New Zealand PM Unwinds Ardern Policies After Two Weeks in Job

(Bloomberg) -- New Zealand Prime Minister Chris Hipkins has stepped back from some of his predecessor Jacinda Ardern’s more unpopular policies as he refocuses on combating soaring prices and seizing the political middle ground ahead of October’s election.

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A proposed merger of state-run radio and television, an income insurance program and plans to introduce a biofuels mandate won’t now proceed, Hipkins told reporters Wednesday in Wellington. Water reforms that involved co-governance with the Indigenous Maori people will also be reviewed and fresh feedback sought from affected parties, he said.

Hipkins took over as leader just two weeks ago following Ardern’s shock resignation, and has said he would refocus his government on relieving the pressure that households are facing from the rising cost of living. But that’s meant sacrificing some unpopular projects that had eroded the government’s support ahead of this year’s election.

“The government is refocusing its priorities to put the cost of living front and center of our new direction,” Hipkins said Wednesday, adding they show “increased support for business, increased support for those on low incomes and a reprioritization of our work program to shift it to the bread-and-butter issues New Zealanders want us focused on.”

Last week, Hipkins extended a fuel tax cut until June 30. Today he said that a mandate requiring fuel wholesalers to offer biofuels to reduce emissions would have increased prices, “and given the pressure on households that’s not something I’m prepared to do.”

The government will also increase the minimum wage in line with the rate of inflation from April 1, Hipkins said. The rate rises about 7% to NZ$22.70 ($14) an hour.

“In tough times, it’s critical to support those who struggle the most to make ends meet,” he said. “These families need our support now more than ever and an inflation-adjusted lift in the minimum wage will means thousands of New Zealanders do not go backwards.”

Analysis shows that the increase has a negligible impact on inflation, and is unlikely to have a significant impact on unemployment, he said.

The income insurance scheme, which was designed to protect workers who are made redundant or are unable to work because of a disability or injury, “is off the table and will not proceed as proposed,” he said. The government will need to see a significant improvement in economic conditions before anything is advanced on that program, he said.

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