Wellington Scoop

Coalition deals good for railways, public transport, regions, even farmers

BusinessDesk report by Pattrick Smellie
The agreements between the Labour, New Zealand First and Green parties are good news for investment in railways, public transport, regional development, and green technology, and even farmers get a break on how quickly or fully they will be brought into the emissions trading scheme.

In Wellington today, Prime Minister-elect Jacinda Ardern released the coalition agreement with NZ First and the confidence and supply it will have with the Green Party to secure a six-seat majority in the 120-member Parliament, promising to “work together to provide New Zealand with a transformational government”.

Most of the details come as little surprise, reflecting the overlap between the policies the three parties campaigned on before the Sept. 23 election.

Ministerial responsibilities will be released tomorrow, but notable is the decision to give the climate change portfolio to the Greens, while NZ First ministers will have key infrastructure, regional development, foreign affairs, state-owned enterprises, forestry and the children’s portfolio, which Ardern had been widely tipped to take.

Other key Green portfolios are Land Information, covering the Overseas Investment Office, Conservation, and Women.

Among notable initiatives to get the nod are a $1 billion-a-year Regional Development (Provincial Growth) Fund, a NZ First policy, and endorsement for the Greens’ $100 million green infrastructure fund, which they hope to leverage into $1 billion of new investment in green technologies.

Labour gave ground on its proposal to tax commercial water use, to the extent that there will be no such move “in this parliamentary term”.

Among areas where NZ First did not get its way: the review of the Reserve Bank Act will not include exchange rate targeting; the ETS remains in place, and there is no mention in the agreement of Labour agreeing to repealing recent Resource Management Act reforms enhancing Maori consultation provisions and which NZ First labelled “separatist”.

Ardern said the new government was determined there would be a “ban” on the sale of existing homes to non-resident foreign buyers, but remained opaque on how that might be achieved while keeping New Zealand in the group of 11 countries still supporting the controversial Trans Pacific Partnership agreement, which may progress at the November APEC leaders’ summit in Vietnam if renegotiations can either be avoided or finessed in time.

“We will find the mechanism in order to meet that goal,” she said, refusing to be drawn on whether existing provisions allowing punitive tax measures to effectively discourage foreign investment in existing homes.

NZ First leader Winston Peters volunteered that high stamp duties had not worked in other countries.

The coalition will also “strengthen the Overseas Investment Act”, with a view to existing provisions being better enforced, and a “comprehensive register of foreign-owned land and housing” will be established.

Existing irrigation subsidies under the previous government’s Crown Irrigation scheme will be honoured and farmers will enter the ETS only if the independent Climate Commission to be established by the new government recommends it. If so, 95 percent of agricultural emissions would not be covered by the ETS for a start, compared with Labour’s pre-election policy that 90 percent free allocation would apply.

The NZ First agreement also promises reviews of government procurement to improve opportunities for New Zealand businesses, investigate capitalising KiwiBank to allow it to become the government’s banker when the current contract with Westpac expires, increase penalties for fraud and corporate tax evasion, and review how unemployment is measured.

The minimum wage will rise progressively to $20 per hour over the next four years, starting with a move to $16.50 in April 2018, but with the track for further increases yet to be determined and the final increase to that level occurring in April 2021.

As well as the regional investment fund, an NZ Forestry Service will be re-established, although the Greens’ policy of planting one billion trees is not specifically mentioned.

The NZ First agreement includes a commitment to make the government transport fleet “emissions-free” by 2025/6 “where practicable”.

NZ First also secured a commitment to “introduce and pass” a ‘waka jumping bill’, to prevent an MP elected for one party from joining another without first facing an election or by-election, reflecting NZ First’s experience in the 1996-99 government, when several of its MPs abandoned the party.



  1. Ben Ross, 24. October 2017, 20:10

    Labour-Greens deal: Fewer roads, more trains, cycling and walking. [via twitter]

  2. Stop Trexit, 24. October 2017, 22:41

    Will NZ First keep its promise of keeping and investing in Wellington’s trolley buses?

  3. John Lawes, 24. October 2017, 23:06

    What about Wellington’s trolley-buses?

  4. Marion Leader, 25. October 2017, 16:17

    Question: “Will NZ First keep its promise of keeping and investing in Wellington’s trolley buses?”
    Answer: “It’s a coalition and needs Labour and the Greens to lead the way on this one.”

  5. Stop Trexit, 26. October 2017, 11:08

    So Marion, we can assume the trolleys are history since Labour has said nothing and done nothing to retain Wellington’s trolleys.