National, Greens, ACT criticise Government after it announces policy bonfire

Politicians and industry experts are calling on the Government to "do better" and say New Zealanders "need real change" after it announced a slew of policies will be dumped or shelved.

Earlier on Monday, Prime Minister Chris Hipkins said the reprioritisation comes as the Government continues its refocus on the cost of living and recovery from Cyclone Gabrielle.

This policy wildfire, along with previous reprioritisations, is estimated to save the Government about $1 billion. This will be reallocated to help Kiwis with the cost of living. 

The Government on Monday announced significant increases to Superannuation, main benefits and student supports as part of a "bread and butter support" package that comes into effect on April 1. It's expected to cost an additional $311 million, but the Government said it means about 1.4 million New Zealanders will "not go backwards" as most of the changes are aligned with increases in inflation.

Additionally, Waka Kotahi will now place its attention on the significant recovery and rebuild efforts required after Cyclone Gabrielle. That includes the roughly 400km of state highway damaged by the weather event.

The speed limit reduction programme has also been narrowed to focus on the most dangerous 1 percent of state highways.

Also on the scrap heap is the Government's $568 million Clean Car Upgrade - the so-called 'cash for clunkers' scheme - which was to be funded through the Climate Emergency Response Fund.

And elsewhere, legislation to lower the voting age to 16 for general elections won't be introduced. Instead, the Government is going to shift its focus to lowering the age for voting in local body elections, which has stronger support in Parliament.

The Government's plan to tackle alcohol marketing, pricing and sponsorship issues will also be delayed until April 2024.

"I want New Zealanders to know the Government is doing its bit and is cutting its cloth to suit the times we are in," Hipkins said.

"Some of these things we're delaying or stopping mean a lot to us. But we're taking the hard decisions because we know Kiwis are also making some tough calls.     

"It will give Ministers and wider government more bandwidth to deal with cost of living issues and the cyclone recovery."

Hipkins said the announcements on Monday may not be the last of the Government's reprioritisation programme.

"My expectation is that Ministers will continue to prioritise their own work programmes, including by re-scoping plans and amending policy where necessary."

Chris Hipkins.
Chris Hipkins. Photo credit: Getty Images

But the reprioritisation hasn't gone down well with some MPs. The Green Party said Cabinet "needs to do better" and today's announcements have shown why Green ministers are needed.

"The Green Party has long called on the Government to increase benefits to help low-income families get by. While Cabinet has taken a step forward today, we need permanent action to boost people's incomes, not just a one-off increase," Green Party co-leader Marama Davidson said.

Cabinet increased main benefits by 7.22 percent, which is also the inflation rate in the December quarter. In comparison, the net average wage rose by 6.24 percent.

For a family on a Jobseeker Support benefit with children, they will see a $40.96 a week increase. A sole parent's Jobseeker Support benefit will jump $31.83.

Superannuation will also rise by the same percentage. This means a couple both aged over 65 will get $102.84 more every fortnight. A single pensioner living alone receives an extra $66.86.

There are also changes to Working for Families, including an extra $4 for Best Start Payments taking it to $69 per week, and an increase of $9 for the eldest child rate of Family Tax Credit, lifting it to $136 per week.

"These are political choices, and Labour has shown that we can choose to make changes that help," Davidson said. "So, rather than continuing to play catch up, we also must increase benefits to make them liveable."

Green Party co-leader James Shaw took aim at the Government's climate-related announcements. He said that had he been at Cabinet on Monday, he would've argued against cutting back on climate actions that would help low-income households.

"The Clean Car Upgrade would have provided households with more low-emissions choices about how to get around," he said. "This doesn't sit well on top of the previous extension to the fossil fuel subsidies, which we know benefits the highest earners most."

The idea behind the Clean Car Upgrade was to provide support to low and middle-income households to scrap their dirty, high-emitting vehicles for environmentally-friendly vehicles. This would lead to lower transport costs for families and protect them from future high fuel prices, the Government said at the time. 

The Clean Car Upgrade was announced in May last year alongside the Emissions Reduction Plan (ERP), the Government's plan for how it intends to cut New Zealand's emissions as it works towards the net zero carbon emissions by 2050 goal.

The Government's also stopping the social leasing car scheme, which would lease clean cars to low-income families. It was "proving difficult to implement", the Government said.

ACT leader David Seymour was supportive of the Clean Car Upgrade getting the axe, saying this "always belonged on the scrapheap". 

"When ACT revealed last year that the scheme could end up costing up to $1.1 million per tonne of CO2 reduced, [Transport Minister Michael] Wood did a 180 to say the scheme was actually about 'equity'," Seymour said. 

"I guess they've now realised there's nothing equitable about spending half a billion of taxpayer dollars subsidising the global automobile industry during a cost of living crisis."

David Seymour.
David Seymour. Photo credit: Newshub.

But the Motor Trade Association (MTA) was disappointed the Clean Car Upgrade has been shelved. They said they've long called for a scrappage scheme and applauded the Government when the policy was announced last year.

MTA advocacy and stakeholder manager Brian Anderton said the Clean Car Upgrade would have helped lower and middle-income households transition to low-emitting EVs, PHEVs and hybrid vehicles in exchange for scrapping their old vehicle.

"There was a long way to go in finalising the scheme, some of which would have been hopefully worked out during the pilot," Anderton said.

"We know many Kiwis are feeling the pinch and support efforts to address the cost of living crisis. But we urge the Government to keep this as a priority in their future policy planning for the Emission Reduction Plan."

Shaw also said there are plenty of New Zealanders whose lives have been affected by the recent floods and cyclone who would argue that climate action is a bread-and-butter issue for them.

"Our climate targets remain the same. Every time we kick climate action into the future, we make it harder for ourselves to meet those targets," Shaw said.

"It is more important than ever that there are more Green Ministers around the Cabinet table so we can shape the direction of the next Government."

Another environmental policy that was deferred is the Government's container return scheme. This is where a refundable deposit - about 20 cents - is included in the price of purchasing plastic, glass, metal and paper drinking containers. Consumers could then return their empty containers and get that deposit back. 

Shaw was unhappy this scheme isn't going ahead as expected.

"The Green Party has always been clear that to build a healthy, thriving and low carbon economy we need to cut waste, reduce what we take from nature, and recover and re-use those materials."

James Shaw and Marama Davidson.
James Shaw and Marama Davidson. Photo credit: Newshub.

Meanwhile, speaking more generally on Monday's announcement, Seymour said Hipkins "deserves no credit for fixing messes Labour made".

"For another day, he's like a kid who messes up his room and wants a reward for tidying it. This time it's the madcap scheme to lower speed limits, something ACT opposed from the get go," Seymour said.

"Ironically, lowering speed limits was the one project where the Government actually delivered above its targets. It exceeded its target of lower speed limits on 10,000 kilometres of road, actually slowing people down on 11,000km."

Seymour offered additional suggestions for a "real policy bonfire" that he'd like to see. For him, this would include a torch to Fair Pay Agreements, the so-called ute tax, Three Waters, the 39 percent tax rate, the Māori Health Authority, the Zero Carbon Act, the mortgage interest deductibility and Residential Tenancies Act changes, the bright-line test, the ban on oil and gas exploration, the ban on live animal exports, and "many other" policies.

He said ACT has policies that provide "solutions to real problems", including addressing the cost of living crisis and providing tax relief to New Zealanders.

Christopher Luxon.
Christopher Luxon. Photo credit: Getty Images

The National Party also touted its plan to cut taxes if elected, with leader Christopher Luxon saying Kiwis deserve to keep more of their money, especially during a cost of living crisis.

"Food prices are at record levels, inflation is over 7 percent, wages are rising more slowly than inflation, and Labour's only answer is a rounding error of cuts to programmes that were wasteful, inflationary and shouldn't have happened in the first place," Luxon said.

"After six long years of Labour's tax and spend-a-thon, Kiwis deserve to keep more of their own hard-earned money. They also deserve a Government that can manage the wider economy to make sure every Kiwi can get ahead, not just have millions of dollars poured down the drain."

Luxon said the Government should follow National's plan and inflation-adjust tax thresholds, focus the Reserve Bank on a single inflation-busting mandate, reduce costs and regulations being faced by businesses, fix worker shortages, and bring "discipline" to Government spending.

"Let's be clear - Labour recklessly spending an extra $50 billion since 2017 has got New Zealand and Kiwis into the position we're now in," Luxon said.

"Today's moves are no more than a rounding error - pocket change in Labour's grand scheme to spend, spend, spend with nothing to show for it except Kiwis struggling to feed their families with food prices spiralling."