New Zealand’s general elections were over six weeks before. The center-right National Party and the traditionally liberal ACT and populist New Zealand First parties inked a deal on Friday to govern together
The National Party of New Zealand has decided to join a coalition government with two other right-wing parties. The move signals a jump away from big government and toward lower taxes and fewer red tape.
New Zealand’s general elections were over six weeks before. The center-right National Party and the traditionally liberal ACT and populist New Zealand First parties inked a deal on Friday to govern together.
National Party leader Christopher Luxon made the announcement on Thursday and the three parties had decided to create an alliance following the statement.
As per the deal, Winston Peters, the leader of New Zealand First, will be the foreign minister, and veteran airline executive Luxon, the prime minister, will take office on Monday.
The deputy prime minister position will be shared between Peters and David Seymour of the ACT, with the leader of New Zealand First passing the reins halfway through the parliamentary term.
Along with cutting personal income taxes, the coalition has promised to train 500 extra police officers in the next two years and to reform the central bank’s instruction to concentrate only on limiting inflation.
“We will restore the economy to lower living expenses and provide tax breaks to boost the well-being of every New Zealander,” Luxon declared on Friday.
“Our government will put law and order and individual accountability back in place so that Kiwis feel safer in their own neighborhoods.”
After six years of leadership by the center-left Labour Party, New Zealanders decided on October 14 to change course, sparking weeks of heated discussions that ended in the agreement.
In the parliament, Luxon’s National Party secured 48 out of 123 seats, while Labour only managed 34. New Zealand First and ACT secured eight and eleven seats, respectively.
Chris Hipkins could only hold the position of prime minister for nine months following the unexpected resignation of Jacinda Arden. She won the 2020 election quite easily, but her public image declined as resentment over the country’s COVID-19 regulations and rising living costs.
New Zealand’s economy has recovered from recession after going through two consecutive declines in less than 18 months.
Following a 0.1 percent decline in the preceding quarter, the gross domestic product (GDP) grew by 0.2 percent in the first three months of the year, according to official data released on Thursday.
Better than anticipated, the increase was met with little celebration because record-high immigration is primarily responsible for population expansion.
The GDP decreased by 0.3 percent per person in the first quarter, marking the sixth straight quarter of declines.
According to Finance Minister Nicola Willis, rising borrowing costs and inflation are casting a “long shadow” on New Zealanders.
“I know how tough it is for people right now who are still struggling with the ongoing cost of living crisis. We have a plan to turn things around,” said Willis, pointing to the need for “careful government spending” and “lower taxes for hard-working New Zealanders”.
Following the COVID-19 epidemic, which severely damaged the nation’s vital agriculture and tourism industries, New Zealand’s economy has found it difficult to expand.
The Reserve Bank of New Zealand boosted interest rates to a record high of fourteen years in an attempt to slow down economic development and contain some of the highest inflation in the industrialized world.
Last month, the center-right coalition led by Prime Minister Christopher Luxon unveiled a budget that proposed tax reductions totaling $14.7 billion NZD ($9 billion) for the next four years.