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Nationals On Course To Lead Next Gov't As RBNZ Remit Reform Mooted


New Zealand's centre-right National Party leads opinion polling ahead of the 14 October general election, with market focus on comments from the Nationals' finance spox Nicola Willis to Bloomberg News on 21 August. Willis stated that if her party comes to power they would seek to swiftly remove the RBNZ's dual mandate to manage inflation and seek maximum sustainable employment, and instead return to solely focusing on the former.

  • Willis: "I can say that we’ll be moving to do that quite quickly on forming government. What we want to do is return to the conventional mandate that New Zealand had in place for many years whereby the inflation target was the key objective.".
  • Nationals leader Christopher Luxon has made headlines with his plans to boost infrastructure spending by NZD24bn (USD14.6bn) post-election with a focus on new highways and roads. Labour PM Chris Hipkins called the plans "la-la land dreaming", arguing that Luxon's sums fall far short of what would be required.
  • Opinion polling shows that the Nationals are on course to emerge as the largest party in the House of Representatives. However, the party looks set to fall short of an overall majority. This would require a coalition with the right-wing libertarian ACT.
  • Should the Nationals and ACT fall short of current expectations, the populist New Zealand First (NZF) could emerge as kingmakers. NZF have historically worked with both the Nationals and Labour in gov't, and so could swing the balance of power should they re-enter parliament.
Chart 1. Seat Projections based on Opinion Polling (Dashed line indicates 61 seats required for majority)

Source: Talbot Mills, Roy Morgan, Tazpayers' Union-Curia, Guardian Essential, Newshub-Reid Researhc, MNI

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