New Zealand gets new government promising tax cuts, less red tape

Centre-right National Party forms three-way coalition with the classically liberal ACT and populist New Zealand First.

New Zealand Prime Minister-elect Christopher Luxon has formed a coalition government with New Zealand First leader Winston Peters and ACT leader David Seymour [File: Mark Mitchell/NZ Herald via AP Photo]

New Zealand’s National Party has agreed to form a coalition government with two other right-leaning parties, heralding a shift towards lower taxes and less government bureaucracy.

The centre-right National Party on Friday signed an agreement to govern in a coalition with the classically liberal ACT and populist New Zealand First parties nearly six weeks after the country held its general elections.

The formal agreement comes after National Party leader Christopher Luxon announced on Thursday that the three parties had agreed to form an alliance.

Under the agreement, Luxon, a former airline executive, will serve as prime minister from Monday, alongside New Zealand First leader Winston Peters as foreign minister.

Peters and the ACT’s David Seymour will share the role of deputy prime minister, with the New Zealand First leader handing over the baton halfway through the parliamentary term.

The coalition’s manifesto includes pledges to cut personal income taxes, train 500 more police within two years, and rewrite the central bank’s mandate to focus solely on keeping inflation low.

“Our government will rebuild the economy to ease the cost of living and deliver tax relief to increase the prosperity of all New Zealanders,” Luxon said on Friday.

“Our government will restore law and order, and personal responsibility, so that Kiwis are safer in their own communities.”

The agreement caps weeks of intense negotiations after New Zealanders voted on October 14 for a change of direction after six years of governance by the centre-left Labour Party.

Luxon’s National Party won 48 of 123 seats in parliament, compared with Labour’s 34. ACT and New Zealand First picked up 11 and eight seats, respectively.

Labour’s outgoing Prime Minister Chris Hipkins held the top job for just nine months, following Jacinda Ardern’s surprise decision to step down at the start of the year.

Ardern won the 2020 election in a landslide but saw her popularity dip amid mounting frustration with the country’s COVID-19 curbs and rising living costs.

Source: Al Jazeera and news agencies