The debate over the RBNZ’s mandate
The clearest monetary policy difference between the blocs is the central bank’s mandate. National would keep the RBNZ’s sole price-stability objective, while Labour would restore the dual mandate of price stability and maximum sustainable employment.
In a pre-election bulletin, Kelly Eckhold (pictured), Westpac chief economist, said a return to the dual mandate “could mean that the RBNZ is prepared to accommodate a slower return of inflation to target to reduce the impact on employment”.
Westpac says fiscal, labour, migration, and energy policy may have the larger near-term influence, however. Spending restraint under a right-leaning government would cool demand, while a larger spending programme on the left would heat it.
Housing and tax: where the blocs differ
Westpac sees two likely outcomes. The first is a returned National-led coalition, with ACT and New Zealand First holding more sway. National has ruled out new tax cuts next term and plans to widen First Home Loan access to 5% deposits, alongside planning reform aimed at freeing up land. ACT would push for deeper spending cuts, while New Zealand First pairs a more interventionist approach with selective tax relief, such as a 20% company tax rate for small and medium enterprises (SMEs).
The second is a Labour-Green government backed by the Opportunity Party. Labour proposes a 28% capital gains tax on gains accruing after 1 July 2027 from investment residential and commercial property, with exemptions, plus 6,000 additional state houses. The Greens’ platform includes a 2% annual cap on rent rises, though Labour has ruled out supporting the Greens’ tax policies.