The coalition government during 2023-2025: Economic policies and labour market changes

Abstract

There has been a radical change in economic policies under the current New Zealand coalition government in 2023-2025.[1] This has coincided with changes in other policy areas as well as significant changes in employment relations and labour market trends. A critical analysis of economic policies highlights negative economic impacts, emphasising the economic downturn prompted by monetary policy and how a fiscal ‘straitjacket’ prevents fiscal policy addressing economic, social and labour market impacts. While it is briefly suggested that the coalition government’s economic policy thinking has bypassed how to tackle New Zealand’s embedded economic policy problems (for example, poor productivity growth, ensconced inequality, and social issues), the commentary’s focus is on employment relations and labour market implications. Employment relations have witnessed yet another phase of policy reversals and will result in further labour market pressures. Overall, it has taken the government longer than anticipated to get the economy ‘back on track’ and it is unclear how and whether the long-term negative labour market and social consequences will be compensated.