Luxon Announces Coalition Deal Ushering in New Government

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Luxon Announces Coalition Deal Ushering in New Government

After a month of negotiations, New Zealand’s political parties have finally reached a coalition agreement, marking the end of the Labour Party’s six-year reign. Christopher Luxon, David Seymour, and Winston Peters fronted media at an 11am conference Friday where the three musketeers gave “a flavour” of the policies to come. Indeed, the new government will be led by the centre-right National Party, with support from the ACT and New Zealand First parties to help shape the nation.

The formation of the new government is a significant event in New Zealand’s political landscape. The coalition deal between the National Party, ACT, and New Zealand First is a major development and is expected to have a significant impact on the country’s direction. It’s the first three-way coalition deal in MMP history in New Zealand. Only time will tell whether the new government will be able to deliver on its promises.

NZ First leader Winston Peters and ACT leader David Seymour will split the role of deputy prime minister, serving 18 months each. Winston Peters insisted at the Friday conference that they were not co-deputies, simply halving the role instead.

The coalition parties have agreed to wide-ranging changes to the position and impact of Te Tiriti o Waitangi, including eliminating references to its “principles” from legislation and asking Parliament to consider whether to hold a referendum to redefine its principles.

Further, New Zealand First has thwarted the National Party’s plans for a foreign home buyers’ tax and an increase in the retirement age.

The Key Highlights of the ACT and National Agreement

In their agreement, ACT and National have agreed on several key policy points. Firstly, the coalition has agreed to back ACT’s Treaty Principles Bill for the first reading in Parliament. This bill, aimed at redefining the principles of Te Tiriti o Waitangi, will be presented for public submissions.

The agreement also outlines the creation of a new ministerial portfolio for regulation. This will be supported by a new government department dedicated to assessing the quality of new and existing legislation and regulation. The department will be funded by disestablishing the Productivity Commission and consolidating regulatory work across the public sector where necessary.

The Reserve Bank’s remit will be narrowed, with a focus on price stability. Advice will also be sought on replacing “medium term” with specific time targets. Changes to firearms laws are also on the agenda, with the Arms Act 1983 set to be rewritten for “greater protection of public safety”.

ACT’s leadership have been appointed to several ministerial roles. David Seymour will serve as Deputy Prime Minister (from 31 May 2025), Minister for Regulation, Associate Minister of Education (Partnership Schools), Associate Minister of Finance and Associate Minister of Health (Pharmac). Other ministers include Brooke van Velden, Nicola McKee, Andrew Hoggard, Karen Chhour, and Simon Court.

The Key Highlights of the NZ First and National Agreement

The coalition agreement between NZ First and National has its own set of unique policy points. The coalition has committed to reviewing all legislation to remove references to “the principles of the Treaty of Waitangi” from law. These references will be replaced with specific words relating to the relevance and application of the Treaty, or repealed altogether.

NZ First has also secured an independent inquiry into the Government’s Covid-19 response. The coalition is set to establish a “full-scale, wide-ranging, independent inquiry” urgently.

The coalition agreement also includes tax relief as set out in National’s Tax Plan, but will not include a repeal of the foreign buyer’s residential property ban, with income tax reductions coming into force from 1 July 2024.

NZ First’s leadership will also take on several ministerial roles. Winston Peters will serve as Deputy Prime Minister (until 31 May 2025), Minister of Foreign Affairs and Minister for Racing. Other ministers include Shane Jones, Casey Costello, Mark Patterson, and Jenny Marcroft.

Implications of Luxon Coalition Deal

The formation of this coalition Government represents a new chapter in New Zealand’s political history. It will be interesting to watch how these agreements unfold in terms of policy implementation and governance.

Overall, the formation of a new government is a time of both hope and uncertainty. It is important to remember that the new government will need time to find its feet and to start to implement its policies. It is also important to give the new government a chance to prove itself before making any judgments about its performance.