While NZ First prevented the return of wealthy foreigners to the property market, it didn’t manage to stop its partners loosening immigration settings.
The Government will increase the cap on the number of people who come to the country under the Recognised Seasonable Employer scheme, make it easier for migrants’ parents to come to New Zealand, remove the median wage requirement from the Skilled Migrant Category, and make it easier for family members of visa holders to work in New Zealand.
While potentially higher levels of immigration and tax cuts could be inflationary, all three parties are adamant they want to reduce inflation.
Doing so by cutting public sector spending by 6.5 per cent is a priority, with Wellington-based Nicola Willis appointed both Finance Minister and Minister for the Public Service.
While Act would’ve liked to have closed several identity-based government agencies, its partners only agreed to disestablishing the Productivity Commission (the current chair of which, Ganesh Nana, is openly left-leaning).
The savings banked from culling this agency will be used to set up a new department that will assess the quality of new and existing legislation and regulation. Act leader David Seymour will be Minister for Regulation.
The three parties also agreed to remove the Reserve Bank’s employment target, requiring its Monetary Policy Committee to focus solely on price stability.
The Government will investigate more drastic changes to the Reserve Bank proposed by Act.
It will “take advice” on requiring the Reserve Bank to meet its inflation target in a set timeframe, rather than in the “medium term”. This could see the Reserve Bank make more aggressive changes to the Official Cash Rate (OCR).
The Government will also consider getting rid of the Monetary Policy Committee, putting this power back in the hands of the governor alone.
Both the employment target and committee structure were introduced by the Jacinda Ardern-led Government, which NZ First was a part of.
On the topic of finance, the Government will rewrite the Credit Contracts and Consumer Finance Act (CCCFA) to “protect vulnerable consumers without unnecessarily limiting access to credit”.
The CCCFA was tweaked a few times under the previous government; tightened a lot and then loosened a bit over concerns the rules prevented people who could afford to take out debt from accessing it.
A new CCCFA could be significant for banks and other lenders, and possibly support the property market.
The three parties agreed to the sorts of employment relations changes one might expect from a right-leaning government.
The Fair Pay Agreement regime, which supports collective bargaining, will be gone by Christmas, and 90-day trials will be expanded to all businesses.
There will be “modest” increases to the minimum wage every year, thanks to NZ First.
Act delivered some certainty for companies like Uber, getting its partners to agree that people who explicitly sign up for a contracting arrangement can’t challenge their employment status in the Employment Court.
A lot is set to change when it comes to the way infrastructure is funded and financed, and investment is prioritised.
NZ First secured a couple of wins, getting its partners to agree to the establishment of a Regional Infrastructure Fund with $1.2 billion in capital funding over three years, and a National Infrastructure Agency to co-ordinate government funding, improve procurement and connect investors.
The Government will also reduce expenditure on cycleways, cancel Auckland Light Rail and Let’s Get Wellington Moving, and commit to building a four-lane highway alternative for Northland’s Brynderwyn Hills.
It will allow public-private partnerships, tolling and value capture rating to fund infrastructure, and work with Auckland Council to implement congestion charging.
It will also work to replace fuel excise taxes with electronic road user charging.
The Government will investigate sharing GST collected on new residential builds with councils to incentivise them to enable the building of more houses.
NZ First and National will have their wish fulfilled to make bank bosses justify their high profits in front of MPs, as a select committee inquiry into banking competition will be set up.
This inquiry will occur on top of the Commerce Commission market study, currently underway.
In another win for Act, the Government will amend the Overseas Investment Act to limit ministerial decision-making to national security concerns.
Coming back to tax, the Government will (thanks to NZ First) better resource Inland Revenue to do audits to crack down on avoidance and evasion.
National’s Simon Watts has been appointed Revenue Minister. He will sit outside Cabinet.
Seymour and NZ First’s Shane Jones have been appointed Associate Finance Ministers along with National’s Chris Bishop, who also gets housing, infrastructure, and RMA reform (along with other portfolios).
National has kept the agricultural portfolio for itself, coupling it with trade and giving the roles to Todd McClay.
The climate change and environment portfolios have gone to ministers outside Cabinet.
A review of the Emissions Trading Scheme, aimed at getting businesses to reduce rather than offset their emissions through forestry, will be stopped. This is something NZ First, which is very supportive of the forestry sector, wanted.
With NZ First also hot on energy and resources, Jones will become Resources Minister.
The commerce and consumer affairs portfolio has gone to National’s Andrew Bayly, who will also get small business and manufacturing, and statistics, and sit outside Cabinet.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
