Economy Focus Of New Government

The new centre-right coalition government, made up of three parties, has been sworn in and started implementing its policy agenda. Most of the National’s 100-point economic plan was agreed to including income tax cuts. The RBNZ is going to be watching fiscal policy closely as lower taxes add to demand but all three parties also campaigned on tighter fiscal policy.

• Nationals leader Luxon is PM and he’s stated that the top priority is to “fix the economy”. NZ First’s Peters is deputy for the first half of the term followed by ACT’s Seymour for the second half. The finance portfolio has gone to the Nationals.
• NZ First won a commitment to leave the pension age unchanged, to investigate the pandemic response and for $1.2bn of regional infrastructure spending, according to RNZ.
• The Nationals were unable to convince the other parties to implement its policy on foreign purchases of residential dwellings. It said the additional revenue will be made up for through spending cuts.
• Other initiatives include a referendum on increasing the parliamentary term to 4 years, repealing the Three Waters and Resource Management Act reforms, public sector spending cuts worth an additional 6.5% of current expenditure which are likely to include job cuts, and allowing oil & gas exploration.