Big policy changes ahead for Labour-led government

Prime Minister-elect Jacinda Ardern appears set to lead some significant policy changes under the incoming government. Photo: Lynn Grieveson.

With a change of government for the first time in nine years, Sam Sachdeva looks at some of the areas where we may see the most striking policy changes.

Jacinda Ardern and Winston Peters are very different people, but on Thursday night they were on the same page when it came to the state of the New Zealand economy.

Peters spoke about how capitalism had become the foe, rather than friend, of New Zealanders, while Ardern believed there needed to be an “active government” helping Kiwis.

"We won't just allow the economy to be carried by housing price inflation and population growth," Ardern said.

One area of activity that will affect the economy is Labour’s KiwiBuild programme to build 100,000 affordable houses over 10 years, which the Prime Minister-elect confirmed would be carried out in full.

Immigration cuts

Cutbacks to migration levels, opposed by the National-led government, are also set to go ahead with both Labour and New Zealand First campaigning on turning down the tap.

Ardern signalled it was Labour’s policy, to cut net migration by between 20,000 and 30,000, that had won the day over New Zealand First’s more severe cutbacks - although whether that is the case remains to be seen when the final coalition agreement is released next week.

Another of Peters’ pet topics, an overhaul of the Reserve Bank, appears set to go ahead with the New Zealand First leader and Ardern indicating changes to the Reserve Bank Act were in the works.

However, he said he had not secured his preferred policy of moving to a Singaporean model for monetary policy, which targets a currency level rather than an interest rate level.

Then there are plans to restrict foreign ownership: Ardern confirmed the Labour-led government would push ahead with plans to ban foreigners from buying existing homes and pass legislation within its first 100 days of office.

It’s not quite clear whether New Zealand First’s proposal to equally restrict the sale of farmland will go ahead, with Ardern saying the issue was covered by Labour’s plans to protect sensitive assets.

However, Peters’ push for regional development seems set to be recognised with increased funding and policy changes; some have suggested a super-sized economic development portfolio could fall New Zealand First’s way.

Movement in foreign policy

New Zealand’s approach to foreign policy is set to be one area where there could be marked change.

It appears the foreign affairs and defence portfolios could fall New Zealand First’s way, with Peters suggesting it would be possible for the party to hold both when asked by media.

Former soldier Ron Mark, the logical candidate for Defence Minister, has been outspoken about what he sees as a lack of investment in and support for the Defence Force.

He has previously claimed the National-led government’s $20 billion defence investment plan could become a “gold-plated trap door” - suggesting it could be in for a shake-up.

Peters was Foreign Minister in the last Labour government, and has made plain his feelings that MFAT could do with more attention.

Some media have suggested he is in line to take the role again, but it seems reasonable to question whether he has the appetite for the constant travel and time out of the country.

Whether it is Peters or former Labour MP and Pacific economic ambassador Shane Jones - another potential option - some MFAT staffers will be dreading the replacement for Gerry Brownlee, who provided a fairly steady hand during his brief time in charge.

Whoever they are, the new Foreign Minister will have to repair strained relations with several countries, including Israel after New Zealand’s co-sponsorship of a critical UN Security Council resolution, and Australia following Labour MP Chris Hipkins’ ill-advised foray into the country’s “Citizengate” affair (although Australian Foreign Minister Julie Bishop was quick to downplay suggestions of a falling out).

Some of the incoming government’s trickiest questions will be in international trade.

Ardern’s foreign buyers ban will require a renegotiation of the existing South Korea FTA and the proposed Trans Pacific Partnership (TPP) deal.

The TPP is due to be signed off by all 11 countries on the sidelines of Apec in mid-November, meaning there is less than a month for ministers and trade officials to attempt to win concessions without giving any ground in other areas.

In a worst-case scenario, Ardern will have to decide whether to pull out of the deal in her first overseas summit as Prime Minister, in an inauspicious beginning to international relations.

While education didn’t receive much mention from either Ardern or Peters, it’s another area where there is likely to be notable change, while the health sector will likely receive a funding boost.

Greens wins

Then there are the Greens, part of the new government through a confidence and supply deal that will see three ministers sitting outside of Cabinet.

In a letter to Green members, the party suggested it had made a number of policy wins, including improved action on climate change, an overhaul of the welfare system, a boost to the conservation budget, and an improvement in water quality.

The release of the full agreements next week, along with the announcement of ministerial portfolios, will give a clearer indication of where the incoming government’s policy priorities lie.

But it’s safe to assume we are in for a period of real change.