Prime Minister Jacinda Ardern has said her government will scale back its policy agenda and “focus on the economy” after months of poor elections and increased pressure on the cost of living in New Zealand.
After a successful election in 2020, Ardern’s Labor had a one-party majority in parliament this term, giving a lot of freedom to the government’s policy agenda. With a tough election year ahead, however, the prime minister has indicated that the government will re-prioritise and cut spending rather than fast-tracking all of its policy agendas.
“We’ve been really focused on making sure that in this particularly tumultuous economic time that we’re in, we’re cutting back and making sure that the economy is our priority,” Ardern said in an interview with national broadcaster RNZ on Monday morning.
“As a government, we’ve had a lot on the agenda … As we go into 2023, we need to make sure we’re fully focused, we’re prioritizing and we’re going to make sure we cut back where we need to.”
The government is facing difficult problems in the next elections. The rising cost of living, the country’s response to Covid and concerns about crime have all contributed to the decline in popularity of the ruling party and its leader.
Opinion polls in early December showed support for Labor had fallen to its lowest point since coming to power in 2017, and the party would be unable to form a government with available coalition partners. The prime minister’s personal support has also fallen to an all-time low, with her approval rating at 29% compared to opposition leader Christopher Luxon’s 23%.
The rising cost of living has been a key contributor to this decline: headline inflation is 7.2%, food prices are up 8.3% year-on-year, and interest rates have risen significantly following a series of Reserve Bank hikes.
While these economic challenges are not unique to New Zealand, they have contributed to a poorer public view of the current government and undermined the large mandate for reform secured by the last election.
The opposition has accused the government of fueling inflation at the cost of the Covid response – and in recent interviews, Ardern has said she will cut spending in response to changing economic conditions.
“Internationally, we are seeing that economies are sluggish and many are predicting a recession in various parts of the world,” she said last week. “So we’re going to focus on getting smaller.”
The government also has a number of contentious items on its agenda for next year, including controversial three-water reforms to change water management, a world-first effort to regulate agricultural emissions, changes to hate speech laws and the merger of the country’s two public broadcasters.
Ardern declined to comment on which specific policies might face the chopper. She said that during the summer months, cabinet members will be asked to reassess their legislative agenda, “and only [ask] to ourselves, whether from a spending point of view, an investment point of view, or just a focus point of view, those are the things that we should be prioritizing right now.”