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Watching Brief - Post-Coalition Agreement

Contributors:
Tim Clarke, Chrystal Tocher , Ashley Donaldson, Georgina Lomax-Sawyers and Laura Sahng
Published on:
24 November 2023

A strong triangle of physics; or a three-headed hydra of mythology? 

Late this morning in the Beehive's Banquet Hall flanked by six New Zealand flags Christopher Luxon, David Seymour, and Winston Peters signed coalition agreements between National, ACT, and New Zealand First. Symbolically, they chose the Banquet Hall rather than the old Legislative Council Chamber where Jacinda Ardern and Winston Peters signed their 2017 coalition agreement. So ends the government formation negotiations following the 2023 general election. Now begins the process of governing. We map the key dates for the new government and Parliament below. 

When the Governor-General appoints ministers in the new National-ACT-New Zealand First coalition government on Monday 27 November 2023, it will mark 44 days since the election. That makes this the second longest government formation period since the advent of MMP in 1996. (Please refer to the table below for comparative analysis). For the first time since MMP, New Zealand also has a three-party coalition. Previously, for example, after the 2017 election, three parties have comprised governing arrangements but only two parties have been in a coalition with support on confidence and supply offered by the third party. We now need to ask: do we have the strongest shape in physics, the triangle, or a three-headed hydra of mythology? 

As we can see from the coalition agreements, the governing arrangements mean that: 

  • All three parties will have ministers inside Cabinet. There will be 20 Cabinet ministers – 14 National, 3 ACT, and 3 New Zealand First. 

  • Cabinet collective responsibility will apply to all ministers. That means in the traditional way, all ministers will need to publicly support Cabinet decisions irrespective of the position they take personally. 

  • That said, the innovation introduced in 1999 by the Labour-Alliance coalition government emerges again with the "agree to disagree" provision. After a consultation process, the parties can invoke the provisions and disagree publicly.   

  • Ministers agree to be bound by Cabinet confidentiality. That is, proceedings at Cabinet are confidential.   

The coalition agreements themselves represent perhaps the most significant policy gains by the smaller parties in a coalition since MMP started. Running to 13 pages for ACT and 14 pages for New Zealand First, the coalition agreements start with the presumption that National's Fiscal Plan, Tax Plan, 100 Day Action Plan and 100-Point economic plan (Rebuilding the Economy) will prevail, and then proceeds to specify a large number of policy priorities and, indeed, wins for both ACT and New Zealand First. We cover some of the high points in these policy agreements in the table below. 

The two coalition agreements also contain several common parts with the text replicated between the two agreements, for example the preamble, the decision-making principles that will apply (principled, focussed, results-driven, people-focussed, accountable, evidence-based, fiscally responsible, and pro-democracy), support for procedural motions in the house and at select committee, and disputes resolution mechanisms. On disputes, a Coalition Committee comprising the leader and deputy leader of each party and the Leader of the House will meet in each parliamentary sitting block to monitor progress against the coalition agreements, and in the event of disputes issues will be raised first with the chiefs of staff of each party, and if not satisfactorily and expeditiously resolved, elevated to party leaders. 

The Ministerial List for the new government is available here. The particular points of interest that we highlight in the Ministerial line up are as follows: 

  • Few portfolios disappear, and indeed several new portfolios come into existence. Government shrinking is not (yet) happening with portfolios. 

  • There are nine new portfolios include Social Investment (reviving Sir Bill English's approach to public services), RMA Reform, Digitising Government, Space (as in outer), Hunting and Fishing, Mental Health, Hospitality added to the Tourism Portfolio, Manufacturing added to the Small Business Portfolio, Regulation, and Resources (that divides the current Energy and Resources in two, with Resources focussing on mining and minerals). 

  • Nicola Willis takes responsibility for the Finance, Public Service, and Social Investment portfolios. The combination suggests a real focus on how the public service operates and embedding an actuarial/social investment approach at the heart of public services, along with performance and accountability measures. 

  • Chris Bishop takes responsibility for the Housing, Infrastructure, and RMA Reform portfolios, indicating that this grouping will drive a huge part of the new Government's policy agenda. Mr Bishop adds significant responsibilities such as Leader of the House, Associate Finance, and Minister for Sport and Recreation. 

  • The Finance team comprises Nicola Willis as Minister of Finance, and Chris Bishop, David Seymour, and Shane Jones as Associate Ministers of Finance. This gives a strong hint as to the core economic team within the new Government, and also indicates that ACT and New Zealand First want to keep an eye on finance issues through having an associate minister each. 

  • Judith Collins bears a significant load with seven portfolios. Those cover everything from Attorney General and Defence along with oversight of the intelligence agencies and some significant policy direction with digitising Government, Science, Innovation and Technology, and Space.   

  • Tama Potaka comes into Cabinet with most of the Māori policy. He is now the Minister for Māori Crown Relations, Māori Development, and Whānau Ora. He will also serve as Minister of Conservation, and Associate Minister of Housing (Social Housing). 

  • David Seymour takes on the new portfolio of Minister for Regulation, so assumes a cross-cutting and potentially hugely influential portfolio. As Minister for Regulation, he could drive significant changes across Government and the Public Service and will have a mandate to look into almost any area where government intervenes in the economy or society. 

So, implementation and execution will be all, and over the next three years we will know if we dwell in a land of physics, or if the pull of the tropes of mythology prove too strong. 

Time taken to form government

ELECTION YEAR

PARLIAMENT

DAYS FROM ELECTION TO MINISTERIAL APPOINTMENTS

GOVERNMENT FORMED

1996

45th 

65 days

National - NZ First

1999

46th

13 days

Labour - Alliance

2002

47th

19 days

Labour - Progressive(United Future)

2005

48th

32 days

Labour – Progressive
(United Future and NZ First)

2008

49th

11 days

National
(Act, United Future, Māori Party)

2011

50th

18 days

National
(Act, United Future, Māori Party)

2014

51st

18 days

National
(Act, United Future, Māori Party)

2017

52nd

33 days

Labour – NZ First
(Green)

2020

53rd

20 days

Labour
(Green*)

2023

54th

44 days (at 27 November 2023)

National / ACT / NZ First


Timeline

 

Appointment of PM and Ministers and end of caretaker government

27 November 2023

↓

Commission opening – MPs sworn in and Speaker elected

5 December 2023

↓

State Opening, Governor-General delivers speech from the throne, address in reply debate commences (first confidence of the House vote)

6 December 2023

↓

Last sitting day for Parliament

likely 21 December 2023

↓

House will likely resume in January 2024

 

Electorate recounts

When the official election results were announced by the Electoral Commission on 3 November 2023, there were some exceptionally close electorate results. The successful candidates in Tāmaki Makaurau, Mt Albert and Nelson lead by differences of under 30 votes. Following the process indicated in our previous Watching Brief, recount applications were made to the District Court within three working days after the official results were declared and recounts were conducted by counting staff in the presence of a Judge, the Returning Officer and assistants, scrutineers, Electoral Commission staff and the Deputy Chief Electoral Officer. The final decisions by the District Court confirm no changes to the successful candidates as announced with the official results.  

Port Waikato by-election

Voting is now open for the Port Waikato electorate until 25 November 2023. This is likely to give National another seat, given that Andrew Bayly has won this electorate for the past three elections. This will take National's total number of MPs to 49. 

Policy announcements

National's Fiscal Plan, Tax Plan, 100 Day Action Plan, 100 Point Economic Plan have been agreed to by the three coalition partners, except for specific policies set out in the coalition agreements.

The below is a summary of the additional policies which are priorities for the ACT Party and New Zealand First Party, included in their respective coalition agreements with the National Party.

SECTOR / POLICY

NATIONAL / ACT

NATIONAL / NZ FIRST

Agriculture

  • Reverse the ban on live animal exports.

  • Seek advice on existing, and cease implementation of new, Significant Natural Areas.

     

  • Reverse the ban on live animal exports.

  • Reform the National Animal Welfare Advisory Committee.

Banking and Financial Services

  • Rewrite the Credit Contracts and Consumer Finance Act 2003 to increase protections for vulnerable customers.

  • Establish a select committee inquiry into banking focussed on competition, customer service and profitability.

Climate Change

  • Maintain a split-gas approach to methane and carbon dioxide, and review methane targets in 2024.

  • Allow farmers and landowners to offset sequestration against their on-farm emissions.

  • Stop the current review of the ETS system.

  • Adopt standardised farm level reporting.

  • Plan for transitional low carbon fuels, including the infrastructure needed to increase the use of methanol and hydrogen.

  • Climate change policies must not undermine national energy security.

Competition
  • Reform market studies introduced under the Commerce Amendment Act 2018 to focus on reducing regulatory barriers to new entrants to increase competition.

  • Consider the powers of the Grocery Commissioner, to examine the competitiveness in the market.

  • Establish a select committee inquiry into banking focussed on competition, customer service and profitability.
COVID-19 Inquiry

  • Broaden the terms of reference for the Royal Commission into COVID-19 Lessons learned.

  • Establish and complete a full scale, wide ranging independent inquiry into how the COVID-19 pandemic was handled in New Zealand, including broader areas than currently covered by the Royal Commission.

Education

  • Partnership or charter schools will be reintroduced, and policy will allow state schools to become partnership/charter schools.

  • First year Fees Free programme will be replaced with a final year fees free policy.

  • Amendments to the Education and Training Act 2020 which includes the commitment of tertiary education providers which receive taxpayer funding to a free speech policy. 

  • Changes to the Aotearoa New Zealand Histories curriculum.

  • First year Fees Free programme will be replaced with a final year fees free policy (after 2025).

  • Enforce compulsory education and address truancy.

Energy and Mineral Resources

  • Crown Minerals Act 1991 – clarify its role as promoting the use of Crown Minerals.

  • Repeal the offshore oil and gas exploration ban.

  • Issue stop work notice on Lake Onslow Pumped Hydro / NZ Battery Project.

  • Consider replacing fuel excise taxes with electronic road user charges.

  • Require the electricity regulator to implement regulations so there is sufficient electricity infrastructure to ensure security of supply and avoid excessive prices.

  • Examine transmission and connection pricing to facilitate connection of new renewable generation on and off-shore.

  • Restart offshore natural gas exploration, and support development of hydrogen technology.

  • Allow for exploration of natural geological hydrogen in New Zealand.

  • Investigate opportunities in New Zealand's mineral resources.

Employment

  • Repeal the Fair Pay Agreement regime by Christmas 2023.

  • Reform health and safety law and regulation.

  • Expand 90-day trials to apply to all businesses.

  • Consider changes to personal grievances claims.

  • Maintain the position that contractors in contracting arrangements cannot challenge their employment status in Court.

  • Commit to moderate increases to minimum wage every year.

  • Investigate the establishment of an essential worker workforce planning mechanism to plan for skills and labour shortages.

Forestry

  • Cease implementation of new Significant Natural Areas and seek advice on the operation of existing Significant Natural Areas.

  • Amend the National Environmental Standards for Plantation Forestry regulations to create a duty on harvesters to contain and remove post-harvest slash.

  • Amend the Resource Management Act 1991 for the primary sector including forestry.

Health

  • Disestablish the Māori Health Authority.

  • Repeal the Therapeutic Products Act 2023.

  • Repeal the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act 2022 to remove requirements for denicotisation and reduction in retail outlets.

  • Introduce serious penalties for selling vapes to under 18s (and consider a vaping licensing regime similar to liquor licensing).

  • Investigate build and lease-back arrangements for new hospitals.

  • Disestablish the Māori Health Authority.

  • Repeal the Therapeutic Products Act 2023.

  • Fund Gumboot Friday / I Am Hope Charity to $6 million per annum.

  • Repeals amendments to the Smokefree Environments and Regulated Products Act 1990 and regulations before March 2024 to remove requirements for denicotisation, the reduction in retail outlets and smokefree generation ban. Also amend the vaping product requirements and only tax smoked products.

  • Reform the regulation of vaping, smokeless tobacco and oral nicotine products, including banning disposable vaping products and increasing penalties for illegal sales to under 18s.

Immigration

  • Increase the cap on number of workers under the Recognised Seasonal Employer scheme.

  • Introduce a renewable five year parent category visa.

  • Remove median wage requirements from Skilled Migrant Category visas.

  • Amend rules so visa holders' family members can more easily work in New Zealand.

  • Amend the Accredited Employer Work Visa to focus the immigration system on attracting workers and skills needs in New Zealand. 

Infrastructure and Housing

  • Implement long-term city and regional infrastructure deals, with options to fund infrastructure.

  • Make Medium Density Residential Standards optional for councils.

  • Incentivise councils to enable more housing, including the consideration of sharing GST collected on new residential builds.

  • Establish a National Infrastructure Agency.

  • Establish a Regional Infrastructure Fund. 

Law and Order

  • Increase funding to ensure sufficient prison capacity.

  • Restore Three Strikes legislation, with amendments.

  • Abolish Labour's prisoner reduction targets.

  • Amend sentencing laws.

  • Strengthen electronic monitoring. 

     

  • Commit to training at least 500 new frontline police within the first two years.

  • Adequately resource community policing.

  • Amend the Sentencing Act 2002.

Monetary and fiscal

  • Change Reserve Bank's remit to focus on price stability.

  • Reserve Bank of New Zealand Act 2021 – remove dual mandate and take advice on removing Treasury observer and having a single decision maker model.

  • Introduce expenditure reduction targets for public sector departments.

  • Reduce core Crown expenditure as a proportion of the overall economy.

  • Increase funding for IRD tax audits.

New Regulatory Oversight

  • Establish Minister for Regulation.

  • Establish new government department for assessing quality of new and existing legislation and regulation.

  • Introduce and pass the Regulatory Standards Act.

  • Review regulations of particular sectors, including primary industries, finance, early childhood education, and healthcare occupational licencing.

  • Disestablish the Productivity Commission.

 

Overseas Investmnent Act

  • Overseas Investment Act 2005 – limit ministerial decision making to national security concerns and ensure timely decision making.

  

Public Sector

  • Remove co-governance from the delivery of public services.

  • Pass the Constitution (Enabling a 4-Year Term) Amendment Bill.

  • Introduce a Treaty Principles Bill.

  • Remove co-governance from the delivery of public services.

  • Stop Law Commission's work on hate speech legislation.

  • Ensure a 'National Interest Test' is undertaken before New Zealand accepts international agreements from the UN and its agencies.

  • Amend Waitangi Tribunal legislation.

Resource Management

  • Repeal the Natural and Built Environment Act 2023 and the Spatial Planning Act 2023 by Christmas 2023.

  • Reinstate and amend the Resource Management Act 1991 to remove barriers around consenting new infrastructure.

  • Replace the Resource Management Act 1991 with new laws centred on the enjoyment of property rights.

     

  • Repeal the Natural and Built Environment Act 2023 and the Spatial Planning Act 2023.

  • Reinstate and amend the Resource Management Act 1991 to remove barriers around consenting new infrastructure, including a fast-track option for regional and national projects of significance.

"Stop Work Orders"

  • Three Waters/ Affordable Water Reform, with council ownership of assets.

  • Auckland Light Rail.

  • Let's Get Wellington Moving.

  • Income Insurance

  • Industry Transformation Plans.

  • Lake Onslow Pumped Hydro / Battery Project.

  • Cancel Auckland Light Rail and Let's Get Wellington Moving.

Tax
  • Replace fuel excise tax with electronic road user charging for all vehicles, starting with electric vehicles.
  

Water

  • Issue a stop-work notice for Three Waters / Affordable Water Reform, with assets returned to council ownership.

  • ​Replace the National Policy Statement for Freshwater Management 2020.

  • Replace the National Policy Statement for Freshwater Management 2020 and the National Environmental Standards for Freshwater.

Please see here for our previous publication on the final election results and here for the preliminary results of the 2023 general election and commentary on the caretaker convention.

Contact one of our experts below if you would like advice on the impacts of the new government on your relevant work.

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the experts listed below.

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