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The biggest concessions Luxon made to get three-party coalition over the line

Thomas Coughlan and Derek Cheng,
Publish Date
Fri, 24 Nov 2023, 2:42PM

The biggest concessions Luxon made to get three-party coalition over the line

Thomas Coughlan and Derek Cheng,
Publish Date
Fri, 24 Nov 2023, 2:42PM

A $1.2 billion fund for regional infrastructure, scrapping plans on allowing foreign buyers back into the housing market, allowing work that could lead to a referendum on Treaty of Waitangi principles, and keeping the superannuation eligibility age at 65.

These are among the biggest concessions incoming Prime Minister Christopher Luxon has made to get his three-party Coalition over the line, but none of them mutate any of National’s core election promises beyond recognition.

Tax was always going to be a major sticking point, as New Zealand First has been a staunch opponent of Luxon’s wish to allow foreigners to buy $2 million-plus New Zealand homes, with a new tax on those purchases to help fund National’s tax package. The revenue from the tax was hoped to add an average of $740m a year to the Government coffers.

Instead Luxon said the tax package - National’s centre-piece on the campaign - would be funded by other means, given there were already “buffers” in its fiscal plan and there would be other savings and “reprioritisations” that could be dipped into.



Among those is the estimated $555m that National will no longer be spending to lift the Working for Families abatement threshold from $42,700 to $50,000 in 2026.

There is also the possibility of additional savings from a further shrinking of the public service. National had wanted a 6.5 per cent reduction from certain public agencies - with savings of $594m - while Act wanted a far greater reduction by returning the public service to 2017 levels; National has agreed to look for efficiencies in the public service while keeping the 2017 levels in mind.

Hitting pause on future changes to income tax beyond next year is also not going to lose Luxon any credibility; National’s tax package was to continue adjusting the income tax thresholds for inflation only if it was “affordable and responsible”.

During the election campaign, Luxon said it would be “divisive” to have a referendum on the Treaty of Waitangi principles, which was one of Act’s more important campaign policies.

Luxon has agreed to introduce a Treaty Principles Bill based on existing Act policy and support it to a select committee, which will ensure a national debate without necessarily leading to a referendum.

NZ First leader Winston Peters has long been a champion of keeping the superannuation eligibility age at 65, and Luxon has agreed to this for this parliamentary term - though this isn’t a massive concession as National’s policy was not to start increasing the age until 20 years from now.

The $1.2b capital funding for the regions isn’t totally unexpected; it harks back to the Provincial Growth Fund that Peters wrangled out of Labour in 2017, and while NZ First’s 2023 manifesto didn’t put a figure on such a fund, it stressed the importance of regional infrastructure.

Luxon has also agreed to fund 500 more police officers over two years, 200 more than what National campaigned on but with an extra six months to deliver than NZ First had wanted.

Luxon did not budge on Act leader David Seymour’s wish to scrap the firearms registry, but Luxon did agree to reviewing it, as well as a rewrite of the Arms Act.

Winston Peters, David Seymour to split Deputy PM

Winston Peters and David Seymour will rotate in the Deputy Prime Minister role in an unorthodox coalition Government stitched together by incoming Prime Minister Christopher Luxon.

Peters bristled at the suggestion he was “sharing” the role with Seymour as the new Cabinet was unveiled today.

The NZ First leader will be Deputy PM for the next 18 months before surrendering the position to Act’s Seymour on May 31, 2025.

Peters has also secured the coveted role of Foreign Affairs Minister – a job he has filled in previous administrations.

The new Government: New Zealand First leader Winston Peters, National leader and incoming Prime Minister Christopher Luxon and Act Party leader David Seymour. Photo / Mark MitchellThe new Government: New Zealand First leader Winston Peters, National leader and incoming Prime Minister Christopher Luxon and Act Party leader David Seymour. Photo / Mark Mitchell

Seymour will become the Minister for Regulation.

Luxon has unveiled the Cabinet line-up. There are Cabinet 20 ministers including 14 from National, three from Act and three from NZ First.

In one high-profile coalition deal casualty National has abandoned its policy to repeal the foreign buyers residential property ban - that is a significant win for Peters.

Earlier: Seymour suggests Act trumps NZ First for ministerial roles

Seymour told media this morning he was confident his party has secured a favourable coalition deal - and suggested his party trumped NZ First in the ministerial stakes.

He wouldn’t directly answer questions about how many ministers Act had been given or how many spots the party had within Cabinet.

Seymour said he was unaware of what ministerial portfolios both National and NZ First had been allocated.

However, when pressed, Seymour admitted he thought Act’s presence in Cabinet was proportional to the election’s party vote. Act received 8.6 per cent of the party vote, while NZ First got 6.1 per cent.

What to expect in the first 100 days

A jubilant Luxon was last evening giving nothing away about the deal National had struck, including who has been given the role of deputy prime minister, which was one of the final sticking points in negotiations.

Luxon said “all of that will be revealed” today.

“I won’t get into any of that until the deal has been ratified by the respective parties,” he said, adding he was “100 per cent” confident the deals would be ratified by the parties’ respective boards. Act’s board had already been consulted on a deal as required under that party’s constitution. National’s board had signed off the deal as of late afternoon yesterday, leaving only NZ First.

Luxon promised to announce the shape of his Cabinet later on Friday, after briefing MPs.

He called the Governor-General Dame Cindy Kiro on Thursday to say he was on the verge of announcing the deal, and was set to call her again last night after the parties’ respective boards had ratified the deal. Kiro will look for public statements from the three parties that Luxon has the ability to form a government, which will be obvious by today.

Luxon said he wanted to have a swearing-in ceremony for ministers on Monday.

Rehearsals for the state opening of Parliament took place there yesterday. Luxon said he wanted Parliament open by December 5, allowing three weeks of sitting time before the House rises for Christmas.

Seymour told the Herald the Government would announce a 100-day plan shortly after the announcement of the coalition deal. Seymour hinted some of this would include repealing legislation, potentially under urgency.

“There may well be some things where the existence of legislation that we no longer want to exist and that is costing a large amount of money and therefore, it actually requires urgency to stop that waste.”

National had promised to repeal the Government’s RMA reforms by Christmas and revert to the old system. It also wants the Clean Car fee or “ute tax” gone by the end of the year.

Luxon defended the length of negotiations, the longest bar one since the advent of MMP in 1996, saying the deals were detailed enough to justify the length of time spent negotiating them.

“I’m really proud of the negotiations... When you see the deals... you will understand how comprehensive they are, we cover a tremendous amount of policy,” Luxon said.

“I’ll take as long as it takes, it’s been important for me to go through this in a really disciplined way.”

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.

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