New Zealand’s Chris Hipkins vows to focus on inflation ‘pandemic’ and ‘fairer’ tax system

New Zealand’s next prime minister, Chris Hipkins, has promised to cut back government reforms to focus on the “global pandemic of inflation”.

Speaking to media on Monday morning, the prime minister-to-be promised to “run the ruler” over the government’s work programme and cut inessential reforms to focus on the economy. In the final months of 2022, Jacinda Ardern made similar commitments, in a tacit admission that the government’s packed legislative agenda may have become a distraction from the rising cost of living – a core issue worrying voters.

“The public feel we’re doing too much, too fast,” he said, in a series of early-morning radio interviews. “We need to focus in on some of those bread-and-butter issues that New Zealanders are certainly focused on at the moment, including issues like the cost of living, the effects of the ongoing global inflation pandemic that we’re experiencing at the moment,” he told RNZ.

“We just have to make sure that we’re putting our resources into the things that are going to make the biggest difference and that are the most important.”

New Zealand’s inflation rate remains high, with food prices up 11.3% year-on-year in December – the biggest increase in more than three decades.

Hipkins has not yet said which policies will face the bonfire – those priorities are likely to be set on Wednesday, when the newly-sworn-in prime minister will meet with cabinet for the first time.

Among those possibly facing the guillotine, however, is the effort to merge New Zealand’s public-funded media entities into a single, BBC-style giant. There has also been speculation about the future of Three Waters: a large-scale reform of ageing water infrastructure that has morphed into a controversial proxy debate over co-governance with Māori of public assets and Indigenous sovereignty in New Zealand. Hipkins said on Monday that Three Waters would probably proceed, because scrapping it would result in thousands of dollars in increased rates.

The incoming leader also hinted at the possibility of changes to New Zealand’s tax system, saying “we should always look at how we can make the tax system fairer”.

“I think overall there are some New Zealanders who perhaps aren’t contributing their fair share,” he told hosts of The AM Show. Early in Ardern’s term, she had ruled out a capital gains tax, land tax on family homes, or wealth tax. Critics on the left said those decisions, along with strict fiscal responsibility measures, hamstrung the government when it came to achieving large-scale social reforms, like the mass building of state housing.

Hipkins said his government would keep to Labour’s tax commitments for this term – which is no new taxes outside the new 39% tax rate, but said the tax system needed some change.

“There are people now working really, really hard, some of them might be working multiple jobs … They are contributing enormously to New Zealand and to our prosperity but they are feeling that they’re not able to get ahead. We need a tax system that recognises this, that actually makes sure that those who are really striving, who are putting in the hard yards, actually feel the reward for that,” he said.

Hipkins was formally selected by Labour’s caucus this weekend, to replace Ardern after the prime minister’s shock resignation last week. He will be sworn in on Wednesday.