Prime Minister-elect Christopher Luxon is trying to put the lid on the coalition talks.
He does not propose to give any updates on progress, and he has barred his MPs from speaking to the media.
That may be because there are already signs that it is going to be very difficult to get all three parties to agree on some key issues, particularly Treaty of Waitangi policy.
It could yet be a deal breaker that could see ACT stay outside the coalition with the potentital to veto any government bill.
He cites his business experience as the model he will use for the talks with ACT and NZ First.
“I’m wanting to do it a different way,” he told media yesterday.
“I’ve done a lot of negotiations.
“The way I deal with things, I want to build chemistry and relationships first and foremost. We work through our transaction issues.”
He has previously talked about his experience with mergers and acquisitions as a guide to how he will conduct the talks.
It is already clear that there will be a broad agreement between ACT, National and NZ First on many hot-button issues like law and order, but two, cutting spending and the Treaty are likely to be sticking points.
Both Act and NZ First are proposing massive government spending cuts.
And ACT is suggesting that if it cannot get the cuts it wants, it will not support National’s tax cuts.
ACT leader David Seymour made it clear yesterday that he would only agree to the cuts if they came with more substantial spending cuts than National is proposing.
“Cutting taxes won’t work if there’s no relief on inflation and interest rates,” he said.
“Something’s got to give.
“With ACT in charge of the economy, it would be the billions of wasteful spending that has been stoked over the past six years.”
ACT would end a wide range of government programmes, including the Provincial Growth Fund, the Callaghan Fund and film industry GST rebates.
It would sell Landcorp and halt contributions to NZ Super.
However, its big saving proposal would be the firing of 15,000 public servants.
ACT’s “Alternative Budget” would save $5.8 billion this year (before July 1, next year) and $5.4 billion the following year.
National is unlikely to agree to many of ACT’s specific proposals.
It is proposing only $1.5 billion in savings for 2024/25 and would raise the rest of the money for its tax cuts with new taxes such as the foreign buyer tax.
Finance spokesperson Nicola Willis consistently said through the campaign that they would agree to cut core Crown expenses by only 6.5 per cent.
But they are also unwilling to stop their tax cuts proposal.
“We have made a very big commitment to deliver tax relief for low and middle-income New Zealanders; that will happen,” Luxon told media yesterday.
New Zealand First is proposing the most savage cuts of any party even though it is also proposing a raft of new spending programmes.
NZ First’s manifesto says its fiscal policy is to create surpluses to deal with unfunded commitments and to pay down debt by setting total Government Expenses at no more than $165 billion while holding Core Government Expenses to no more than $133 billion for 2024/25.
The Pre-Election Economic and Fiscal Update forecast 2024/25 Core Crown expenses as $143.4 billion.
National’s cuts would reduce core crown expenses that year to around $140 billion — even ACT would go down to only $138 billion.
The three parties agree on the fundamental principles of their economic policies: that spending has to be restrained and that income taxes need to be reduced.
The main argument will be over how far to move and how quickly.
National and NZ First are on the same page on Treaty issues, but others are on opposite pages to ACT on what leader David Seymour has repeatedly said is a bottom-line condition.
They are much further apart on Treaty issues.
Neither National nor NZ First has published a Maori affairs or Treaty policy. However, NZ First wants English to be made the prime official language and for the country to withdraw from the UN Declaration on the Rights of Indigenous Peoples.
But ACT wants a radical review of the Treaty of Waitangi policy, which would see Parliament agree on a statement on what the Treaty meant that would then be put to a referendum.
That statement would deny all of the statute and case law made since 1987, which is based on the Treaty creating a partnership between the Crown and Maori.
NZ First is likely to oppose this entirely.
National has been a little more ambivalent.
Luxon has said he thought a referendum would be divisive but, on Monday, said, “We’ll get our way through those issues with the respective parties.”
ACT leader David Seymour, however, continues to insist that a referendum would be a bottom line for ACT.
And fundamental to that bottom line is to remove the concept of partnership from any interpretation of the Treaty.
“The question is, do we agree with the interpretation that’s been slapped on it in the last 30 years?” he told Moana Jackson on “Te Ao with Moana” on Monday night.
“I think a lot of people have got confused,” he said.
“They think that if you don’t agree with the way that the courts and certain interest groups have interpreted the Treaty since 1997, you don’t agree with the Treaty.
“Actually, we’re pro-Treaty. We just don’t like the divisive way it’s been interpreted lately.”
Seymour has put such an emphasis on his Treaty policy during the campaign that to back away from it in the coalition talks would be to raise fundamental questions about his integrity.
On the other hand, a failure to agree on Treaty policy could give him the excuse he may want to offer only confidence and supply and then hold an effective veto over all government legislation.
Luxon may discover that a coalition negotiation is very different to a business merger or acquisition negotiation.
