Labour leader Chris Hipkins says he would have sacked Shane Jones as a minister over the NZ First deputy leader's "knee pads" comments, but has stopped short of ruling out working with NZ First after the 2026 election.

Hipkins told the NZ Herald that Jones would be dismissed if he were a Labour MP and had made the remark (NZ Herald). Speaking to RNZ, he said that if he were in charge, Jones would have been sacked, and indicated he would set an expectation that all ministers uphold the standards in the Cabinet Manual — the rulebook that sets out how ministers must behave — with consequences for those who do not, in any coalition or support agreement Labour entered into (RNZ).

The controversy centres on comments Jones made on the Saturday before publication. Jones criticised supporters of the free trade agreement with India and said he would continue to "call out" the levels of Indian migration into New Zealand. He told other parties: "Labour Party, National Party, ACT Party, Green Party: the next time you go to an ethno-nationalist rally to receive a foreign leader, take off your knee pads. You represent the New Zealand Parliament" (RNZ).

Prime Minister Christopher Luxon called the comments "crass and unprofessional" and said it was up to Jones to be responsible for his own language. Luxon said he would have a conversation with Jones making it clear the comments were unacceptable (RNZ).

Jones has defended his rhetoric. In an earlier RNZ article published on 18 July, he positioned NZ First as "nationalist" and defended his comments about the India FTA and migration by saying "looking after our own people isn't racist" (RNZ). He previously compared the India FTA to a "butter chicken tsunami", prompting Luxon to describe his comments as "alarmist" (RNZ).

The India free trade agreement has been a running sore within the coalition. Labour's own positioning has shifted over time. In February, the party published a press release titled "India FTA must be for the good of New Zealand", with Hipkins saying: "We firmly believe in free trade, but our free trade agreements must not cause New Zealand harm" (Labour Party). By April, Labour confirmed it would support the deal, but warned businesses to proceed at their own risk and do their own due diligence (Labour Party). Labour also published a press release in February accusing Luxon of losing control of his coalition as it fractured over climate, referencing Jones in connection with disagreements over the India FTA (Labour Party).

On the coalition question, Hipkins is keeping his options open. NZ First has already ruled out working with Labour in 2026. Hipkins has not returned the favour. On the Tuesday before publication, he told RNZ he had ruled out working with NZ First at the previous election and that it was "highly unlikely" to change. But he also said there were "different permutations now" compared to six months earlier regarding potential coalition arrangements (RNZ).

Under New Zealand's MMP voting system, parties rarely win enough seats to govern alone, so smaller parties like NZ First can end up deciding which major party forms a government. NZ First leader Winston Peters has historically held that kind of kingmaker power, and whether Labour again shuts the door on a deal with his party carries weight well beyond the Jones controversy. Hipkins ruled NZ First out before the 2023 election. His refusal to do so again, even as he calls the party's deputy leader unfit for ministerial office, leaves a deliberate ambiguity.

The tension between Hipkins' condemnation of Jones and his hedged stance on NZ First as a potential coalition partner is the substantive political point. He is drawing a line on ministerial conduct while declining to draw one on the party whose deputy leader breached it. That is a calculation about leverage and flexibility heading into the campaign, and it leaves the final call for closer to election day.