Five big challenges for the next government

Whether Winston Peters chooses Jacinda Ardern or Bill English, there will be some common areas of significance for the next government. Photo: Lynn Grieveson.

We’re still waiting to find out who will form our next government - but whether it’s National or Labour, they and their coalition partners will face some pressing questions within days of taking power. Here’s a taster of the big issues that may be on their minds.

Left, or right? Blue, or red (and green)?

After another day of talks, we’re still none the wiser, although one step closer, with NZ First’s board and caucus meeting throughout Monday to discuss the respective merits of a deal with National or Labour and the Greens.

But no matter which way Winston Peters and his team go, there’s likely to be some common priorities for the next government to address - either as a result of policy concessions or external deadlines.

So what is likely to be at the top of the next government’s to-do list? Here are just a few of the big issues that will be on their plate.

The TPP

Making a call on the fate of the controversial free trade deal is where the clock is ticking the loudest.

The 11 countries that have forged ahead after the United States’ withdrawal are likely to hold a final round of negotiations at the end of October, before a TPP “summit” is held at the Apec summit in Vietnam come mid-November.

As Newsroom has already noted, the election result means the parliamentary majority for the TPP has been lost, with Labour, the Greens and NZ First all opposed to at least some aspects of the deal.

A Labour-led government will face the greatest challenges regarding the TPP, with a decision required within weeks.

Can they win some last-minute concessions to allow a ban on foreign home buyers, or remove some of the most questionable aspects of the investor state dispute settlement (ISDS) mechanism?

If not, does New Zealand withdraw from the deal and hope to re-enter later under more favourable conditions, or does it swallow a dead rat and hope the benefits to businesses outweigh the negatives?

A National-led government will have problems of its own, however: while it doesn’t require a parliamentary majority to sign off on the deal at Apec, it will need to make sure it has the numbers to pass any enabling legislation that’s needed.

Immigration

We’re almost certain to see significant changes to New Zealand’s immigration policy, given it was a lynchpin of NZ First’s campaign.

Peters has been steadfast in his belief that net migration levels need to be slashed to between 10,000 and 15,000 (it was 72,100 for the year to August).

Making a change of that magnitude, or something close to it, will require some drastic changes in policy.

Peters has indicated cuts could be made to international student numbers, as well as low-skilled workers - although he has pledged to “hold the line” in essential industries like farming while young Kiwi workers are trained up.

It’s an area where Labour has some common ground with NZ First: the party has pushed for cutting numbers by between 20,000 and 30,000 through limiting student visas, post-study work visas, and normal work visas.

National may find it harder to shift course: Bill English and his ministers have repeatedly backed high migration levels as underpinning a strong economy, although Immigration Minister Michael Woodhouse in April announced the introduction of salary bands for both skilled migrants applying for residency and people applying for temporary essential skills visas.

Industries which rely on migrant workers, such as the aged care sector, are already bracing for changes.

Housing

While the housing market has cooled down, some experts are predicting it will pick up again in the first half of 2018 due to a fundamental lack of housing compared to population growth.

NZ First wants a ban on foreign ownership of land as well as a comprehensive register, and Peters has confirmed the issue came up during coalition negotiations.

Labour leader Jacinda Ardern has said she wants to ban foreigners from buying existing houses in New Zealand by Christmas through an urgent law change, which would require some significant work by officials.

There’s also the issue of how NZ First’s and Labour’s policies would impact free trade deals such as the TPP, which include non-discrimination provisions.

National has been more in favour of foreign investment, but is unlikely to have opposed any changes as a bottom line.

Then there is the broader issue of housing affordability, with both National and Labour having promised to build tens of thousands of houses and free up more land for development.

National’s special housing areas have not succeeded as hoped, with fewer than 100 affordable houses built in the Auckland SHAs according to a recent Auckland Council report.

With housing one of the hot-button issues during the election campaign, the next government will be expected to get on top of it quickly.

Regional development

This has again been a pet topic of Peters and NZ First, who argue the regions have been neglected by both National and Labour.

Peters has campaigned to create regional funds to receive the GST paid by international tourists - called “Royalties for the Regions” - as well as moving the Port of Auckland to Northport near Whangarei, which could cost billions.

One of the oft-floated suggestions has been that Peters could pick up a new “Minister of Regional Development” role, giving him wide-ranging powers to deliver on his promises to rural voters and fund a range of infrastructure projects.

That could require the establishment of a new ministry, or simply working within an existing department, but either way there’s likely to be a significant workload for the next government.

Finding the money to fund an array of regional development projects will also be a challenge for the next Finance Minister, given lower than expected surpluses meaning both National’s and Labour’s books are relatively tight.

Superannuation

Financial support for seniors is one area where the main pressure could come from a lack of change.

In March, Prime Minister Bill English announced his party would gradually increase the superannuation from 65 to 67, starting in 2037.

However, both Labour and NZ First have opposed any raising of the age, and it’s likely that National would move on its position as the price of holding onto power.

That means the status quo is likely to remain, but with the cost of NZ Super rising from $5 billion in 2000 to $12.2b last year (and forecast to rise to $15b by 2020) finding the money to cover the rising cost pressures will be a difficulty for the incoming government - albeit one that may take some years to really bite.

It’s a problem without easy or quick solutions, and one that will require some serious thought from whoever holds the reins for the next three years.