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National
Jonathan Milne

Christopher Luxon promises a new day – well, he's got 100 of them

Photo: Getty Image

If National's vote share was to drop by just 0.3 percentage points relative to others, it would lose a seat and the razor-thin National-Act majority. We investigate the promises made, and the compromises still to be made...

 National will lead a new government, but it may be nigh Christmas before its precise shape becomes clear  With just a one-seat National-Act majority, Christopher Luxon is extending an olive branch to Winston Peters 567,000 special votes are still to be counted by November 3, which have previously favoured the Greens, Te Pāti Māori – and sometimes NZ First


Analysis: Today is Day Zero.

"New Zealand," says Christopher Luxon, "is going to wake up to not only a new day but a new government and the promise of a new future".

It's spring. The birds are singing, the lambs are gambolling, the All Blacks are warming up for today's match. You can almost hear Nina Simone's coffee-and-cream tones: "Oh, freedom is mine and I know how I feel, it's a new dawn, it's a new day, it's a new life for me..."

The country has got the Government that most voters wanted. But what today is certainly not is Day One of that new government.

With the slimmest possible election night majority for the National-Act bloc, it's not immediately clear that Luxon and David Seymour's dream of springtime marriage will come true; Winston Peters says it's not a marriage when there are three parties.

The Electoral Commission's deadline to count special votes isn't until November 3. Candidates in tight races have a chance to challenge the result, before the writ is returned on November 9.

That's getting very close to the Port Waikato by-election on November 25, which will deliver another seat to somebody – most likely National's Andrew Bayly, but other parties will mount robust challenges. The official results from that by-election aren't due until December 6. Candidates have until December 11 to challenge the result; only if there is no recount will the Electoral Commission return the writ on December 12.

READ MORE:Luxon: ‘Our children can grow up to live the lives they dream of’Bittersweet election night wins for GreensTe Pāti Māori rolls Labour in at least four seats * Charting Election 2023: Live results by the number

That leaves just seven days to finalise any last negotiations before the House is required to sit.

And as the Governor-General, Dame Cindy Kiro, said earlier this year: "Even if no new government has been appointed, I will still be required to deliver the Speech from the Throne, on behalf of the caretaker government. Parties will then have a chance to move confidence votes and test the support of the House for different governing arrangements."

Each one of these dates is another opportunity for Winston Peters to demand a place in a marriage that may become uncomfortably reminiscent of John Key, Richie McCaw and the International Rugby Board chairman's three-way handshake after the 2011 Rugby World Cup final.

(For far too many reasons, it seems unlikely Sam Cane and Luxon, sworn in as Prime Minister, will have the opportunity to shake on an All Blacks victory on October 29 of this year).

So as each of these Electoral Commission dates further protracts the timeframe before the shape of Parliament can finally be known, it begs the question: when will this Government begin to govern? When is Day One of Luxon's 100-Day Action Plan

It's little wonder that Luxon refused last night to commit to presenting his planned mini-budget before Christmas.

Days of thunder

It's likely that the final shape of the government will influence the shape of the legislative agenda. Luxon and the National Party have laid out their action plan – but what of Act's priorities? What of New Zealand First's priorities?

Their influence increases as Christopher Luxon's need for their support worsens. When the Electoral Commission finished counting yesterday's votes at 3 o'clock this morning, National and Act together had just 61 seats in a 121-seat Parliament. (Because Te Pāti Māori is tracking to win one more electorate seat than its party vote entitles it to, Parliament will have an additional "overhang" seat.)

Act would have to increase its vote share only 0.07 percentage points compared to other parties, to win a 12th MP. NZ First would have to increase its share just 0.23 percentage points to get its ninth list seat.

More worrying for National, if its vote share was to drop by 0.3 percentage points relative to others, it would lose a seat – and history shows National's share of special votes is typically lower than the share it wins on the day. Losing one seat would wipe out its razor thin majority and Winston Peters would have Luxon over a barrel.

So what parts of the 100-Day Action Plan might have to be on the negotiating table?

Tax and spending: National, of course, says it would instruct public sector chief executives to start identifying back-office savings and report their spending on consultants. But Act leader David Seymour doesn't beat about the bush: he wants 15,000 jobs cut from the core public service.

As a priority, National would remove the Reserve Bank’s dual mandate on managing unemployment down to sustainable levels, to ensure it's solely focused on putting the lid back on inflation. But Act also wants to impose greater urgency on the bank, by shifting the timeframe in which it restores inflation to 1-3 percent from the medium-term to the short-term. National's Nicola Willis has cautiously replied that that's not National's policy.

Much has been written and spoken about National's tax policy to slide income tax brackets and restore landlords' interest deductibility, funded out of optimistic expectations of big-noting foreign homebuyers and overseas online gambling operators queuing up to contribute to the public purse.

But while National plans to repeal the so-called 'ute tax' that funds the clean car discounts, and redirect all future emissions trading scheme proceeds to fund its tax bracket indexation so there's no political downside to a rising carbon price, Act has other plans: it would rebate the money directly to taxpayers in the form of a carbon tax refund.

NZ First also wants to move the income tax brackets but it would go further: it would legislate to make the lowest tax bracket (currently $14,000 pa) of income tax-free by April 2027.

There are other differences with NZ First, as well. National wants "more moderate" minimum wage increases, and Act would freeze the minimum wage entirely, at $22.70 for the next three years.

But NZ First says it's been "studying the Irish Celtic Tiger success", much like All Blacks coach Ian Foster perhaps. NZ First wants to lift the minimum wage to at least $25 an hour by allowing businesses a tax concession to do so.

Planning and infrastructure: On National's 100-Day Action Plan is repealing Labour’s Three Waters reforms, but its policy is almost entirely silent on what it would put in its place, and how that would be funded or financed. The essence is, it would return the assets to the control of the same councils that have failed to maintain them, pleading poverty, and challenge them to work together to find new financing solutions.

Act, by contrast, has won friends in local government by promising to share GST revenue with councils in order to fund infrastructure upgrades like drinking water and wastewater networks.

While all parties seem to have agreed for some years that the big, unwieldy Resource Management Act is not fit for purpose, both National and Act have flip-flopped on the merits of the Labour Government's reform solutions. They seem to have settled on repealing it – in the first 100 days, in Luxon's case – but, again, they don't have any clear alternative to set in place.

New Zealand First identifies only concern about the Labour-designed reforms: the party says they introduce the co-governance model into planning rules. It manufactures the spectre of "50:50 council/iwi planning committees" to decide how every private section can be modified or developed.

National and Act would both put an immediate end to work on the Lake Onslow pumped hydro scheme, an expensive $16 billion project to store away power for dry winters, in a high country lake. New Zealand First is silent on Lake Onslow; instead it would create a Ministry of Energy to actively investigate the potential of white hydrogen and reopening former coal mines, rather than importing inferior coal from other countries.

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