Prime minister Jacinda Ardern has said her government will pare back its policy agenda to “focus on the economy”, after months of poor polling and increased pressure over living costs in New Zealand.
After a successful 2020 election, Ardern’s Labour party held a single-party majority in parliament this term, giving extensive freedom to the government’s policy agenda. With a tough election year ahead, however, the prime minister has indicated the government would reprioritise and cut spending, rather than push forward all of its policy plans.
“We’ve been really focused on making sure, during this particularly tumultuous economic time we’re in, that we are trimming back and making sure that the economy is our priority,” Ardern said in a Monday morning interview with national broadcaster RNZ.
“We have had as a government a lot on our agenda … Going into 2023 we do need to make sure we are totally focused, we prioritise, and that we will be making sure that where we need to pare back we will.”
The government faces difficult headwinds going into the next election. The increased cost of living, a backlash to the country’s Covid response and concerns about crime have all contributed to a decline in popularity for the governing party and its leader.
Polling in early December showed that support for Labour had dropped to its lowest point since it came into power in 2017, and the party would not be able to form a government with its available coalition partners. Personal support for the prime minister had also dropped to its lowest level ever, with her approval rating at 29% compared with opposition leader Christopher Luxon’s at 23%.
A key contributor to this decline has been the rising cost of living: overall inflation is at 7.2%, food prices are up 8.3% year on year, and interest rates have risen considerably after a series of reserve bank hikes.
While these economic challenges are not unique to New Zealand, they have contributed to a souring public view of the incumbent government, and eroded the hefty mandate for reform the last election provided.
The opposition has accused the government of fuelling inflation with the cost of the Covidresponse – and in recent interviews, Ardern said she would be cutting back on spending in response to the changing economic landscape.
“Internationally, we’re seeing economies slow and many forecasting recession in different parts of the world,” she said last week. “That’s why we will be focused on making sure that we trim back.”
The government also has a number of contentious items on its agenda for the next year, including the controversial ‘three waters’ reforms to change water governance, world-first efforts to regulate agricultural emissions, changes to hate speech laws and a merger of the country’s two public broadcasters.
Ardern would not comment on which specific policies may face the chopping block. She said over the summer months, cabinet members would be asked to re-evaluate their legislative agenda, “and just [ask] ourselves whether or not either from a spending perspective, investment perspective, or just from a focus perspective, those are things we should be prioritising at this point in time.”