As the dust settles from Prime Minister Jacinda Ardern’s shock resignation in Napier on Thursday, the Labour Party will now turn itself to the task of electing a new leader.

Ahead of the vote, which will be taken on Sunday in Wellington, potential leaders will be hitting the phones, testing the numbers and making their pitches.

The clear devastation of caucus colleagues on Thursday will give way to jockeying for position as the caucus tries to settle on a consensus candidate they can unite behind, rather than having a divisive race that could leave scars.

"I'm taking this decision because I believe this team has the strength to lead us successfully through the next election,” Ardern said on Thursday.

"I have never led on my own. I have led with a strong, resilient, capable, intelligent team around me.”

But Labour was delivered a double-blow on Thursday. Not only did Ardern resign, but her heir apparent, Minister of Finance Grant Robertson, unambiguously confirmed that he would not seek the leadership.

He will, however, remain finance minister should the new leader wish to retain him.

“It is a privilege to be Minister of Finance. I recognise that as the country faces a challenging economic environment, experience, stability and continuity are critical. I remain absolutely committed to fulfilling that role, or any other one the new leader will ask me to undertake,” Robertson said in a statement yesterday.

Labour now needs to find someone within its ranks capable of facing up to the post-Covid economic difficulties the country faces, as well as reinventing the party for a post-Ardern world.

Of the potential candidates, the clear frontrunner – should he want it – has to be Chris Hipkins.

No-one else has the public name recognition that the former minister for the Covid-19 response has. He is also a centrist politician and further to the right of the Labour Party, putting him in a strong position to re-orient Labour to take on the economic challenges it will face this year.

He said he would indicate whether he would run “in due course”.

“I think I need to have a conversation with my colleagues. As do my colleagues need time to digest the news,” he said on Thursday.

It is difficult to see any other minister who would be able to match National's leader Christopher Luxon, who has proved a quick study over the past year. Ardern, a formidable campaigner, was one thing to face, but a new Labour leader will be quite another.

While politicians are usually prepossessed with a lot of confidence, there will be serious reservations within caucus about whether they do have the mettle to beat National in an election that will be fought partly on the economy and law and order.

Whoever emerges as a new leader will have their work cut out. New Zealand is dealing with significant challenges.

Chief among those are an inflation and capacity-constrained economy that needs more workers.

Falling house prices and rising interest rates will be key dynamics in this year’s campaign, as many people will be feeling the pinch of more expensive mortgages and less disposable income.

Working out a new way of talking about the economy and what Labour is going to do in the face of cratering consumer confidence and the highest food price rises in more than three decades will take considerable skill and must be top of the agenda.

Deputy Prime Minister Grant Robertson won’t be standing for the Labour Party leadership but will stay on as finance minister if the new prime minister wants him to.

Deputy Prime Minister Grant Robertson won’t be standing for the Labour Party leadership but will stay on as finance minister if the new prime minister wants him to.

The mini-spike in crime, shootings and ramraids will also need to be close to the top of Labour’s agenda. Luxon on Thursday pushed on the fact that under his leadership, that would not be accepted as the new normal.

Immigration – or the lack thereof – will be another important issue the new leadership will have to take on. Transport and Immigration Minister Michael Wood has often been talked about as a potential Labour leader but it is likely too early and his performance in his portfolios has been mixed – especially in transport – remember the abandoned harbour bridge crossing? He is also in an ‘industrial-left’ tradition, having shepherded Fair Pay Agreements through.

Justice Minister Kiri Allan – more of a left-field candidate – is also possibly too inexperienced, although she has an undoubted and charming combination of wit, humour and charisma. There’s every chance she will be part of a renewed leadership team.

And the party could do a lot worse than having a seasoned political operator such as Megan Woods somewhere on the top ticket.

Labour will also have to recalibrate its Three Waters policies as well as think seriously about its general rhetoric and positioning around co-governance.

If Three Waters has shown anything, it is that race is still a live issue in New Zealand politics, even if it seems to have laid dormant for years.

There is a needle that can be threaded by Labour that could see it with a political upside, but it will require the right leader, the right things to be jettisoned and a new, forward-looking narrative for this election year.

While sometimes it is a case of ‘better the devil you know’, for National’s Luxon, Christmas has come late this year.