Coalition Cabinet highlights

The Cabinet announced on 24 November, 40 or so days after voters voted, is a mix of seasoned politicians and novices, joined together in the MMP era’s first three-way mash-up and guided – for now – by two detailed, wordy agreements. 

There is no preferable way to either shape a coalition arrangement or draft agreements between parties. Since 1996 the varied combinations of parties have approached the task differently. As a rule of thumb, the more particular the agreement/s the less trust exists between the signatories. No surprise then that National has opted for two agreements, each highly specific. These give all three parties a clear roadmap to follow, but also many small policy promises that may create diversions and bumps in the road.

National has managed to keep its chief policy promise, tax cuts, but at a high price. The ban on foreigners buying houses remains firmly in place (inevitable, given NZ First’s strong stance on this) and finding the NZ $740m that the proposed tax on foreign buyers was supposed to raise from other places has already seen the new Government quickly on the backfoot. A criticism of the planned changes to New Zealand’s smoke-free legislation was also quick to surface. But there is enough binding the three co-governing parties – law and order, public sector cuts, the reset on the Resource Management Act (RMA), employment laws and Crown/Māori relations – to expect a relatively smooth start. 

The coalition agreements signal there is a lot to do.

On the pre-Christmas list:

• A (very) mini-Budget
• Repealing the Fair Pay Agreements Act
• Repealing the Natural and Built Environment Act 2023 
• Repealing the Spatial Planning Act 2023
• Immediately stop work on:
• Three Waters (with assets returning to council ownership)
• Auckland Light Rail
• Let’s Get Wellington Moving
• Lake Onslow Pumped Hydro proposal

Potential swells ahead

While the immediate workplan is clear, and likely to be relatively smooth, there is no doubt that challenges lie ahead for the coalition. Finance Minister Nicola Willis has already been briefed by Treasury on the challenges facing the New Zealand and global economies in the coming months and years. Balancing National’s desire to reinvigorate the economy and invest in infrastructure  with New Zealand First’s cautious, if not allergic, approach to foreign investment and immigration will require dexterity. The country’s infrastructure challenge is greater than our domestic ability to fund it. Nicola Willis and Chris Bishop will have real challenges here. 

Also worthy of thought – whither New Zealand’s environmental credentials? Both the Climate Change and Environment portfolios sit outside of Cabinet. A strong signal that their importance is to be de-emphasised. There may be eyebrows raised locally, and on the global stage. 

Getting to know the new Cabinet – Who are they and the challenge that lies ahead

The National (14), ACT (3) and NZ First (3) parties all have ministers inside Cabinet. There are also eight ministers outside Cabinet and two Parliamentary undersecretaries. Together, they are an amalgam of the rehabilitated, the resurrected and the raring-to-go.

The new Cabinet is led by Prime Minister, Christopher Luxon, whose rise to the top job has been meteoric, and who will now attempt to apply his internationally-honed C-suite skills to a series of formidable challenges, repeals and reforms embedded in the guiding documents signed at the late-morning ceremony. 

The big policy reforms, baked into the coalition agreements, span far and wide: 

• resource management;
• water services;
• workplace relations;
• Treaty of Waitangi principles;
• prison sentences; and 
• the Reserve Bank’s inflation-fighting mandate.

Coalition risk management, discipline and co-ordination as this process unfolds will be all-important, as will setting public expectations. The policy reset now mandated and underway will be contentious. The new Prime Minister’s promise that his team will deliver may yet backfire, given the complexity of many issues and the uncertainty of the political environment.  

The new Deputy Prime Minister (until May 2025), Winston Peters, will need to be shown the respect he craves. First elected in 1978, he has returned from the political wilderness – yet again – and secured some big portfolio and funding wins for NZ First. He regains the foreign affairs portfolio, along with that of (horse) racing. It is widely accepted he will excel in Foreign Affairs – he did last time. But Peters has only worked well previously with leaders who were prepared to bend. A three way coalition makes that more difficult. 

National’s Nicola Willis, another fast riser, assumes the role of Minister of Finance, and will also be Minister for Public Service and Minister for Social Investment, along with an associate role on Climate Change to Simon Watts (a minister outside Cabinet).

There are more than a few echoes here of the policy trajectory taken by party doyen Bill English, the former Finance Minister and Prime Minister who is widely credited as the author of his party’s ‘social investment’ approach to social policy 15 years ago. 

Willis has a tough job. Revenue for on-going tax cuts will have to be found, and it’s the details and dynamics of the push for cost savings inside the bureaucracy and other places - to then be recycled into tax cuts - that will show how well the new Government performs in its first six months. Wellington, home of many of the country’s public servants, is already bracing for cuts. One of Willis’ first tasks will be calling in public sector leaders and asking them to get chopping. 

Chris Bishop has been an MP since 2014, with a strong track record in Opposition on the housing, infrastructure and resource management issues. He assumes these massive, influential and interlinked portfolios in the new Cabinet, including that of Minister Responsible for RMA reform.

Progress with RMA reform will shape the Government’s fortunes in a number of ways, given the country’s infrastructure backlog, a shortage of affordable housing, challenges over the resilience of our cities to climate change, and the expectations the corporate ‘big end of town’ has towards the parties – National and ACT – it enthusiastically donated to during the election campaign.

On RMA, the coalition agreement with ACT promises to replace the existing Act with new laws premised on the enjoyment of property rights as a guiding principle. As previous Ministers have found, changing the RMA is time consuming and difficult. Bishop has a lot more on his plate. He also becomes Leader of the House, an important role at any time but even more so given the pace with which Luxon is intent on driving the new Government’s 100-day plan forward (Parliament will resume on 4 December and run until 21 December, and for much of this period the House could be under urgency). Bishop will by key to ensuring Peters and Seymour are fully informed and involved. He is also a member of the committee of leaders and deputy leaders who will manage any disputes between the coalition partners. 

Dr Shane Reti is the new Health Minister and Minister for Pacific Peoples. A former GP, with no previous experience in Government, he will now oversee the largest single area of spending in the Government’s budget, and has pledged to unpick major elements of the sectoral reforms which were implemented only last year. Labour’s health reforms are still in their early stages and many in the sector report being exhausted or looking to work elsewhere. This is a very big ask for any politician, let alone a newbie. 

Another National Party ministerial workhorse will be Simeon Brown, now Minister for Energy, Minister for Local Government, Minister of Transport, Minister for Auckland. 

As an Auckland MP, Brown will face the challenging task of staying on good terms with that city’s maverick and fiscally-challenged Mayor, Wayne Brown (no relation), while following through on the Coalition’s pledge to build a number of ‘roads of national significance.’

But if the regional development aspirations of Shane Jones (see below) see Northland emerge as a credible replacement for Auckland’s CBD-adjacent port operations, then Auckland Mayor Wayne Brown may find reason to admire the other Brown and his colleagues.

Simeon Brown has other legwork to do in the regions too, including finding – and funding – a replacement scheme to the last Government’s ‘affordable waters’ programme. 

Other key ministers include Paul Goldsmith, the new Minister of Justice and Minister of Treaty Negotiations , and former National leader Judith Collins. Collins has a very full list of responsibilities as Attorney General, Minister of Defence, and Minister of Science, Innovation and Technology. Collins’ rehabilitation from the dark days of the 2020 election defeat now looks complete. Expect her to be one of the Government’s high performers. Erica Stanford retains her education and immigration roles, and as expected Mark Mitchell retains his corrections and police roles, and picks up Minister for Emergency Management and Recovery.

Todd McClay is the new Minister of Agriculture and Minister for Trade, both critical roles given the extent to which the New Zealand economy is reliant on the sale of its farm commodities overseas.

Securing a free trade agreement (FTA) with India would probably secure the new minister a knighthood. The FTA is a grand ambition that appeals to the international and bullish instincts of prime minister Luxon, although the back channels at MFAT have been signalling that a deal with India is unlikely.

A new face from National in Cabinet is Tama Potaka. The former lawyer from Hamilton has only been in Parliament since last year, now he is Minister of Conservation, Māori/Crown Relations and Māori Development. All three portfolios are likely to create policy flashpoints and, with an invigorated and stronger Te Pati Māori in Parliament, be targets for Opposition attacks. The coalition’s reset on Māori/Crown relations in particular is already shaping up as a potentially divisive issue, but one that is important for both the minor partners to the coalition (for different reasons). Potaka is likely to face pressure from all sides.

National also brings into Cabinet Louise Upston picking up the community, social development and child poverty portfolios, Melissa Lee with economic development, ethnic communities and media roles, and Matt Doocey with the mental health, ACC, youth and tourism portfolios.

ACT Party leader David Seymour will become Deputy Prime Minister from 31 May 2025 – a half-way point in the parliamentary term that will provide an important marker on how smoothly the coalition is travelling.

In the meantime, Seymour’s responsibilities include Minister of Regulation – which is actually all about removing regulations and trimming public service personnel and costs – Associate Minister of Finance and Associate Minister of Education.

In the last of these roles Seymour will reprise the partnership (or charter) schools experiment of the 2008-17 National-led Government. 

Seymour’s party has three ACT party colleagues alongside him at the Cabinet table, including Brooke van Velden, as Minister of Internal Affairs and for Workplace Relations, and Minister of Courts Nicole McKee.

Van Velden will oversee a swift repeal of the previous Government’s Fair Pay Agreements legislation (by Christmas), as an important signal of the new Government’s pro-business credentials. The 90 day trial period will also be extended to all businesses, though the coalition agreement sets no timeframe for this change. 

Notable appointments outside Cabinet include ACT’s Andrew Hoggard, a former President of Federated Farmers, who takes on the role of Associate Minister of Agriculture and Minister for Biosecurity.

NZ First’s deputy leader Shane Jones returns to the Cabinet ranks after a three-year hiatus, taking on an influential and fiscally bountiful set of portfolios. The most significant of these are the posts of Minister of Regional Development, Minister for Resources, and Minister for Oceans and Resources.

Jones will oversee a newly-announced NZ $1.2 billion regional infrastructure fund, a notable feature of the coalition agreement. He will certainly enjoy a second turn as a relentless booster for activity and employment in the regions, especially his (and Peters’) home patch of Northland. Their dream of moving Auckland’s port to the North has never dimmed. Realistically, this term is their last chance at this.

Peters also has Casey Costello in Cabinet with him and Jones as Minister of Customs, Minister for Seniors, Associate Minister of Health, Associate Minister of Immigration and Associate Minister of Police.

These insights into Election ’23 are brought to you in association with GRC Partners + Porter Novelli Ltd, providers of public affairs and strategic communications counsel: www.grcpn.nz