Democracy Briefing: First Among Equals? New Zealand First’s year in government

For the governing coalition of National, Act and New Zealand First, its first year in power can be divided into three distinct periods. During the first phase, spanning from its formation in late November 2023 until early March, the coalition increased in popularity. This was the era of “the great rollback”, as it reversed many of the previous government’s most unpopular policies and imposed layoffs across the public service.

This surge in support ended in early March, around the time Christopher Luxon admitted he was refurbishing Premier House, the prime minister’s official residence, and charging taxpayers to live in his own Wellington apartment.

Over the next six months sentiment towards the government declined then recovered. It delivered its first budget and many of its flagship policies on crime and education. For the final three months of the year public support declined again. This is the period of the deepening recession, the broken promise on Dunedin hospital, the debate about the Treaty Principles Bill.

As Parliament closes for the summer, some polls show that if an election were held tomorrow the Coalition would lose power. Are they victims of the mess left to them by the previous government? Did they overpromise then under-deliver? Has the Coalition delivered a government the public did not want?

To answer such questions, this column examines New Zealand First’s year in power, and two more columns will consider Act and then National.

The Boss

Winston Peters will be happy with his position at the end of this year. His party’s end-of-year poll average is 6%, down slightly from its election result of 6.09%. But when New Zealand First enters government, it usually suffers a sharp drop-in support. Traditionally Peters refuses to say who he’d go into government with. He often implies he’ll stay on the cross benches “rejecting the baubles of power” and a proportion of his voters are then angered when he forms a coalition with a party they don’t like.

But in 2023 Peters ruled out supporting a Labour government. Prior to the election Christopher Luxon pleaded with voters not to vote New Zealand First back into Parliament, making it plain that he’d prefer to govern with Act alone.

The voters did not comply, however Luxon has often seemed happy to have a politician of Peters’ experience taking up the role of foreign minister. The two party’s pro-American views on foreign policy are closely aligned, and the decision to shift New Zealand’s foreign policy closer to that of our “traditional allies”, Australia, the US and UK appear to be mutual. The primary mechanism for this appears to be Pillar II of the Aukus agreement, which will allow the sharing of advanced technology between participants. Labour has promised to withdraw from Aukus if re-elected. A recent poll indicated that 51% of voters support NZ joining Pillar II.

During his time as foreign minister Peters has been critical of Israeli actions during that nation’s military operations. He has announced new sanctions on Russia and addressed the UN security council, making a case for New Zealand to take another turn as a non-permanent member. He’s collaborated with the trade minister Todd McLay to advance a free trade deal with India.

In October he used the New Zealand First annual conference to suggest the idea of a public infrastructure fund owning New Zealand’s state assets and collaborating with international investors to bring foreign capital into New Zealand, which seemed to be a pivot away from many core New Zealand First values.

Peters has adopted a highly adversarial relationship with Te Pāti Māori, accusing them of promoting racial division and engaging in political stunts. In October he engaged in a shouting match with Te Pāti Māori co-leader Rawiri Waititi in Parliament’s debating chamber, in which both men insisted they could beat each other up.

New Zealand First is progressing with its coalition agreement to remove references to the principles of the Treaty of Waitangi from New Zealand legislation. This has attracted a fraction of the attention paid to David Seymour’s bill to hold a referendum on Treaty principles, but Seymour’s bill lacks the support to pass its next reading in Parliament, while National has agreed to support Peters’ changes. Peters has long opposed the doctrine that the treaty contains principles. When he formed a government with Labour in 2005 Helen Clark agreed to support his legislation removing Treaty principles to first reading - an almost identical arrangement to National’s deal with David Seymour. Labour did not support the bill at second reading.

Finally, Peters has recently been appointed Minister for Rail, overseeing the procurement of replacement ferries for the Interislander service which may-or-may not be rail-enabled (this debacle will be covered further in the National Party column). He’s spent the days since this announcement clashing publicly with Act leader David Seymour and finance minister Nicola Willis about the cost and scope of the new ships. He’s also criticised the Prime Minister in recent weeks, describing Christopher Luxon as struggling in the job, saying that National’s recent tax cuts masked how bad the economy was and dismissing the prime minister’s promotion of KPI’s and metrics as “dashboard crap”.

The Lieutenant

Shane Jones has taken a more prominent role this term, cementing his position as Peters’ probable heir. He is Minister for Oceans and Fisheries, Minister for Regional Development, Minister for Resources, Associate Minister of Finance and Associate Minister of Energy. He was the architect of the controversial Fast-Track process and the problems with that legislation were outlined in a recent Democracy Briefing:

“Jones has been a vocal promoter of the bill, especially its ability to override environmental concerns and laws protecting endangered species. In June Newsroom revealed that Jones had dinner with mining company executives in February, encouraged them to apply for fast-track consent and then failed to disclose the event in his ministerial diary. Ministers are expected to declare all meetings related to their portfolios. Jones claimed that the dinner was a last-minute affair, but it was subsequently shown to have been pre-organised by his staff. He also claimed that its omission from the diary was a mistake and amended the record.”

Jones has also been rewarded with a $1.2 billion-dollar regional infrastructure fund, often criticised as a slush fund. He intends to repeal the ban on exploration for new oil and gas reserves imposed by the previous government, and is an outspoken champion of the energy, mining and minerals sectors. During the winter energy crisis, he accused the major energy companies of profiteering.

A recent article by New Zealand Herald journalist Matt Nippert illustrated the obvious flaws in Jones’ approach to politics, finding that he’d arranged for successive governments to invest in a mussel farm, convincing Cabinet to invest $52 million from his Provincial Growth Fund into a business that has never returned a profit and has been in breach of its banking covenants for the last three years due to excessive debt. Nippert reports that Jones’ ministerial diaries show a number of meetings with the owner of the company. Jones is completely unapologetic about the unsuccessful investment.

The Liability

The third high profile New Zealand First minister in the current government is Associate Health Minister Casey Costello, a co-founder of rightwing anti-Treaty lobby group Hobson’s pledge, and previous board chair for the rightwing lobby group the Taxpayer’s Union. A recent survey of ministerial performance by The Post’s political journalists rated Costello at a miserable 0.5/10.

Other journalists have described her as one of the worst ministers they’ve ever seen. A recent Democracy Briefing summarised Costello’s first year in government: “Shortly after taking office Costello proposed a three-year freeze on CPI increases for tobacco products. The policy was not taken up, but a document Costello sent to health officials claiming that the ‘tobacco industry was on its knees’ and arguing that nicotine was as harmful as caffeine raised questions about her links to tobacco companies. Costello denies having any connection to the industry.”

In February the Government repealed Labour’s smokefree legislation, designed to gradually reduce the number of habitual tobacco smokers to zero. In July Costello reduced the excise tax on Heated Tobacco Products (ITPs) at a cost of up to $216 million, claiming that this might reduce smoking rates. Ministry of Health officials protested that no evidence existed to support the policy, and that it would overwhelmingly benefit Phillip Morris.

The recently released 2024 Health Annual Survey showed that smoking rates had failed to reduce over the last year: after ten years of consistent declines.” She has twice been criticised by the Ombudsman, who found that her refusal to release documents concerning the government's tobacco and vaping policies was "unreasonable and contrary to law.", and that her inability to source a document that she supplied to officials advocating for tobacco tax cuts indicated poor record-keeping. Costello will not be acting under her own recognisance.

Both Peters and Jones have long-standing links to big tobacco, but the constant headlines linking the government to a widely disliked and distrusted industry during a period of cuts to the healthcare system will have inflicted serious damage on its credibility with much of the public.

Contrarianism

New Zealand First has also taken up contentious positions on two divisive issues: transgender rights and the nation’s Covid response. In May of this year Peters announced a member's bill that would impose fines on people who did not use public bathrooms corresponding to their biological sex, and in August he announced a policy to restrict transgender women from participating in women’s sports categories.

This will make it almost impossible for New Zealand First to shift to the centre in upcoming elections. Labour and the Greens will concede almost anything to be in government, but their activists will never tolerate a coalition with an anti-trans rights party.

In June of this year Peters invoked the “agree to disagree” provision in the coalition agreement signalling New Zealand First's dissent over the continuation of the Covid-19 inquiry. He raised questions about the impartiality of the inquiry’s chair, Australian epidemiologist Professor Tony Blakely, citing Blakely's prior advisory role to the government during the pandemic. Peters has criticised the vaccine mandate policies imposed during the pandemic while personally endorsing vaccination. His coalition agreement with National won a second phase of the covid enquiry, looking into issues that had been explicitly exempted from the scope of the previous enquiry by the Ardern government.

New Zealand First has always been a difficult coalition partner. More than any other minor party in the MMP system it has prioritised its own self-promotion over the stability and integrity of the coalitions it belongs to, and it has continued that trend this year. All three of the MPs discussed in this briefing present challenges to the coherence and integrity of the government.

Based on Peters’ long track record of contrarianism and acrimony, this problem will only grow more acute for Christopher Luxon and his ministers. And it is compounded by Act leader David Seymour’s adoption of Peters style of politics, and the competition between the two leaders and their parties. Peters has served as Deputy Prime Minister for the first half of the coalition’s three-year term.

David Seymour takes over mid-way through next year. His party and its achievements will be the subject of the next briefing.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, Victoria University of Wellington

Note to Media: Any media outlet can freely re-publish this analysis.