Retirement Life
6 December 2023
What to expect from the new government
The age of negotiations is over – we have a new Government, and it seems determined to hit the ground running after sitting for so long in meeting rooms hashing out coalition agreements. On that note, the resulting ruling triumvirate of National, Act and NZ First has meant much shuffling of policy positions and priorities.
So, what could that mean for you?
Policies for seniors slim on the ground, except for…
At this stage, there is little detail on policies that will affect seniors specifically. One exception, of course, is the age of eligibility for NZ Super, which will now remain at 65 as both National and Act yielded to NZ First’s campaign promise.
Retirement Commissioner Jane Wrightson said: “We are pleased to see the coalition Government agree to keeping the superannuation age at 65 but understand there are a variety of views. It would benefit everyone if debates were supported with a broad range of data so that government decisions are informed by the full range of evidence. Key will be talking about how to make good decisions, taking a long-term lens and seeking cross-party broad agreement to help principled policy development.
“We are looking forward to working with the new Government to support further thinking and improvements to policies that better support retirees of today and in the future.”
Helping hand to better health…or more state wealth?
Positively, the new Government is already making moves to extend free breast cancer screening to those aged up to 74 and has set five major targets for the embattled health system, including for wait times and cancer treatment.
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Meanwhile, pseudoephedrine will be allowed back into cold medications next winter in a win for Act leader David Seymour and those with chronic blocked noses. Reversing the ban on over-the-counter sales of the decongestant was one of Seymour’s campaign pledges, which he said was part of “long overdue” health reforms.
Perhaps more controversially, both Act and NZ First came away from coalition negotiations having secured commitments to repeal the historic smokefree legislation passed at the end of 2022, including the precedent-setting generational ban, since copied by a number of other countries. Though not touted by the Government as a rationale, changes to the smokefree legislation would effectively increase tax revenue from tobacco sales.
House moves
Property investors will be heartened by news that the promised restoration of interest deductibility on rental income will be accelerated, with a 60% deduction in 2023/24, 80% in 2024/25, and 100% in 2025/26. Landlords will also regain the ability to end a tenancy with 90 days’ notice, while Act’s proposal for a pet-related rental bond to make it easier for tenants to keep pets will also see the light of day.
Meanwhile, the bright-line test on property sales will be rolled back to two years from the current ten. However, don’t count on selling to cashed-up non-residents. National’s agreement with NZ First included scrapping plans to allow foreign buyers back into the housing market.
Stop signs for transport policy
When it comes to transport, the story is more about what the new Government isn’t doing, rather than what it is. Fuel tax hikes will be cancelled, as will Auckland’s fuel tax. If you’d hoped to take advantage of the Clean Car Discount scheme, you’ll need to be quick as it’s in line for the chop before the end of this year.
Work will begin to replace the rules around setting speed limits, with blanket speed limit reductions the first to go. Meanwhile, central Government will withdraw from both the Auckland Light Rail project and Let’s Get Wellington Moving.
Tough on law and order
The coalition plans to tackle rising crime and make our streets safer with a low-to-zero tolerance approach. Three Strikes will be restored, as well as tougher sentences for criminals who attack victims in the workplace, increased funding for prison capacity and new youth justice beds, and Labour’s prisoner reduction target will be scrapped.
National has agreed to NZ First’s pledge to fund 500 more police officers over two years and police will be given greater powers to search gang members for firearms and make gang membership an aggravating factor at sentencing. Legislation will also be introduced to ban gang patches, stop gang members gathering in public, and stop known gang offenders from communicating with one another.
On the other hand, the firearms registry will be reviewed and the Arms Act rewritten.
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Taxing times
National’s tax cuts will continue, but the parties do not promise any further tax cuts beyond 2024. The cuts will be funded through reprioritisation and other revenue gathering rather than a tax on foreign home buyers. Some savings will come from decoupling benefit increases from wages and reverting to inflation – while this does not include NZ Super at this stage, it could see someone on the disability benefit about $60 a week worse off by the end of the decade.
Written by:
Vanessa Glennie
Vanessa is Head of Communications at Lifetime Retirement Income. She’s an experienced investment writer, having spent more than a decade writing about financial markets in the global fund management industry.
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