New Zealand Government’s Focus for Next 3 Months: Tax Reductions, Enhancing Law Enforcement, Streamlining Public Services
Prime Minister Christopher Luxon, following the government’s ‘First Hundred Days’ plan, has outlined a bold set of reforms.
Building on the ‘First Hundred Days’ initiative, Prime Minister Christopher Luxon of New Zealand has introduced the government’s next action plan. This plan outlines crucial steps that will be taken by June 30 to enhance the economy, uphold law and order, and enhance public services.
“There is always more work to be done, which is why we are supplementing the 100-Day Plan with our next action plan for New Zealand,” stated Mr. Luxon.
Over the next three months, the focus of the government will be on “rebuilding the economy, addressing the cost of living, restoring law and order, and delivering improved public services,” he added.
The government’s objective is to reduce what it deems as “wasteful spending” while investing in crucial services like health, education, and law enforcement. Initially, there were plans to cut the Suicide Prevention Office, but after public backlash, Health Minister Matt Doocey clarified that it was only a proposal, and the office will remain operational.
Public Service Reductions
The government is also moving forward with cuts to public service personnel numbers, with potential layoffs affecting up to half of the staff at some ministries. The affected agencies and their current staff numbers as of the end of 2023 are as follows:
- Ministry of Social Development (9,482 staff)—currently offering mass voluntary redundancies, potentially affecting hundreds of workers, according to the Public Service Association.
- Ministry for Primary Industries (3,767 staff)—proposing to cut around 231 positions (384 roles will be eliminated, but 40 percent are vacant).
- Ministry for Pacific Peoples (121 staff)—set to lose 63 positions, half of the total staff count.
- Ministry of Transport (232 staff)—already reduced by 24 positions, most of which were vacant.
- Customs (1,366 staff)—33 staff have accepted voluntary redundancy or early retirement with further options being considered to meet required savings.
- Crown Law Office (229 staff)—disestablishing 17 roles.
- Ministry for Ethnic Communities (77 staff)—reviewing the reduction in permanent staff by 14 percent, potentially affecting around nine jobs.
Next steps include the Department of Conservation, the Department of Internal Affairs, and Oranga Tamariki announcing their plans for workforce reductions in the coming weeks, as confirmed by the Public Service Association.
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Spending on contractors and consultants will also need to be slashed, with many agencies laying out over $20 million annually, like Statistics NZ ($28.3 million); Conservation ($35 million); Inland Revenue ($48.7 million), and the Justice Department ($42.4 million). Defence is one of the few that didn’t make it well into to double figures, spending $9.1 million on consultants. In contrast, the highest reported spend in that category to date is by the Ministry of Business, Innovation, and Employment, at $104.4 million in addition to its 6,396 employees. That was closely followed by the Department of Internal Affairs at $122.7 million.
Mr. Luxon describes this process as “reduc[ing] wasteful spending while investing in frontline services” in his announcement. However, there are no specific commitments to frontline services in the plan, beyond some moves to help combat truancy and “strengthening” teacher training—particularly on numeracy, literacy, and assessment.
Tax Cuts Promised
The government is cutting spending in order to be able to deliver on its major pre-election promise, repeated in the current three-month plan: “Deliver[ing] tax relief to hardworking New Zealanders,” despite a weakening economy. That will encompass personal income tax relief, a “FamilyBoost childcare tax credit,” and a freeze on fuel tax until the end of 2026.
Other pre-election commitments reiterated in the most recent plan include restoring “Three Strikes” for serious repeat offenders, and establishing a Regional Infrastructure Fund, both demanded by National’s coalition partners. Rehabilitation, reintegration, and safety outcomes in the corrections system will be improved, including by extending eligibility for offence-based rehabilitation programmes to remand prisoners.
Farmers will be pleased to hear the government intends to finalise policy to keep agriculture out of the Emissions Trading Scheme, and will commence an independent review of methane science and “targets for consistency with no additional warming from agricultural methane emissions.”
It looks set to allow the return of mining, promising to “take decisions on the removal of the ban on offshore oil and gas exploration” and will commission a study into New Zealand’s fuel security, “including investigating the feasibility of reopening the Marsden Point Oil Refinery.”
