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First hundred days – what will new National Government do?

Nov 12th, 2008 | By | Category: Featured Article, News

AS PRIME Minister-designate John Key moves to finalise his first Cabinet by the end of the week, PAUL McBETH takes a look at what the new government faces:

Amid a global economic crisis, the incoming National-led Government is facing fiscal deficits of up to $1 billion a year deeper than forecast in the pre-election fiscal and economic update, and may have to modify some of its spending priorities.

 PHOTO: John Key (Getty Images)
Bill English as Finance Minister will preside over the new tax thresholds that will come into effect from April 1 next year (see table), along with a $10 a week tax rebate for people who are not receiving a benefit, Working for Families payments, or superannuation.
 
National will also introduce measures to offer financial support for people made redundant in the face of
the global recession.
 
In law and order, it will introduce legislation imposing tougher bail conditions and stricter conditions
on parole eligibility. National wants to remove parole for the worst repeat violent offenders, including those convicted of manslaughter.
 
Act will be pushing for its “three strikes” sentencing policy, but with NewsWire predicting Chris
Finlayson will be the next Minister of Justice, it is not expected to win this policy concession.
The new Government will look to introduce national standards for literacy and numeracy in schools immediately, along with a $500 million capital investment in schools, and will increase fines for parents of truants.
Nick Smith will preside over changes to the Resource Management Act with an eye to speeding up the resource consent process, and with NewsWire tipping him to pick up the energy portfolio, this will help him focus on fast-tracking new power plants.
 
Mr Smith will also oversee amendments to the Emissions Trading Scheme, which will be modified within nine
months.
 
Mr Key will hold a meeting of public service chief executives to rein in spending, and this is picked to
be the biggest policy concession for the Act Party, which will see expenditure reduced beyond the levels promised by the National Party.
 
Big losers in public spending are likely to come at the Tertiary Education Commission, which is described
as having “grown into a large and demanding agency that places an excessive compliance burden on education providers and stifles innovation”, and the Ministry of Health, where likely Health Minister Tony Ryall will order officials to cap expenditure.
 
Other losses come in KiwiSaver, which will reduce the employer minimum contribution from 4% to 2%,
reducing the costs by $800 million a year.
 
Employers lose their tax credit, but will only be required to match the 2% contribution, and a repeal of
the Employment Relations Act amendment will allow arrangements for KiwiSaver contributions to be discussed as part salary negotiations.
 
The other major cut in spending will come from the dissolution of the Fast Forward Fund for research,
which will see $700 million invested into financial securities.
 
The incoming government will direct the Guardians of New Zealand Superannuation to invest at least 40% of
the Cullen Fund into New Zealand as it oversees the expenditure of $8.6 billion on ultrafast broadband, roading, a new prison, and a school building programme over the next six years.
Incoming MP Steven Joyce is tipped by the New Zealand Herald and Dominion Post to oversee infrastructure , but NewsWire believes Mr English will add this role to his finance portfolio.
 
The Prime Minister-designate has indicated that he wants to include the Maori Party in his government, and
NewsWire sticks by its prediction that Maori affairs will be offered to Pita Sharples, and associate positions in social development and health to Tariana Turia.
Peter Dunne has already ruled out the Speaker’s role, which other pundits are tipping to go to Richard Worth, and Mr Dunne will probably continue as Revenue Minister.
 
Meantime, Phil Goff has been elected the new leader of the Labour Party, with Annette King his deputy, and
David Cunliffe the finance spokesman. Michael Cullen will remain shadow leader of the House, while outgoing Prime Minister Helen Clark will take the role as foreign affairs spokesperson.
 
Labour will be scrutinising ACC closely, as the incoming Government reviews the present scheme and i
nvestigates the potential of opening it up to competition.
 
Another casualty of the previous regime will be the Electoral Finance Act, although National is likely to
retain the section dealing with donations transparency. Labour has admitted the legislation was a blunder and wants to collaborate on reforming it.
Mr Key hopes to attend the Apec summit in Peru next week, and could be accompanied by his incoming Minster of Trade Tim Groser and new Minister of Foreign Affairs Murray McCully.
 
Arguably the biggest boost for the National-led government will be Jane Clifton’s blistering pen as she
accompanies Mr McCully jetting around the world, so long as she excludes visiting dignitaries from her penetrating wit.
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is a graduate of Whitireia NewsWire. He's a reporter for BusinessWire (yes - he does like the wire theme), where he writes daily stories updating currency movements. And he still spends far too much time reading blogs.
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