's rules, and Ms Sepuloni was nominated by Mr Hipkins and accepted unanimously.

"We are looking forward to the next three years in parliament," Mr Hipkins said.

"We'd rather be in government but clearly we have a job ahead of us and I know that people will certainly put their all into it."

The Wellingtonian inherited the Labour leadership from Jacinda Ardern in January and said that short spell in charge meant he still had a mandate to continue.

"We've only ... been in these roles effectively for nine months now (and) many of the seeds of our defeat were sown before we actually became the leadership team," he said.

"2023 was a tough election campaign for us and we'll take some time to digest the result and to reflect on that and to look at the reasons for that."

Mr Hipkins said the election loss cleared the party's policy slate clean, and the party would look to rebuild.

That means Labour is set for a bruising argument about tax - again.

One rumoured leadership rival, David Parker, resigned the revenue ministry in July to protest Mr Hipkins' decision not to take a beefed-up tax policy to the election.

Mr Hipkins opted against a wealth or capital gains tax, mimicking the position held by his predecessor Jacinda Ardern, after Mr Parker spent months working on tax options for the election campaign.

Labour went to the election instead with a policy to take GST off fruit and vegetables, a policy which gained little traction and was derided by economists.

On Tuesday, Mr Hipkins said he spoke to Mr Parker on Monday about his concerns.

"He indicated very clearly that he hadn't been doing anything around assembling numbers," he said.

Beyond the tax question - a policy area which has divided Labour for more than a decade - there is a broader question around Labour's future direction.

There are serious questions as to whether Mr Hipkins, as a defeated prime minister, can regain office for Labour in three years time.

Kiwis are positively disposed to the 45-year-old, with campaign polling showing he had better or similar likeability to incoming prime minister Chris Luxon.

However, Mr Hipkins has shown a lack of enthusiasm to fight on as opposition leader, leading commentators to assume he is a placeholder leader that will depart ahead of the 2026 poll.

Mr Davis said he would also depart prior to the 2026 poll, with Maori caucus leader Willie Jackson said he would consider it.

Finance Minister Grant Robertson is also likely to depart.

Amid the clear-out, there is no obvious contender to succeed Mr Hipkins should he go - another reason why the 45-year-old was endorsed at Tuesday's confidence vote.