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New Zealand Government Update

After one of the strangest elections in New Zealand history, New Zealand finally has a government. Labour's Jacinda Ardern has been crowned New Zealand Prime Minister by Winston Peters and New Zealand First. 

Through this, we will go through the structure, the policy information we have and what the implications are for National. 

Structure

The Government will be a Labour - NZ First government that has a confidence and supply agreement with the Green Party. This is not a Labour - NZ First - Green government as many commentators are stating. There is a Labour - NZ First Coalition agreement which is looking to give Winston Peters the Deputy Prime Minister job (the same job he held under National under Jim Bolger). New Zealand First will get four ministerial positions (it is unclear if this includes Winston or is including Winston) and one Parliamentary Undersecretary. 

The Ministries that New Zealand First will get are:

• Foreign Affairs
• Infrastructure
• Regional Economic Development
• Internal Affairs
• Seniors
• Defence
• Veterans' Affairs
• Children
• Forestry
• State Owned Enterprises
• Racing
• Associate Finance
• Associate Education and an Under-Secretary for Foreign Affairs and Regional Economic Development

The Greens have a confidence and supply agreement with Labour. This government represents the first time that the Green Party have had Ministers, even if they are outside the cabinet. 

The Ministries that the Greens will get are: Climate Change, Associate Finance, Conservation, Women, Land Information New Zealand, Associate Environment, Statistics, Associate Transport, Associate Health and an Undersecretary to the Minister of Justice (Domestic and Sexual Violence).

Prime Minister - designate Ardern has dismissed the fact Climate Change as a minsitry is outside the government as something she can do as she doesn't need convincing on the subject.

The full roll out of Ministries will happen at the swearing in ceremony later this week. 

Considering the Labour gains from the Maori Party, the Maori Development portfolio is one that is promoting a lot of speculation as to who will receive that portfolio. This considering that Deputy Labour Leader, Kelvin Davis is likely to pick up Corrections as one of his portfolios in the government. 

Today the Labour - NZ First agreement and the Labour - Green agreements were both signed. 

Here are the substantive policies inside the agreements:

• Regional development: A $1 billion per year Regional Development (Provincial Growth) Fund

• Rail: Significant investment in regional rail.

• Forestry: Re-establish the New Zealand Forestry Service, and planting 100 million trees per year in a Billion Trees Planting Programme.

• Auckland Port: Commissioning a feasibility study on moving the Ports of Auckland to Northport

• Biosecurity: A funding increase to Biosecurity NZ and a select committee Inquiry into biosecurity

• Irrigation: Honour existing Crown Irrigation investment commitments

• Monetary policy: Review and reform the Reserve Bank Act

• Minimum wage: Increase to $20 an hour by 2020, with the final increase to take effect in April 2021

• Tax: Increase penalties for corporate fraud and tax evasion, and introduce a tax on exports of bottled water

• KiwiBank: Investigate KiwiBank's capabilities to become the Government's banker when that contract is next renewed.

• Foreign ownership: Strengthen the Overseas Investment Act and create a comprehensive register of foreign-owned land and housing

• Research and development: Increase R&D spending to 2 per cent of GDP over 10 years

• Health: Re-establish the Mental Health Commission, annual free health checks for seniors with the SuperGold card, free doctors' visits for all under 14s, increasing the age for free breast screening to 74

• Education: Restore funding for gifted students and Computers in Homes, pilot counsellors in primary schools, free driver training for all secondary school students, restart Te Kotahitanga teacher professional development

• Defence: Re-examine the Defence procurement programme

• Housing: Establish a Housing Commission

• Law and Order: Work towards 1800 new police officers over three years, investigate a volunteer rural constabulary programme, increase funding for Community Law Centres, establish a Criminal Cases Review Commission

• Social Development: More funding for family violence networks, including Women's Refuge and Shakti, pilot a Youth Education, Training and Employment programme and provide 800 extra places for the LSV scheme, introduce Ready for Work programmes

• Superannuation: Keep age of eligibility at 65

• Environment: Move to an emissions-free government-vehicle fleet by 2025/26, introduce a Zero Carbon Act and independent Climate Commission, which will consider including agriculture into the ETS, establish a tyre stewardship fund, piloting alternatives to 1080, work towards a Kermadec Ocean Sanctuary

• Conservation: More funding for the Department of Conservation

• Democracy: No new parliamentary building this term, an independent review of electoral processes and enrolments, and a review of the parliamentary processes, and pass a 'Waka Jumping' bill

• Immigration: Ensure work visas reflect skills shortages and cut down on low quality international education courses, and take action on migrant exploitation, particularly international students

• Pike River: Commit to re-entry to Pike River

• Other: Build a Maori Battalion museum at Waitangi, review retail-power pricing, allow a conscience vote on a NZ First euthanasia referendum bill, a Public Inquiry "a decade after Shand" to investigate the drivers of local government costs, support NZ First's racing policy, work towards a Free Trade Agreement with the Russia-Belarus-Kazakhstan Customs Union, record a Cabinet minute regarding the lack of process followed prior to the National-led government sponsorship of UNSC2334, concerning the Israeli settlements in Palestinian territories occupied since 1967

The New Zealand Green Party and Labour have a separate confidence and supply agreement which has a number of policy concessions in them in return. These include:

• Climate Change: Introduce a Zero Carbon Act and establish an independent Climate Commission (which will also look at transitioning to 100 per cent renewable electricity by 2035), analyse all new legislation for climate impact, establish a Climate Change board of public sector CEOs and a set of indicators for environmental, social and economic sustainability

• Transport: Investigate a Green Transport Card to reduce the cost of public transport for low-income people and welfare recipients, prioritise National Land Transport Fund towards rail infrastructure as well as cycling and walking, cancel Auckland's East-West motorway link, work towards light rail from Auckland city to airport

• Green economy: Government-backed Green Investment Fund of $100 million to stimulate up to $1 billion of new investment in low carbon industries by 2020, assist agricultural sector to reduce biological emissions and improve water quality

• Environment: Increasing conservation funding and predator control, commit to minimising waste to landfill by reducing all waste classes by 2020

• Rivers and lakes: Stronger regulation to clean up waterways, fund freshwater enhancement, wind down Government support for irrigation, better enforcement of the Resource Management Act

• Ocean Sanctuaries: Work with Maori to establish the Kermadec Ocean Sanctuary as well as a Taranaki blue whale sanctuary

• Welfare: Ensure access to entitlements, remove excessive sanctions, review Working for Families, provide safe sleeping environments for vulnerable families

• Health: Free counselling for under-25s, increase funding for alcohol and drug addiction services, referendum on the personal use of cannabis by the 2020 election

• Education: Ensure children with special needs and learning disabilities can fully participate in school

• Pay equality: Eliminate the gender pay gap within the core public sector

• Homes: A rent-to-own scheme will be part of Labour's Kiwibuild programme, increase in the number of homes insulated

• Refugees: Adequately fund and support family re-unification for refugees

 

New Zealand Election: Final Update

With New Zealand heading to the polls after what has been one of the more tumultuous campaigns since the advent of the MMP voting system; New Zealanders go to the polls. 

The basic tenants of tomorrow in our analysis go like this:

  1. The current governing arrangement (National - United Future - Act - Maori Party) will not be returned, despite this being Bill English's preferred option.
  2. The Labour-Green alliance under the Memorandum of Understanding is unlikely to be able to govern in its own right. 

United Future will lose its place in Parliament after Peter Dunne announced he was retiring as the MP for Ohariu and United Future not polling at the 5% threshold to get a List MP elected.

Whether or not Hone Harawira and his Mana Party can get elected in Tai Tokerau on the back of the 2 for 1 campaign he is running and whether or not the Maori Party can get 2 MPs back into Parliament will be critical in the dream scenario of the left where they can govern with a Labour-Green - Maori - Mana block. 

The fact remains: It is most likely that Winston Peters and his New Zealand First Party will become the King or Queenmaker to form the next Government of New Zealand. 

Winston Peters has governed with both National and Labour previously. He served as Deputy Prime Minister to Jim Bolger and Foreign Minister to Helen Clark in her third government. 

Winston Peters has already stated that he will not enter into a government with the Green Party. 

This means that the likely situations for the next government are:

  1. National - NZ First
  2. New Zealand First- Labour (with Greens in a Supply Agreement)
  3. Labour - Green - Maori - Mana

This is how we see the most likely scenarios, however, picking the combination from an MMP election is always difficult and predicting the results of negotiations to happen on a hypothetical equation of the Parliament is even more fraught.

Our team will be tweeting tomorrow night as the results come in 

New Zealand Election Update

New Zealand elections are conducted using the MMP voting system - Mixed Member Proportional. Its defining characteristics are a mix of MPs from single-member electorates and those elected from a party list, and a Parliament in which a party's share of the seats roughly mirrors its share of the overall nationwide party vote.

It is a proportional system, which means that the proportion of votes a party gets will largely reflect the number of seats it has in Parliament.

Each voter gets two votes.

The first vote is for the political party the voter chooses. This is called the party vote and largely decides the total number of seats each political party gets in Parliament.

The second vote is to choose the MP the voter wants to represent the electorate they live in. This is called the electorate vote. The candidate who gets the most votes wins. They do not have to get more than half the votes.

Under current MMP rules, a political party that wins at least one electorate seat OR 5% of the party vote gets a share of the seats in Parliament that is about the same as its share of the party vote.

For example, if a party gets 30% of the party vote it will get roughly 36 MPs in Parliament (being 30% of 120 seats). So if that party wins 20 electorate seats it will have 16 List MPs in addition to its 20 Electorate MPs.

Coalitions or agreements between political parties are usually needed before Governments can be formed.

Going into this election, National governs with the Support of United Future and its MP for Ōhāriu, Peter Dunne, Maori Party and their MPs and Co-Leaders Te Ururoa Flavell, MP for Waiakiri and Marama Fox who was elected as a List MP and is the Maori Party Candidate for Ikaroa-Rāwhiti and David Seymour from ACT who is the MP for Epsom. 

This election comes on the back of some major changes in New Zealand politics. Firstly, with the mid-term resignation of John Key and the ascension of Bill English to the top job. In this election, he seeks a mandate in his own right. Secondly, we see the mid-campaign resignation of Opposition Leader Andrew Little and the ascension of his Deputy Jacinda Ardern. Her rise to the leadership with Kelvin Davis as her Deputy Leader has given the Labour campaign a new momentum and energy that Labour has not seen since the election defeat of Helen Clark.

This has seen Labour's poll numbers rise to 32.5% according to Roy Morgan, 37% according to UMR and 33.1% (Reid Research). While UMR traditionally has a Labour bias, all three polls show National falling but Labour making most of its gains from the Green Party who have seen support fall since the resignation of one of its Co-Leaders, Metiria Turei.

At the last election, National achieved its best result under MMP, winning 60 seats and Labour had its worst election ever. The Labour Party’s share of the vote in 2014 (25.1%) is the lowest it has achieved in any MMP election to date; it is also the lowest share for the Labour Party in any election since 1922 when its 23.7% vote share was third-highest behind the Liberal and Conservative parties.

There are 25 MPs who have self-identified as being of Māori descent or 21% of the total Parliament; there are a record eight MPs who identify as being of Pacific Peoples ethnicity, or 7% of the Parliament; there are five MPs who identify as being of Asian ethnicity, 4% of the Parliament.

Our analysis of recent NZ wide polling is that either National or Labour would need the votes of New Zealand First and Winston Peters to govern.

Newshub-Reid Research poll has New Zealand First at 9.2% and third in the party standings. This poll has neither the Greens-Labour Coalition and the National-ACT-United Future Coalition couldn't govern without New Zealand First. 

According to the TVNZ-Colmar Brunton poll the Green Party could be out of Parliament as a result of the Labour new leader's popularity and the fall-out from Metiria Turei's resignation. The Greens have dropped 11 percentage points to 4 percent, according to the TVNZ-Colmar Brunton poll - its worst result in the poll since 2009. In this poll, New Zealand First polls at 10%.

With United Future Leader, Peter Dunne resigning from Parliament as the MP for Ohariu; this leaves National in a dangerous position of not having enough support party MPs without Winston Peters.

It should be noted that in neither poll, National polls over the 45% 'firewall' it needs to be sure of its majority against the Labour-Greens Coalition.

What we are seeing in New Zealand with the rise of Ardern is similar to what we saw in the United Kingdom, the condensing of the vote around the major parties as voters sure up their major party and move away from 'split' voting, which is normally voting differently between the electorate vote and the party vote. 

Therefore, with an election on September 23; people should be watching for the following:

  • How high can the 'Jacinda Effect' take Labour?
  • Can the Greens recover? 
  • Can the National vote get above 45%

We also say to people to watch the debates. John Key was an excellent debator and gained momentum from the debates. Right now the momentum is certainly with Ardern and with Bill English moving to centre his campaign on spending commitments to arrest the momentum back from Labour, the debates will be key.