Prime Minister Christopher Luxon has promised that a second National-led government will not raise existing tax rates, a key pledge for voters ahead of the November 7 election. Speaking at a Law Association lunch in Auckland, Luxon addressed coalition trends, the Treaty Principles Bill, and the future of company director liability. The PM ruled out increasing most taxes, though he left the door open for changes to the fuel levy.
Coalition politics and the ‘noise’ of MMP
Luxon warned voters that forming a coalition government under New Zealand’s Mixed Member Proportional (MMP) system would inevitably bring distractions. He described the political environment as inherently noisy due to competing party interests. This comes as the PM faces criticism for the compromises made during his first term, including the inclusion of the Treaty Principles Bill in coalition agreements with ACT and NZ First.
Luxon reiterated his personal opposition to the Treaty Principles Bill. He argued, however, that such controversial measures are often necessary compromises in a mature MMP environment. The PM stated that New Zealanders cannot expect a “monolithic” political agenda that reflects only one party’s preferences. He suggested the electorate must adjust its mindset from a first‑past‑the‑post mentality to one suited for proportional representation.
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“Rightly or wrongly, this is the system that New Zealand has chosen several times now,” Luxon told the TLANZ function. “There are things that are important to minor parties. They [have] different supporters, different constituencies, different policies, different values, different beliefs – things that I don’t like or don’t support.”
The National leader emphasized the importance of finding common ground to ensure strong and stable government. He suggested that holding a coalition together requires significant emotional intelligence. Luxon pointed out that constant government churn and perpetual election mode are outcomes New Zealanders wish to avoid.
Tax policy and director liability
While Luxon has previously ruled out new tax mechanisms, he clarified on Friday that existing taxes will remain unchanged. He said the government is not planning to lift current rates, though he noted a decision on the fuel levy is pending. The fuel levy was held steady during the last election to support households during a cost‑of‑living crisis, but it is set to rise by 12 cents a litre in January.
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Luxon foreshadowed “safe harbour” legislation to protect company directors from personal liability claims.
Under the current coalition, National has reached across the aisle to pass legislation on modern slavery and social media age restrictions—measures not supported by its minor partners. Luxon indicated he would seek similar bipartisan cooperation in a second term on issues like education reforms, energy strategy, and public‑private infrastructure partnerships. He believes focusing on “basics that actually aren’t deeply political” can provide more certainty for New Zealand.
