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New Zealand had an election. Here are the top changes that the new national led coalition government in New Zealand will bring for ordinary New Zealanders, including a mix of economic, social, and policy shifts.
Here are seven key changes.
Government spending and taxes
The coalition intends to cut government spending by approximately 600 million annually, and to reduce taxes.
They have committed to return New Zealand to surplus, spend less than we make, while aiming to decrease the size of deficits over three years. The ACT party, part of the coalition, plans to go further by eliminating some ministries and reducing public service jobs. They think there’s too many.
National plans to allow foreigners to buy houses worth more than two million bucks, taxed at fifteen percent. Forecasting an increase in government revenue. They also want to reintroduce tax breaks for property investors to deduct mortgage interest costs against rental income costs.
Central Bank Focus
The coalition aims to redirect the central bank’s focus solely on inflation, moving away from its current dual role and dual mandate that also includes employment and inflation.
Foreign policy and defence
There are plans to prioritise a free trade agreement with India and increase defence spending to reach 2 percent of GDP by 2030. The coalition partners have also expressed a desire to disengage from the United Nations Declaration on the Rights of Indigenous People.
National has pledged to scrap free prescriptions and restore a $5 prescription fee with a cap of $100 per year for prescription fees for most families. Free prescriptions will remain for superannuitants and those on low incomes via the Community Services Card and The Super Gold Card.
The fair pay agreements which established a pay floor, through industry wide deals, will be removed. The 90 day trial period will be reintroduced, making it easier for employers to dismiss employees within their first 90 days of service.
Social welfare and housing regulations
Benefit increases will be decoupled, be pulled away from wages and instead tied up with the rate of CPI inflation. The coalition also plans to reverse no-cause eviction bans and reduce the brightline test period for tax free residential property sales to two years.
That’s a wrap
These planned changes by the new coalition government are expected to have significant implications for both the economy, the housing market, foreign policy, social welfare, health care and labour laws, and the public service.
It is important to note that as the coalition agreements are still being finalised, some policies may be subject to further negotiation and change.
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