Nearly six weeks after New Zealand’s general election, the incoming prime minister, National’s Christopher Luxon, has announced the shape of the governing coalition with the libertarian Act and populist New Zealand First parties.
Luxon told a media conference in Wellington on Friday that the three parties had agreed on a “common sense” plan that reflected their values and policies.
“We want change that makes our great country even better and this coalition government is going to deliver that change,” he said.
After a signing ceremony at parliament on Friday, Luxon said the role of deputy prime minister would be split between the populist NZ First party leader, Winston Peters, and the Act party leader, David Seymour. Peters will take the role for the first half of the term, and Seymour will go second.
National party deputy leader Nicola Willis would be finance minister and Peters would be foreign minister, the three parties said in a joint statement.
The coalition revealed a series of policy changes, including narrowing the remit of the Reserve Bank Of New Zealand.
Luxon said the government would amend the Reserve Bank of New Zealand Act 2021 so that the Reserve Bank focuses solely on keeping inflation low, rather than its current dual mandate to keep low inflation while maintaining maximum employment.
Seymour said: “The Reserve Bank will be properly focused on doing the job it should have been doing for the past three years.”
The coalition has also said it also repeal a ban on offshore oil and gas exploration that was introduced by the previous Labour government.
On 14 October, the centre-right National party beat the centre-left Labour party, winning a razor-thin majority to govern in a coalition with Act. That majority disappeared once additional voting results were announced three weeks later, forcing National to rely on a third party, New Zealand First, to reach the 61-seat majority needed to form a government.
The country had been in political limbo for weeks, as the three party leaders shuttled between upmarket Auckland hotels to conduct negotiations. It is the second-longest period of negotiations under New Zealand’s mixed-member proportional (MMP) voting system, the first being in 1996, when New Zealand First was also kingmaker and took two months to make a deal.
It is the first time in New Zealand’s history that three parties have formed a coalition. It will be the third time Peters has held the coveted role of deputy PM.
There is significant speculation over how National will manage the policy priorities of the minor parties, particularly those of New Zealand First.
For example, National has campaigned on allowing foreign buyers back into the housing market, to help pay for its proposed tax cuts, but New Zealand First said it was flatly against it. In the end, National abandoned the policy.
One of Act’s major policy priorities is holding a referendum to redefine the Treaty of Waitangi, New Zealand’s founding document signed by more than 500 Māori chiefs and the British crown. Act did not manage to secure a referendum in the negotiations, but a path has been left open for it to propose a treaty principles bill, which will open up a forum for discussion of the topic.
National said it would not guarantee support for it beyond advancing a bill to its first reading, which would put the referendum’s fate in the hands of ministers.
“Seymour succeeded in getting his national debate [on the treaty] so he will consider it a win,” said Ben Thomas, a political analyst, adding that a referendum would cause political chaos.
The coalition has also agreed to review all legislation – apart from treaty settlement acts – to remove references to “the principles of the Treaty of Waitangi”.
Meanwhile, National has appointed Paul Goldsmith as treaty negotiations minister. Goldsmith sparked a public backlash in 2021 after he made comments that “on balance” colonisation had been good for Māori.
During coalition negotiations, National adopted an Act policy to create a new agency, the ministry for regulation, to examine new and existing regulations, with the aim of reducing red tape.
National also adopted Act’s policy to review gun regulations, including reviewing the effectiveness of the firearms registry.
The outgoing prime minister and leader of the opposition Labour party, Chris Hipkins, said the coalition agreements would lead to a more polarised and divided New Zealand.
Hipkins said the coalition agreements prioritised millionaires with policies that would gut employment protections and drag down wages, which would leave workers worse off.
Andrew Geddis, an expert in electoral law from the University of Otago, called the agreement to share the deputy prime minister role “creative”.
“It strikes me as a probably fairly logical follow-on from the fact this is our first three-way coalition agreement,” he said.
The agreements were a “lawyer’s delight” due to the heavy details and apparent contradictions, Geddis said. For example, National promised New Zealand First an independent and urgent inquiry into New Zealand’s Covid response. But Act’s agreement with National promised only to broaden the terms of the current royal commission.
The parties have also agreed to reinstate the controversial “three strikes” law, which forces judges to automatically give a maximum sentence to any criminals who had committed three serious offences. Other polices agreed include reduce spending in the public sector, bringing back no-cause evictions, which would allow landlords to evict a tenants without reason, and allowing pseudoephedrine back into cold medication.
With Reuters
