By Lucy Craymer and Praveen Menon
WELLINGTON (Reuters) -New Zealand’s National Party formally signed an agreement to form the country’s next three-party coalition government on Friday, after negotiating for more than a month over ministerial roles and policies.
The role of deputy prime minister, a key sticking point in the discussions, will be split between the populist NZ First party leader Winston Peters and libertarian ACT party leader David Seymour, the group announced in a statement.
National Party deputy leader Nicola Willis will be finance minister and Peters will be foreign minister, the parties said.
“We believe in this country, we are ambitious for it and we know that with the right leadership, the right policies, and the right direction, together we New Zealanders can make this an even better country,” National leader and incoming Prime Minister Christopher Luxon said in a speech ahead of the formal signing of the agreement at parliament.
Luxon, the former CEO of the national airline, only entered parliament in 2020 and became leader of the centre-right National Party at the end of 2021. He is credited with boosting National’s popularity ahead of the Oct 14 general election following a crushing loss three years earlier.
The coalition revealed a series of policy changes it will undertake in government, including narrowing the remit of the Reserve Bank Of New Zealand (RBNZ).
Luxon, 53, said the government will amend the Reserve Bank of New Zealand Act 2021 to remove the dual mandate on inflation and employment, to focus monetary policy only on price stability.
The coalition plans to repeal a ban on offshore oil and gas exploration and a ban on the sale of cigarettes to future generations introduced by the previous Labour government, according to coalition documents.
The new government will cut personal income taxes following through on a campaign policy used to woo middle income voters struggling with rising costs of living.
However, plans to open up New Zealand’s housing market to foreign buyers and tax these purchases to pay for the cuts have been shelved.
“Delivering tax relief is just one part of the Government’s plan to rebuild the economy. The Government will ease the cost of living, reduce wasteful spending, and lift economic growth to increase opportunities and prosperity for all New Zealanders,” Luxon said.
The parties said they plan to “re-write the Arms Act” without giving any further details, and would undertake a review of the gun registry that was introduced after a gunman killed 51 Muslim worshippers in 2019. It also agreed to train no fewer than 500 new Police.
The coalition agreement also lays out a shift in policy towards the country’s indigenous Maori people, with plans to roll back the use of the language and look at affirmative action policies. However, a controversial proposal to have a referendum on the interpretation of the country’s founding treaty document will not happen.
MIXED BAG
The new cabinet, which will be sworn in on Monday, is a combination of veteran politicians and new leaders.
Peters – a colourful, populist figure in his late seventies – will be taking over as foreign minister for a third time after serving in the role in Jacinda Ardern’s 2017 Labour-led government under and with Labour Prime Minister Helen Clark in 2005.
“Foreign affairs does matter to this country…. all relationships do matter to this country,” Peters said in a joint news conference in the capital Wellington after the announcement.
“We expect the Chinese government to treat us the same way, regardless of our size, as we treat Niue. Size doesn’t matter, respect does,” he said when asked how he plans to deal with China’s growing influence in the region.
(Reporting by Lucy Craymer; writing by Praveen Menon; editing by Diane Craft and Lincoln Feast)
