[1/2]National Party leader Christopher Luxon waves to supporters of his electoral party after winning the general election to become New Zealand’s next prime minister in Auckland, New Zealand, October 14, 2023. Portal/David Rowland/ File Photo acquire license rights
- National, ACT NZ, NZ First signs agreement to form government
- The government will return the central bank to a single inflation targeting mandate
- The government plans to restrict the use of indigenous languages and affirmative action
WELLINGTON, Nov 24 (Portal) – New Zealand’s National Party sealed an agreement on a new three-party coalition government on Friday, after lengthy negotiations over ministers’ roles and policies, including indigenous rights, tax cuts and changes to the central bank.
The center-right Nationals party, led by new Prime Minister Christopher Luxon, along with the populist New Zealand First Party and the libertarian ACT New Zealand, are returning to power after six years of governments led by the left-leaning Labor Party became.
“We believe in this country, we are ambitious and we know that together, with the right leadership, the right policies and the right direction, we New Zealanders can make this country an even better country,” Luxon said in a speech ahead of the formal signing of the agreement in Parliament.
The coalition agreement sets out plans to restrict the use of the Maori language, review funding policies and assess the interpretation of the country’s founding treaty document in legislation. However, a controversial proposal to hold a referendum on the interpretation of the document, the Treaty of Waitangi, will not be implemented.
Outgoing New Zealand Labor Prime Minister Chris Hipkins said the policy changes would reverse progress on Maori issues.
“This is certainly a step backwards of three or four decades,” he said.
Luxon, 53, said the government would also amend the Reserve Bank of New Zealand Act 2021 to remove the dual mandate on inflation and employment and focus monetary policy only on price stability.
ANZ economists said in a note that the proposed changes to the monetary policy framework “could be seen as restrictive” on the sidelines, but other announcements do not appear to bring decisive changes to the macroeconomic policy framework.
There are also plans to lift a ban on offshore oil and gas exploration introduced by the previous Labor government, as well as a ban on the sale of cigarettes to future generations, according to coalition documents.
The new government will cut income taxes, continuing campaign policies aimed at wooing middle-income voters struggling with rising costs of living.
However, plans to open New Zealand’s property market to foreign buyers and tax those purchases to fund the tax cuts have been shelved.
“Providing tax relief is just part of the government’s plan to rebuild the economy. “The Government will lower the cost of living, reduce wasteful spending and stimulate economic growth to increase opportunity and prosperity for all New Zealanders,” Luxon said.
The parties said they plan to “rewrite the gun law,” without giving further details, and would conduct a review of the gun registry introduced after a gunman killed 51 Muslim worshipers in 2019. The parties would call for 500 new police officers.
MIXED BAG
Parties on the political right grew in popularity last year, and frustration with the ruling Labor Party grew. Charismatic former prime minister Jacinda Ardern had become a favorite in progressive politics around the world, but domestic anger had intensified over tough COVID restrictions and the rising cost of living. Ardern resigned in January.
Luxon, the former CEO of the national airline, only entered parliament in 2020 and became leader of the National Party at the end of 2021.
The new coalition cabinet, which will be sworn in on Monday, is a combination of experienced politicians and new leaders.
The role of deputy prime minister, a key sticking point in coalition negotiations, will be split between NZ First leader Winston Peters and ACT leader David Seymour.
National Party deputy leader Nicola Willis will become finance minister and Peters will become foreign minister, the parties said.
Peters – a colorful populist figure in his late seventies – will take over as foreign secretary for a third time, having served in Ardern’s Labor-led government in 2017 and alongside Labor Prime Minister Helen Clark in 2005.
“Foreign affairs is important to this country… all relationships are important to this country,” Peters said in a joint news conference in the capital Wellington after the announcement.
“We expect the Chinese government to treat us equally regardless of our size,” he said when asked how he planned to deal with China’s growing influence in the region. “Size doesn’t matter, respect does.”
Reporting by Lucy Craymer and Lewis Jackson; Writing by Praveen Menon; Edited by Diane Craft and Lincoln Feast
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