National’s back of the envelope $715 million tax calculation

Written By: - Date published: 8:58 am, September 25th, 2023 - 39 comments
Categories: grant robertson, national, nicola willis, same old national, tax - Tags:

New Zealand politics has been waiting with baited breath for National to release its methodology about how its tax on foreign purchasers (excluding Australians and Singaporeans and possibly Chinese) of luxury homes homes worth more than $2 million could earn $715 million in the first year.

There has been a certain level of incredulity about the figures, incredulity that I have shared in.

And the incredulity extended to a former Treasury Official whose previous job was to analyse these sorts of proposals.

The estimate by Michael Reddell was that the tax would raise $210 million in the first year, not the $715 million promised.

Reddell noted that National had not released its modelling.  Since then there has been a sustained chorus from the media asking for the calculations so that they can see if the policy actually has legs.

As I said 11 days ago if National’s calculations are robust then National should release them.  Otherwise it can expect this issue to dog it for the rest of the campaign.

Even occasional Standard commenter Matthew Hooton thought that the policy was bollocks:

“National’s tax policy was much worse than expected. It reveals a party undeserving of being taken seriously.”

Yesterday on Q&A Nicola Willis had the chance to give the media sufficient detail so that the viability of the policy could be properly investigated.  But this happened:

The look on Jack Tame’s face matched the look of every person who watched the show.

A $715 million in the first year policy being described in a couple of sentences and a basic maths calculation.  This really feels like back of the envelope policy.

National is treating us all like idiots with this policy.  Its refusal to release its workings and analysis about how the policy would work shows a level of contempt I am not sure I have witnessed before.

The scary thing is that if National is elected it will make the changes.  If it actually works house prices and inflation will go up.  If it does not work then National will cut and slash through every budget it can get away with.  We should all be very, very afraid.

39 comments on “National’s back of the envelope $715 million tax calculation ”

  1. Mike the Lefty 1

    It all reminds me of the time in the 1970s when Rob Muldoon built a cult around himself as the economic wizard, partly because he had been an accountant and thus he saw himself as being superior to trendy lefty teachers (Rowling).

    It all came down with a crash following the failure of some of his Think Big projects. A couple of them were actually very progressive – particularly electrifying the railway main trunk line (the best thing National has ever done but I wish they had finished the job).

    We need less wizardry and more practical application, but National’s promises of pots of gold at the end of rainbows shows which way they are going.

  2. Ffloyd 2

    Why would we not trust a political party who is …ahem…’good with numbers and serious people’ …..Good with numbers! Little Johnny down the road is ‘good with numbers , and he is only 6 yr old. (Mythical) For crying out loud. Surely their financial geniuses should be a whole lot better than ‘good with numbers’ GGMS.

  3. dv 3

    From the stuff comentary on Aussie vs Wales rugby

    Some names have been changed

    Luxon (Kerevi ) is out of sorts. He finds the ball in his hands and doesn't know whether to throw a wide pass and charge into a carry. He does neither. He drops the ball without a Welsh hand laid on him.

  4. AB 4

    National are such great managers of an abstraction called "the economy" that they can easily do it on the back of the envelop – they are even allowed to do it without any envelope at all. Everyone knows this.

    What lies behind this is a myth that "the economy" is like a sort of machine. It has a single prescribed and correct way of operating. If you don't replace the oil and water or pay an attentive ear to any funny noises, it might cack out on you. National are seen as being like great mechanics, they'll keep it running properly on the smell of an oily rag and the blood of a strangled renter. It's a convenient myth because it removes the economy from any social context or purpose, i.e. it could be that most of us really need a different machine, or not a machine, but a tree.

  5. Ffloyd 5

    It’s a pity we couldn’t read Willis’s reckonings on that piece of A4 paper so she could prove that she is ‘good with numbers’.

  6. Barfly 6

    All IMO –

    National is lying (not mistaken) – they know they are lying – they are perfectly happy to lie – National has a long history of lying and as long as it is profitable they will continue to lie.

    The National and Act Parties are the 'Ferengi' of New Zealand

  7. tc 7

    Harsh Mickey, as a former Fonterra senior figure that's probably what passes there as robust analysis.

    Maybe she needs a milk carton to explain better.

  8. Roy Cartland 8

    Here's a question. Is there a level of arm-twisting by powerful foreign states?

    Anecdotal, but a friend in the 80s was at a LP do and got a moment with Lange. He said that Lange told him that a US envoy of some kind had told him that there was a limit to what they'd tolerate. Nuclear Free sure, for now; but any kind of socialist moves and they'd tank the economy overnight, withdraw support and protection, basically destroy us. (Bit harsh, but the US does have form.) And that must happen all the time, if at all.

    What do you insiders know about any of this?

  9. tsmithfield 9

    I think Labour's clamour over a supposed gap in National's tax plan being done as a major distraction so the media doesn't ask them how they will pay for all the promises they have been trollying out.

    • SPC 9.1

      Supposed gap …. .

      Anyone not a complete moron knows that National will meet its budget gap via adopting ACT policies – and in the mean time, denies it has any intent to adopt those policies.

      Thus if the public is capable of remembering any of this deception, the chance of Luxon having a higher popularity rating 3 years from now are zero point one. And Willis won't last 3 years as a Minister of Finance.

    • Drowsy M. Kram 9.2

      Is it only "clamour" though, if the Nats want to be in govt and can't show the working behind their flagship tax policy? If Willis isn't up to it (can't face the "technical numbers"), then how about that chap who used to run a govt-owned airline – he can count to 7.

      Tbh, it’s disappointing Willis can't show her working – it was a common enough instruction in my high school exams. I remember teachers saying that you could get some marks [votes] for showing your working, even if your answer was up the boohai.

      Could be that 'Willis working' wasn't a vote-winner in focus groups – for an impartial assessment, why not ask the ACT spokesperson for Education, Chris Baillie.

      Future Act MP held ‘climate hysteria skeptics’ meetings at high school
      [13 October 2020]
      David Seymour is quoted as saying Baillie would bring common sense to parliament.

    • Roy Cartland 9.3

      That would be true if it were just Labour doing the clamouring. But it isn't is it.

  10. SPC 10

    Meanwhile in publiclandia a lot of tenants are wondering how to afford the rent increases of the next three years without much prospect of wage increases (no NACT plan to increase MW much, if at all and the removal of the FPA industry awards).

    Some ideas, cater to couch surfing, share facilities with those parking a caravan or van in the street front, let someone sleep in a stretcher by the car in the garage, another in the car, backyard mountain tent (all of the above to stay a step ahead of the landlord).

    But ultimately the consequence of NACT's policies will be that the market will absorb the migrant workers because after resorting to these tactics for a few years, generation rent will give up and go to Oz.

    NACT’s policies do not add up for them because they were not designed to.

    • Belladonna 10.1

      Some ideas, cater to couch surfing, share facilities with those parking a caravan or van in the street front, let someone sleep in a stretcher by the car in the garage, another in the car, backyard mountain tent (all of the above to stay a step ahead of the landlord).

      All the things they've been doing over the last 3 years, when Labour presided over the highest rent increases ever.

      https://figure.nz/chart/azFwYTVvUcrcxT3m-Cn6TyuSQBZ8Kacee

      • Roy Cartland 10.1.1

        So you’ll be voting further left than TLP? Great, same. TPM and GP are good options.

      • SPC 10.1.2

        when Labour presided over the highest rent increases ever.

        FACT CHECK

        Rents under National went from $300 to $410. Showing they moved fastest in the last term – 2014 to 2017 $350 to $410.

        https://www.opespartners.co.nz/property-management/historical-rent-increases

        In Labour's first term about the same ($70 to $480, $10 more more over 3 years one month off a higher base is not really an increase.

        Sure its been at a higher rate this past term. $95 to $585.

        I'll bet a chocolate fish now the rent increase under National will be higher 2023-2026, while wage increase in that period will be lower than under Labour (2020-2023).

        So rents will reach there most unaffordable level in our history in the next term.And it will be because National will not stop the rent increases but will slow wage increases.

        The Greens proposed a rent freeze to manage the cost of living spiral (no support from NACT or Labour) and have now moved or their current policy of a 3% increase pa cap.

        • Belladonna 10.1.2.1

          Anyone renting is going to look at the increase from 2020 – when Labour had an unprecedented single party majority – and therefore total freedom to implement policies to control or limit rent rises.

          If they failed to do so in the last 3 years – why should we believe that they will do so now?

          As you, yourself, point out (reluctantly) in your FACT CHECK – this last term has been the highest rate (something you've carefully chosen your graph to not display).

          • SPC 10.1.2.1.1

            As you, yourself, point out (reluctantly) in your FACT CHECK – this last term has been the highest rate

            Reluctantly, you insinuate – I noted

            Sure its been at a higher rate this past term. $95 to $585.

            And bet a chocolate fish it will be higher in the next term under National (and under Labour unless they adopt Green policy I'll add now). Reluctant, you're the one not disputing my assessment.

            something you've carefully chosen your graph to not display

            Are you serious? It was in the graph you supplied and I mentioned what it showed.

            The graph simply showed a wider trend 1994 to July 2021. And that was that two things influenced rent levels, incomes and house prices (influenced by demand and supply).

            If the rents rise because of market imbalance – and incomes are constrained then rent unaffordability will go higher than now.

            • Belladonna 10.1.2.1.1.1

              So, if Labour were unable to fix rent-inflation between 2020-2023 (and indeed the rate increased), then why should anyone believe that they will do so between 2023-2026?

              • SPC

                They won't and neither will they under National, but under one incomes go up more and under they go up less. So under National unaffordability will be worse.

                However if Labour required Greens and TPM as coalition partners, there might be some policy to cap rent increases.

  11. Vaughn 11

    Has anyone read or heard anything articulating National’s plans for the c. $2 billion annual contribution to the so-called Cullen fund? As we all remember, they stripped that fund of billions in contributions when last in government. My fear is this could again be used to prop up their tax plans to mask any deficiencies. If it hasn’t already been done, they need their feet held to fire in a public forum to explain their intention’s clearly.

    • SPC 11.1

      National has intentions, ACT have policies.

      ACT would stop the payments into the Cullen Fund.

      Reprise.

      https://thebfd.co.nz/2023/09/18/the-cullen-fund-is-doing-well/

      • Vaughn 11.1.1

        Thanks, SPC. I did see that article, but it doesn’t help allay my concern about whether National intend to repeat history. I’m of the view they need to be held to account about an aspect of the country’s future that is important.

      • Belladonna 11.1.2

        Do you have any evidence for this claim?

        While both National and ACT have proposals to gradually raise the age of entitlement to 67 – I've not seen any policy from either to suspend payments to the NZ Super Fund.

        Nicola Willis made a commitment to continue payments – in April this year. I wouldn’t regard it as a guarantee – but a strong indicator of where their thinking is right now.

        https://www.nzherald.co.nz/business/national-rules-out-stopping-super-fund-contributions/WMY36YJHKNEIPG26M7KSR4G6KY/

        • SPC 11.1.2.1

          Act wants to cut back on the winter energy payment (end the payment) KiwiSaver (end $500 tax credits for those paying in) and the NZ Super Fund (end contributions into it) as part of its alternative budget.

          Also end best start payments and first year free fees

          https://d3n8a8pro7vhmx.cloudfront.net/actnz/pages/2652/attachments/original/1620723316/15813_A_Budget_for_Middle_NZ_Document_%282%29.pdf?1620723316

          and also

          Pause minimum wage increases for three years

          (this would be around $40 a week less in the first year and $120 week less by the end of 3 years).

          • Belladonna 11.1.2.1.1

            Thanks for the link.

            However, the rest of your posts this evening make it clear that you think this is immaterial – Winston Peters will ride in on his white charger, saving the country from the horrors of an ACT/National coalition.

            • SPC 11.1.2.1.1.1

              I'd frame that otherwise.

              1. David Seymour has saved us from a National 35% ACT 15% coalition where he got to offer confidence and withhold supply unless he got ACT policy – when in a moment of hubris and over-confidence he declared his intentions.

              2. This took National to 40% and ACT to 10% and still falling.

              3. And scared some centrists from National to NZF raising them from 4 to 5%.

              4. Now Luxon can use Peters against Seymour, like Putin uses FSB supplied tea bags by window seats on planes.

              5. It's Luxon using Peters as his white charger, while pretending to want a NACT coalition.

              6. Even Key says it's not the game he played, but the game is constantly evolving and has to be played differently.

              7. NACT would be like the 1990-1993 government under MMP – one term.

              8. Key plays the long game – boil the frog. Seymour is an impatient opportunist grifter to be managed.

              9. National wants to play off ACT and NZF, so it can govern for the 10%. ACT and NZF illiberalism does not prepare us for the post boomer event 2040.

              10 That coalition does not deal with the issues before us – that Labour Greens and TPM are facing up to.

              The coalition of chaos

              ACT have never been in a coalition government.

              NZF have never lasted three years in a partnership with National.

              National's only past coalition government, one with NZF failed.

              National government 2008-2017 ruled as a minority government with support agreements with United, ACT and MP – it played them off against each other to have the major say.

              This ACT party has talked about denying supply if it does not get what it wants and NZF has prided itself on keeping parties on the right ACT, or left Green, out of government.

  12. Patricia Bremner 12

    Sadly I do think what you say is accurate SPC.

    What worries me is the hardship coming for those hit by this "Money is key" attitude of these jockeying fools full of hubris.

    Their distain for "the backroom boffinsangry", their strip mining- sell the silver mentality will beggar any resilience.

    When they hit the first calamity, the cupboard will be bare, as they will have rewarded the billionaires club, and devil take the hindmost… and bottom feeders.

    It will be a tragic farce, and there will be sorrow and regret. imo.

  13. jpwood 13

    Could we consider the fundamental lack of vision. We have an economy that over concentrates on selling houses to each other. That is failing as a viable means of generating wealth, so the solution is to sell houses to other people?

  14. Christopher Randal 14

    The Herald has published another "what if we have a huge earthquake" piece today.

    I have no doubt that if one happens and causes 10s of millions in damage and severing communication and travel thoughout the motu National/ACT will not be able to cope.

  15. Clive Macann 15

    Winston will put the kybosh on any of that policy.
    It goes against his grain in a big way.

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    Mountain TuiBy Mountain Tui
    4 days ago
  • Member’s Day

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    No Right TurnBy Idiot/Savant
    4 days ago
  • Northern Expressway Boondoggle

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    4 days ago
  • Never Enough

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  • Question Two of The Kākā Project of 2026 for 2050 (TKP 26/50)

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    4 days ago
  • Why is God Obsessed with Spanking?

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  • Inside the public service

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  • New Models Show Stronger Atlantic Hurricanes, and More of Them

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    5 days ago
  • Where ever do they find these people?

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    5 days ago
  • Motorway madness

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    No Right TurnBy Idiot/Savant
    5 days ago
  • Our transport planning system is fundamentally broken

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  • Thou Shalt Not Steal

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  • How mismanagement, not wind and solar energy, causes blackouts

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    5 days ago
  • The ‘Infra Boys’ Highway to Budget Hell

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    5 days ago
  • Media Link: “AVFA” on the politics of desperation.

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  • The cost of flying blind

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    No Right TurnBy Idiot/Savant
    6 days ago
  • Seymour vs The Clergy

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    6 days ago
  • Unstoppable Minister McKee

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  • Could outdoor dining revitalise Queen Street?

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  • Hipkins challenges long-held Labour view Government must stay below 30% of GDP

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    The KakaBy Bernard Hickey
    6 days ago
  • Your invite to Webworm Chat (a bit like Reddit)

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    6 days ago
  • Seymour’s Treaty bill making Nats nervous

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    6 days ago
  • 2024 SkS Weekly Climate Change & Global Warming News Roundup #36

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    7 days ago
  • Time for a Change

    You act as thoughYou are a blind manWho's crying, crying 'boutAll the virgins that are dyingIn your habitual dreams, you knowSeems you need more sleepBut like a parrot in a flaming treeI know it's pretty hard to seeI'm beginning to wonderIf it's time for a changeSong: Phil JuddThe next line ...
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  • Security Politics in Peripheral Democracies: Excerpt Six.

    The “double shocks” in post Cold War international affairs. The end of the Cold War fundamentally altered the global geostrategic context. In particular, the end of the nuclear “balance of terror” between the USA and USSR, coupled with the relaxation … Continue reading ...
    KiwipoliticoBy Pablo
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  • Buried deep

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    1 week ago
  • Security Politics in Peripheral Democracies, Excerpt Five.

    Military politics as a distinct “partial regime.” Notwithstanding their peripheral status, national defense offers the raison d’être of the combat function, which their relative vulnerability makes apparent, so military forces in small peripheral democracies must be very conscious of events … Continue reading ...
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    1 week ago
  • Leadership for Dummies

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  • Home again

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    More Than A FeildingBy David Slack
    1 week ago
  • Dead even tie for hottest August ever

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  • The Hoon around the week to Sept 7

    The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts and talking about the week’s news with:The Kākā’s climate correspondent on the latest climate science on rising temperatures and the debate about how to responde to climate disinformation; and special guest ...
    The KakaBy Bernard Hickey
    1 week ago
  • Have We an Infrastructure Deficit?

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  • Councils reject racism

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    No Right TurnBy Idiot/Savant
    1 week ago
  • Homage to Simeon Brown

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    1 week ago
  • Government of deceit

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    No Right TurnBy Idiot/Savant
    1 week ago
  • The professionals actually think and act like our Government has no fiscal crisis at all

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    The KakaBy Bernard Hickey
    1 week ago
  • Weekly Roundup 6-September-2024

    Welcome to another Friday and another roundup of stories that caught our eye this week. As always, this and every post is brought to you by the Greater Auckland crew. If you like our work and you’d like to see more of it, we invite you to join our regular ...
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    1 week ago

  • Draft critical minerals list released for consultation

    A draft list of minerals deemed essential to New Zealand’s economy and strengthening its mineral resilience has been released for consultation, Resources Minister Shane Jones says. The draft Critical Minerals List identifies 35 minerals essential to economic functions, are in demand internationally, and face high risk of supply disruption domestically ...
    BeehiveBy beehive.govt.nz
    31 mins ago
  • Government eliminates $190 million in trade barriers to boost the economy

    The Government has successfully removed trade barriers affecting nearly $190 million worth of exports to help grow the economy, Minister for Trade and Agriculture Todd McClay today announced.  “In the past year, we have resolved 14 Non Tariff Barriers (NTBs), returning significant value to kiwi exporters. These efforts directly boost our ...
    BeehiveBy beehive.govt.nz
    7 hours ago
  • Reo Māori the ‘beating heart’ of Aotearoa New Zealand

    From private business to the Paris Olympics, reo Māori is growing with the success of New Zealanders, says Minister for Māori Development Tama Potaka. “I’m joining New Zealanders across the country in celebrating this year’s Te Wiki o te Reo Māori – Māori Language Week, which has a big range ...
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    1 day ago
  • Need and value at forefront of public service delivery

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    2 days ago
  • Minister to attend Police Ministers Council Meeting

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    2 days ago
  • New Bill to crack down on youth vaping

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    BeehiveBy beehive.govt.nz
    3 days ago
  • Interest in agricultural and horticultural products regulatory review welcomed

    Regulation Minister David Seymour, Environment Minister Penny Simmonds, and Food Safety Minister Andrew Hoggard have welcomed interest in the agricultural and horticultural products regulatory review. The review by the Ministry for Regulation is looking at how to speed up the process to get farmers and growers access to the safe, ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Bill to allow online charity lotteries passes first reading

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    BeehiveBy beehive.govt.nz
    3 days ago
  • Tax exempt threshold changes to benefit startups

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    BeehiveBy beehive.govt.nz
    3 days ago
  • Getting the healthcare you need, when you need it

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    3 days ago
  • Targeted supports to accelerate reading

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    3 days ago
  • Survivors invited to Abuse in Care national apology

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    BeehiveBy beehive.govt.nz
    3 days ago
  • Rangatahi inspire at Ngā Manu Kōrero final

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    3 days ago
  • Driving structured literacy in schools

    The coalition Government is driving confidence in reading and writing in the first years of schooling. “From the first time children step into the classroom, we’re equipping them and teachers with the tools they need to be brilliant in literacy. “From 1 October, schools and kura with Years 0-3 will receive ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Labour’s misleading information is disappointing

    Labour’s misinformation about firearms law is dangerous and disappointing, Associate Justice Minister Nicole McKee says.   “Labour and Ginny Andersen have repeatedly said over the past few days that the previous Labour Government completely banned semi-automatic firearms in 2019 and that the Coalition Government is planning to ‘reintroduce’ them.   ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Govt takes action on mpox response, widens access to vaccine

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    4 days ago
  • Next steps agreed for Treaty Principles Bill

    Associate Justice Minister David Seymour says Cabinet has agreed to the next steps for the Treaty Principles Bill. “The Treaty Principles Bill provides an opportunity for Parliament, rather than the courts, to define the principles of the Treaty, including establishing that every person is equal before the law,” says Mr Seymour. “Parliament ...
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    4 days ago
  • Government unlocking potential of AI

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    4 days ago
  • Promoting faster payment times for government

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    4 days ago
  • Government releases Wairoa flood review findings

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    4 days ago
  • Acknowledgement to Kīngi Tuheitia speech

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    5 days ago
  • Interim fix to GST adjustment rules to support businesses

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    BeehiveBy beehive.govt.nz
    5 days ago
  • Strong uptake for cervical screening self-test

    More than 80 per cent of New Zealand women being tested have opted for a world-leading self-test for cervical screening since it became available a year ago. Minister of Health Dr Shane Reti and Associate Minister Casey Costello, in her responsibility for Women’s Health, say it’s fantastic to have such ...
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    5 days ago
  • Ministry for Regulation’s first Strategic Intentions document sets ambitious direction

    Regulation Minister David Seymour welcomes the Ministry for Regulation’s first Strategic Intentions document, which sets out how the Ministry will carry out its work and deliver on its purpose. “I have set up the Ministry for Regulation with three tasks. One, to cut existing red tape with sector reviews. Two, ...
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    5 days ago
  • Māori Education Advisory Group established

    The Education Minister has established a Māori Education Ministerial Advisory Group made up of experienced practitioners to help improve outcomes for Māori learners. “This group will provide independent advice on all matters related to Māori education in both English medium and Māori medium settings. It will focus on the most impactful ways we can lift ...
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    5 days ago
  • Government welcomes findings of NZ Superannuation Fund review

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    5 days ago
  • First of five new Hercules aircraft takes flight

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    5 days ago
  • Have your say on suicide prevention

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    5 days ago
  • Action to grow the rural health workforce

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    6 days ago
  • Pharmac delivering more for Kiwis following major funding boost

    Associate Health Minister with responsibility for Pharmac David Seymour has welcomed the increased availability of medicines for Kiwis resulting from the Government’s increased investment in Pharmac. “Pharmac operates independently, but it must work within the budget constraints set by the Government,” says Mr Seymour. “When our Government assumed office, New ...
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    6 days ago
  • Sport Minister congratulates NZ’s Paralympians

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  • Government progresses response to Abuse in Care recommendations

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    1 week ago
  • Passport wait times back on-track

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  • New appointments to the FMA board

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  • District Court judges appointed

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  • Government makes it faster and easier to invest in New Zealand

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  • New Zealand to join Operation Olympic Defender

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  • Government commits to ‘stamping out’ foot and mouth disease

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  • Improving access to finance for Kiwis

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  • Prime Minister pays tribute to Kiingi Tuheitia

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