SYDNEY (Reuters) – New Zealand will trim government spending, provide income tax relief for families and amend the central bank’s monetary policy framework to focus only on price stability, the new right-of-centre coalition government said on Wednesday.
The National-led government of Christopher Luxon, which ended the Labour party’s six-year rule in the Oct. 14 election, outlined policies in a speech delivered by Governor-General Cindy Kiro at the opening of the new parliament.
“Overwhelmingly, the public’s main concern is the high cost of living,” said Kiro, who represents British monarch King Charles III as head of state.
“Reducing wasteful spending will contribute to taking pressure off inflation. Tax relief targeted at middle and lower-income workers will be of practical help to households.”
The government will amend within 100 days the Reserve Bank of New Zealand’s dual mandate on inflation and employment to focus monetary policy only on price stability.
“With the official cash rate hitting its highest point since 2008, creating stress and worry for many mortgage holders and businesses, the Reserve Bank Act’s dual mandate has patently not worked at containing inflation,” Kiro said.
Luxon was sworn in as New Zealand’s 42nd prime minister on Nov. 27 after reaching coalition agreements with libertarian ACT New Zealand and populist New Zealand First, allowing the three parties to form a government.
The governor-general’s speech confirmed the coalition agreements which the parties said would cut red tape, lifting productivity and economic growth. The government will introduce legislation to provide police with more powers to tackle gangs.
The new government will strive to enforce strong foreign, defence and trade policies as the world becomes “increasingly complex and contested,” Kiro said.
Some policies have already drawn criticism. Thousands of people gathered on Tuesday to protest the new government’s policies that they believe are racist.
The government has outlined policies to wind back the use of Maori language and assess how the country’s founding treaty document is interpreted in legislation.
(Reporting by Renju Jose in Sydney; Editing by Josie Kao)
