ANALYSIS
Priorities in the health system, boosting housing, investment in renewable electricity, and final decisions on fuel taxes and vehicle registration fees. These are among the items remaining on the Government’s quarterly action plan that are expected to come before the end of the week.
Three months, 36 items. The clock winds down on Prime Minister Christopher Luxon’s action plan on Sunday, June 30.
Some of the items, as we’ve now come to expect, were always going to happen. See delivering a Budget and then legislating for the tax cuts revealed in the Budget.
Others are easy ticks, such as anything with “take decisions” at the front, or the next step on something that’s already been announced, like repealing section 7AA of the Oranga Tamariki Act.
Others have rather comical yardsticks: “raise the energy” in international engagements. There’s no doubt the Government has been very busy with such engagements, both here and overseas, though this particular yardstick of success can be ticked by toasting a Red Bull cocktail.
Some are still to come in the last days of the month, including final decisions on how transport plans will hit your wallet, the plan to address a health system on its knees, and what the housing solution involving councils is after National dropped the bipartisan approach to urban housing intensification.
Luxon is expected to trumpet all the boxes that have been ticked in the coming days, and will then launch the next quarterly action plan.
Issue a new Government Policy Statement on health, setting the Government’s priorities for the health system for the next three years. Still to come. The health system is in crisis with worker shortages across the sector and infrastructure in a poor state. The GPS will outline the Government’s priorities in the sector.
Finalise the Government Policy Statement on land transport, freezing fuel tax until the end of 2026, and delivering significant investments for transport.
The GPS is yet to be finalised. There will be a high level of interest given it will determine the increase in petrol taxes from 2027, how much more vehicle registration fees will be, and more police testing drivers if they’ve been drinking. Legislation to freeze petrol taxes this parliamentary term is still yet to be released, but isn’t in the “very hard” basket.
On the latter point, Budget 2024 put an additional $1 billion into the $20.7b pot for Roads of National Significance.
Take decisions on measures to increase investment in renewable electricity generation. Nothing in this space yet so watch out for something before the end of the week.
The Government wants to double New Zealand’s renewable electricity but how that will be funded in a fiscal environment with nothing but deficits in coming years remains to be seen. Maybe tax credits will be part of the mix?
Take decisions to implement the going for housing growth plan while making the MDRS optional for councils. This could be a biggie, and expect an announcement soon. The lack of a decision so far has meant councils asking for an extension before introducing housing intensification rules have been declined.
National campaigned on councils being able to opt out of the Medium Density Residential Standards (MDRS) if they zone for 30 years of housing growth.
Major questions are yet to be answered: What exactly does “30 years of growth” mean, who says whether councils’ plans stand up to scrutiny, and how will they be enforced? If some of that growth is for areas where there’s a lack of infrastructure - roads, public transport, waterworks - does the 30-year plan have to include infrastructure funding?
Commission a study into New Zealand’s fuel security, including investigating the feasibility of reopening the Marsden Point Oil Refinery. Part of the National-NZ First agreement. A study is yet to be announced but is expected soon.
Resources Minister Shane Jones announced an investigation into the oil refinery before the action plan was released. Last week Jones told the Herald that Northland’s widespread loss of power had boosted the Government’s focus on assessing generation asset investment and ensuring sufficient infrastructure is in place, with ministers to discuss commitments this week.
Deliver a Budget that reduces wasteful spending while investing in frontline services like health, education and police. Done on May 30, with $8.15b into health over four years, $3b in education and $651 million for police including $226m to deliver 500 additional officers by the end of next year. This was paid for in part by having about 6000 fewer public service roles.
Legislate for personal income tax relief. This always follows immediately after the Budget to implement the Government’s tax cuts, which take effect from July 31, and which largely aligned what National promised on the election campaign.
Legislate to introduce the family boost childcare tax credit. Announced before the Action Plan was released, with legislation passed post-Budget - as per previous point.
Progress legislation to improve rehabilitation, reintegration and safety outcomes in the corrections system, including by extending eligibility to offence-based rehabilitation programmes to remand prisoners. The bill enabling this was reported back from select committee and was due for its second reading under urgency this week.
Initiate the first regulatory sector review. Regulations Minister, Act leader David Seymour, confirmed this month it would be the early childhood education sector. (Seymour is also Associate Education Minister.)
Take decisions to tighten controls on youth vaping. Pre-action plan, Cabinet had already agreed to ban disposable vapes, (as the previous government had already planned to do) and increase fines ten-fold for sales to under-18s.
There have been no announcements since then, but this box can be ticked by deciding something, not necessarily making it public.
The decisions might be about tightening the licencing regime. Should a store require a liquor licence to sell vapes, which is something that National promised Act would be looked at? And whatever happened to Luxon’s support - expressed in the second leaders’ debate during the election campaign - for Labour’s election policy to restrict the number of vaping outlets to 600, more than half the current number?
Take decisions to streamline the Medsafe approval process. The National-NZ First agreement requires Medsafe to “approve new pharmaceuticals within 30 days of them being approved by at least two overseas regulatory agencies recognised by New Zealand”.
Seymour, as Associate Health Minister, has said the Government is committed to this. He has also announced intentions to streamline Pharmac’s approval processes so it can assess a funding application at the same time as Medsafe considers regulatory approval.
Introduce legislation to improve the rental market. Part of the National-Act coalition agreement, the Government introduced a bill in May for a return of no-cause evictions, and shortening tenant-landlord and landlord-tenant notice periods. Officials questioned whether it would deliver clear benefits to landlords with costs to tenants likely to outweigh any benefit to them.
Raise the energy New Zealand brings to key relationships through international engagements, focusing on our traditional partners, the Pacific, and South East and South Asia. What’s the energy yardstick? Luxon, Foreign Minister and NZ First leader Winston Peters, and Trade Minister Todd McClay have been making frequent trips overseas, most recently Luxon to Japan and Papua New Guinea, as well as Fiji and Niue this month, and South East Asia in April.
Peters has also been busy with trips to the United States and the Pacific Islands, among others, while Luxon has hosted international dignitaries including Chinese Premier Li Qiang.
Establish a Regional Infrastructure Fund. Part of the National-NZ First coalition agreement. It will have $1.2b in mainly capital funding over the parliamentary term, with a small proportion for operational grants. Jones said the criteria is still being finalised but it will be ready to go from July 1.
Commence an independent review of the methane science and targets for consistency with no additional warming from agricultural methane emissions. Part of the National-Act agreement. The Government announced this month that agriculture will be removed from the ETS and a new entity, the Pastoral Sector Group, would look at how to tackle biogenic methane, with terms of reference still being developed.
Finalise policy to keep agriculture out of the ETS. See above.
Introduce legislation to suspend the requirement on councils to identify and adopt new Significant Natural Areas. The intention was already announced by Associate Environment Minister Andrew Hoggard before April. The first RMA Reform bill, now before Parliament, would suspend the requirement for councils to identify new (SNAs) for three years.
Launch a review of the firearms registry. Part of the National-Act agreement, and announced this month. Associate Justice Minister Nicole McKee has said she is prepared to bury her personal view - that the registry is good for some things but shouldn’t cover all firearms - if the review findings differ from her own thoughts.
Police are already adamant the registry is useful in stopping straw-man purchases, where a firearms licence holder legally buys a firearm and then sells it to someone - like a gang member - who cannot possess it legally.
Take decisions on the removal of the ban on offshore oil and gas exploration. Repealing the ban is part of the National-Act and the National-NZ First agreements. Jones announced this month that Cabinet had signed off on proposals to amend the Crown Minerals Act to reverse the ban, with a bill expected in the second half of this year.
His idea for oil and gas bonds for long-term industry certainty, however, is not workable, according to his officials.
Take decisions on the repeal of Section 7AA of the Oranga Tamariki Act. Also part of the National-Act agreement, and the Government wants it gone because it believes it creates a divisive system.
The section outlines the chief executive’s duties under the Treaty of Waitangi, and is seen as a way of ensuring an uplifted child can remain within their wider whānau. A bill repealing the section passed its first reading in May, despite a strong rebuke from Oranga Tamariki that it would put vulnerable children at greater risk.
Introduce legislation to reintroduce charter schools. Part of the National-Act agreement, the Government has allocated $153m for new charter schools. A bill to bring them back was scheduled to have its first reading this week.
Take decisions to disestablish Te Pūkenga and consult on a proposed replacement model. Tertiary Education Minister Penny Simmonds said last week that decisions will be made by the end of June on potential replacement models for the mega-merger. These will then be put out for consultation.
Take action to strengthen teacher training, including refocusing on numeracy, literacy and assessment. Budget 2024 allocated $53m for training 1500 new teachers over four years in certain schools rather than at teachers’ college.
There was also $67m for professional development on structured literacy for teachers. There haven’t been any specific announcements this quarter on numeracy or assessment, but they’re included in Education Minister Erica Stanford’s six priorities.
Take decisions on the rollout of structured literacy for year 1-3 students, including a phonics check. See above: part of the $67m package.
Take action to develop standardised assessment and regular reporting to parents. Also see above, and part of the National-NZ First agreement. One of Stanford’s six priorities is “smarter assessment and reporting”.
Respond to the independent review of Kāinga Ora’s financial situation, procurement, and asset management. Following Sir Bill English’s review, the Government announced a refresh of the board, greater use of community housing providers, simplifying Kāinga Ora’s work, and an expectation of improving its financial performance (the debt-laden agency was facing annual deficits of $700m).
The Government has also put all public housing programmes under review. The Opposition has questioned whether any of this will boost public housing more than what would have otherwise happened.
Introduce legislation to amend the RMA to clarify application of National Policy Statement on freshwater management in relation to individual consents for freshwater and to extend marine farm consent.
In April the Government announced its first bill amending the RMA to support farming and mining, which would clarify that resource consent applicants no longer need to show that their proposed activities follow the Te Mana o te Wai hierarchy of obligations, as set out in the NPS. It would also repeal intensive winter grazing regulations and amend stock exclusion regulations.
The Resource Management (Extended Duration of Coastal Permits for Marine Farms) Amendment Bill also passed its first reading this month, which would extend current resource consents for marine farms by up to 20 years.
Take decisions on the scope of the extension to the Covid-19 inquiry. This week the Government announced a second phase for the inquiry, at a cost of $14m, which will have a new chair and commissioners and wider terms of reference, including looking into vaccine efficacy and safety, the lockdowns in Auckland and Northland, and the disruption to health, education and business.
The first phase will finish in November. Peters agreed with the second phase, but wanted the first phase scrapped altogether, calling it “nothing more than a Labour Party political tool”. He invoked the “agree to disagree” provision. Internal Affairs Minister Brooke van Velden said she didn’t want to set a precedent by ending an inquiry early.
Labour leader Chris Hipkins hit back, saying Peters was courting votes from conspiracy theorists.
Take decisions to restore Three Strikes. A bill on Three Strikes 2.0 had its first reading this week. It includes several new provisions including more judicial discretion, a higher threshold for a strike so low-level crimes aren’t captured, and sentencing discounts for an early guilty plea at strike three. The Justice Ministry regulatory impact statement delivered a scathing assessment of the law, saying it will cost millions of dollars and deliver no “significant quantifiable benefits”.
Release draft plan to ease restrictions on building materials from overseas for public consultation. In April Luxon announced proposals to address building supply shortages including allowing the use of overseas products that pass standards equivalent to New Zealand’s.
The cost of building work consented per square metre for a standalone house in 2022 was $2591, compared to $1743 in Australia. Opening up the market to more overseas materials would mean New Zealand could avoid being hamstrung by shortages, such as the Gib shortage which came to a head in 2022.
Reform the CCCFA regime to improve access to credit for home-buyers. Part of the National-Act agreement. In April the Government announced the removal of several regulations from the Credit Contracts and Consumer Finance Act, which are aimed at giving lenders more flexibility in assessing whether someone can afford to take out a loan.
Whether this would make vulnerable people too at risk of loan sharks is the key question, but the Government said the current system was too prescriptive: the processes were similar for someone wanting a million-dollar loan or a $1000 overdraft.
Take decisions on establishing a youth serious offender category and making Youth Military Academies a standalone sentencing option for the Youth Court. The Government announced that military-style boot camp pilots will start in late July for children who are in youth justice facilities and have committed at least two crimes that could result in up to 10 years of jail.
Luxon has defended the academies, saying this will be different, despite little evidence they work and criticism of previous versions having high rates of reoffending (more than 80%).
Launch an attendance action plan and introduce the first phase of initiatives to lift school attendance. Announced in April, including weekly truancy reporting, and phase two signalled including fines for parents who take their kids out of school to go on holiday. Publishing attendance data is part of the National-Act agreement.
Set targets for improving public service outcomes. In April Luxon announced his nine targets for 2030:
Take decisions on reform of the Holidays Act. Signalled by Van Velden as Workplace Relations and Safety Minister in March. She said in June that draft proposals would go out for targeted consultation in September.
Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery team and is a former deputy political editor.
Expectations tempered around return to surplus in 2027/28.