SGI 2022 | New Zealand | Executive Summary

Executive Summary

Recent Governments Experts

SGI experts on New Zealand

Olli Hellmann

Olli Hellmann is Senior Lecturer in Political Science at the University of Waikato, Aotearoa New Zealand. He specialises in the politics of Asia-Pacific, and has published extensively on issues of democratic quality and governance. Recent publications include Stateness and Democracy in East Asia (Cambridge University Press, co-edited with Aurel Croissant), “State capacity and elections in the study of authoritarian regimes” (special issue of International Political Science Review, co-edited with Aurel Croissant), and “The historical origins of corruption in the developing world: a comparative analysis of East Asia” (Crime, Law and Social Change).

Jennifer Curtin

Jennifer Curtin is a Professor of Politics and Director of the Public Policy Institute at the University of Auckland. Her research and publications focus on Australian and New Zealand electoral politics, trans-Tasman policy innovations, sport, and gender, politics and policy. Jennifer is the Academic Director of Auckland’s Master of Public Policy Programme and teaches comparative public policy, lesson drawing and the politics of policy. She also runs an internship course for postgraduate policy students, working with a range of government agencies, policy consultancies and non-profit organisations. She was a NZ-Fulbright Senior Research Scholar in 2012 and regularly speaks about issues connected with her research to national and international media outlets.

Patrick Köllner (Coordinator)

Patrick Köllner has been director of the Institute of Asian Studies, German Institute of Global and Area Studies (GIGA) since 2011. He is also a professor of political science at the University of Hamburg. His research focuses on political regimes and organizations in East Asia and in comparative perspective. Between 2007 and 2013 he co-edited the yearbook Korea: Politics, Economy and Society. Köllner holds a doctorate in political science from the Humboldt University of Berlin and a venia legendi in political science from the University of Trier.

Like other OECD countries, New Zealand has been experiencing high inflation rates due in part to increased government spending during the COVID-19 pandemic, global supply chain disruptions, near-full employment and geopolitical conflicts. Although inflation levels in New Zealand have been somewhat lower than the OECD average (7.2% compared to 9.5% in 2022), the rising prices for goods and services have exacerbated existing social inequalities.

Lower-income groups have been particularly hard hit by inflation, as they tend to spend a greater share of their income on basic necessities such as food and housing. The annual food inflation rate peaked at 12.5% in June 2023, fueling a 165% increase in food bank demand compared to 2020. Upward pressure on rents has caused the public housing waitlist to balloon, with the recorded median time taken to find housing rising to nearly 300 days. Meanwhile, the number of households that have lived in emergency housing for more than two years doubled between 2022 and 2023. Additionally, mortgage rates increased significantly, leading to a rise in the number of homeowners spending 18% of their income on interest payments – twice as much as in 2021 (Edmonds 2023).

In March 2023, amidst the “cost of living” crisis and declining popularity figures, Prime Minister Chris Hipkins (who took over from Jacinda Ardern in January) decided to refocus on “bread and butter” policies and slashed the Labour-Green government’s reform program. The targets of what the New Zealand news media described as a “policy bonfire” included many initiatives aimed at mitigating climate change, such as the clean car upgrade program, the Auckland light rail project and other investments in public transport.

However, this shift in policy priorities did not save the Labour-Green coalition from losing the general election in October. Instead, the election produced a parliamentary majority for a right-of-center coalition among the National Party, ACT and NZ First. Labour was the big loser of the election, dropping from 65 to 34 seats, while other parties increased their representation, including the Green Party (plus five seats) and Te Pāti Māori (plus four seats).

The new government under Prime Minister Christopher Luxon has announced plans to address the ongoing “cost of living” crisis through tax cuts, credits and rebates. The National-led coalition intends to finance these tax policies primarily through public service cuts and new taxes. One proposed measure is a tax on commercial and industrial buildings.

Although Luxon supports climate change action in principle, his government has reversed several pro-environmental policies implemented by the Labour-Green coalition, including the Clean Car Discount and the ban on at-sea oil and gas exploration. Moreover, the new government has indicated plans to revisit the greenhouse gas emission targets set out in the Zero Carbon Act and possibly lower the targets for the agricultural sector, which contributes almost half of New Zealand’s total greenhouse gas emissions (Wannan 2023).

The National-ACT-NZ First coalition has also criticized Labour’s health policies, stating it will repeal the “future generations” smoking ban and abolish the Māori Health Authority (Te Aka Whai Ora), which was established in July 2022 to address disparities in health outcomes for the Māori population. The National Party’s coalition partner, ACT, is also seeking to redefine the principles and role of the Treaty of Waitangi in ways that may undermine the partnership with and active protection of Māori.

Citations:

Edmonds, S. 2023. “Here’s how bad mortgage stress might get, Reserve Bank says.” https://www.stuff.co.nz/business/money/301000079/heres-how-bad-mortgage-stress-might-get-reserve-bank-says