Kiwis voted for a right-wing Government – now they will get it

Friday, 24 November 2023

The incoming prime minister, alongside ACT leader David Seymour and NZ First leader Winston Peters, has unveiled the coalition agreement between the three political parties.

Luke Malpass is political editor.

OPINION: When New Zealanders tossed Labour out, they tossed them out hard. Labour went from over 50% of the vote to just over 26%.

From being the sole party of government, it had its vote halved. The centre-left, as defined by the combined votes for Labour and the Greens, was a bit over 37%.

Now we have taken a look behind the deal between National and ACT and NZ First, one thing is for sure. Those who voted for change are going to get it good and hard.

In a broader cultural sense, Christopher Luxon will lead the most right-wing government in a long time. Not necessarily on the economic-reform side as traditionally understood, but as a shared general world-view.

That is because it is reflective of three men who believe that the fundamental thrust of New Zealand government has moved from what the state is good at or should appropriately do, to a whole bunch of things that sit on the periphery of most people’s concerns.

As an upshot of that, the public service is now likely to be focused more on what Chris Hipkins called bread-and-butter issues.

In education, there will be a focus on the basics. In law and order there will be tougher sentences, more funding for Corrections and a harder line taken on crooks. In the public service, spending will be clamped down on. The emphasis on Māori names and language will take a back seat to core competencies.

Prime Minister Chris Luxon, David Seymour, and Winston Peters announce that they are in coalition together, and formally sign the documents.

In fact in no areas will there be more change than around the Treaty and co-governance. While there won’t be a referendum on the principles of the Treaty as ACT wanted, the principle will begin to be scrubbed out of legislation, as NZ First wanted.

In many areas of the public sector where having regards to the Treaty has often been a key consideration, that will now change.

The Minister for Climate Change is outside Cabinet, while Shane Jones, who takes on the job of Minister for Resources (read extractive industries such as mining, and oil and gas) is inside Cabinet.

It is a Government that, if it functions properly, will change the country. Whether you think that’s a good thing is another matter.

The word used the most for the coalition negotiations was “robust”. In other words, there were right barneys over various areas of policy, but it landed in a place where all three parties were happy. One soon to be Cabinet minister described the process to me as “cathartic”.

There is little doubt, based on these detailed documents with a concrete series of actions and plenty of aspirations for direction of travel, that a lot of issues have been duked out behind closed doors.

Winston Peters looks on during questions during the coalition announcement.

The circular nature of the deal is such that all parties have signed up to everything within it. There is enough in there for two terms of government. The theory is that there will be little room for disagreement because there’s a lot on the lists, and that ministers will now be able to crack on and get into it.

The day-to-day management of this Government will still be the most challenging thing. How issues will be dealt with and responded to in real time. But the hope – maybe realistic, maybe naive – is that the framework will give a good start.

Winston Peters and David Seymour will take turns as deputy prime minister: Peters for the first 18 months and then Seymour for the second 18 months. Experience from Peters to get the show on the road and then Seymour gets his turn. It’s an elegant solution to a problem that threatened to derail the talks at the last minute.

If this document is anything to go by it will be a Government of fiscal consolidation, not one of overhaul.

While ACT wants to slash spending and NZ First also believes it must come down, the latter’s priority is on its pending projects, namely its new regional infrastructure fund.

Meanwhile Winston Peters’ appointment as foreign minister will be celebrated in the halls of the Ministry of Foreign Affairs and Trade, and among New Zealand’s allies and security partners. There has been real concern about drift in New Zealand’s foreign policy, which many in the foreign affairs club are hoping will be remedied.

The Reserve Bank will be pulled back to a single policy mandate (price stability) and the Governor will be given a set time frame to get prices under control, rather than the vaguer “medium“ term that is currently used.

This will be a proudly centre-right Government. The question remains, however, whether this is where the political centre of gravity in New Zealand sits.

David Seymour, and Winston Peters move to shake hands.

For many on the political left this Government will look like a watershed and retrograde step. There will be a great wailing and gnashing of teeth once it gets doing. By Christmas it will have got rid of fair pay agreements. In time, the climate emergency response fund will be gone. Electronic monetary management for beneficiaries could be on the way. Reducing the prison population: gone. Clampdown on gangs: in. Bootcamps for troubled teens.

The list goes on.

The public service will be on notice and targets will be back for senior public servants. There will definitely be downward pressure in many areas of government spending, if only because the Government will need to find cash to pay for tax cuts and some of the spending commitments that have been signed up for in the deal.

Fuel taxes will be gone at some point, replaced by a road-user charge system that will also compel EV drivers to pay for road upkeep.

Effectively a whole grab-bag of issues loosely identified as “woke” will be jettisoned by this Government.

The Government’s internal political logic and where the three leaders and parties find common cause is around a general theme that the the Government simply hasn’t stayed in its lane for far too long. It does things it shouldn’t, and does not focus on where it should.

But back to Labour. Its evisceration on election night will now be a cause of deep reflection as it grapples with how to effectively oppose a Government that will tear down many things it held dear and which could well resonate with the public.

Just how honestly Labour grapples with this and how early it does so will give a clue about just how long it will be in opposition

But the first day is always smiles and handshakes and a conviction that, this time, the key to effective MMP coalition government has been unlocked.

The real pressure will come on if NZ First, ACT or National begin to slide in the polls as a result of decisions taken, or not taken. That point is where the rubber meets the road and the one when the arrangement will come under pressure.

The most important thing will be for the Government to get early and easily understood runs on the board. The next three years will be challenging: the global economic environment looks dreary, inflation is still too hot, interest rates are high and cost of living a significant challenge.

If it goes the distance, this Government will certainly change New Zealand.