New Zealand's new government promises tax cuts, more police and less bureaucracy

WELLINGTON, New Zealand — New Zealanders can expect tax cuts, more police on the streets and less government bureaucracy, according to the three leaders who signed an agreement Friday to form a new government.

The coalition deal ended nearly six weeks of intense negotiations after New Zealand held a general election on Oct. 14.

The deal will see Christopher Luxon serve as prime minister after his conservative National Party won 38% of the vote, the largest proportion of any party.

Luxon thanked New Zealanders for their patience during the negotiations and said each party had made policy compromises to close the deal.

“Our government will rebuild the economy to ease the cost of living, and deliver tax relief to increase the prosperity of all New Zealanders,” Luxon said. “Our government will restore law and order, and personal responsibility, so that Kiwis are safer in their own communities."

The leaders agreed to make cuts to the public service and train 500 more police within two years. They also agreed to change the mandate of the nation's Reserve Bank so it focuses solely on keeping inflation low, rather than its current dual mandate to keep low inflation while maintaining maximum employment.

The deputy prime minister role will be split between the other two leaders. It will be held for the first 18 months of the election cycle by maverick 78-year-old lawmaker Winston Peters, who leads the populist New Zealand First party, before he hands the baton for the remaining 18 months to David Seymour, leader of the libertarian ACT Party.

Peters, who has long had an acrimonious relationship with the news media, took aim at some reporters.

“Look, please don't start off this government with your antagonistic attitude,” he said, grinning, in response to one reporter's question. “You've lost. You lost. Right?”

Peters, who will also be foreign minister, said he didn't foresee any changes to New Zealand's current foreign policy on China. New Zealand depends on China to buy many of its agricultural exports but has also expressed growing concern about China's increased assertiveness in the Pacific.

Seymour, who will take on the newly created role of regulation minister, said the country had been going in the wrong direction under the previous liberal government, with prices and crime rising, and society becoming too divided.

“We must now draw a line under that and work to ensure New Zealanders have hope that a government can, indeed, deliver better public services and return for their hard-earned taxes,” Seymour said.

Under New Zealand’s proportional voting system, parties typically need to form alliances in order to command a governing majority.

On the election night count, the closely aligned National and ACT parties had just enough votes to govern. But a final count, which included special votes, changed the equation and made for the tougher three-way negotiations.

Outgoing Prime Minister Chris Hipkins, who decided he wouldn’t work with Peters, had already conceded to Luxon on election night.

Hipkins, who leads the liberal Labour Party, held the top job for just nine months. He took over from Jacinda Ardern, who unexpectedly stepped down in January, saying she no longer had “enough in the tank” to do the job justice.

Ardern won the previous election in a landslide, but her popularity waned as people got tired of COVID-19 restrictions and inflation threatened the economy.