New Zealand Election Race Tightens, Stokes Investor Fears Over Policy Reversals

Investors and businesses are increasingly uneasy ahead of New Zealand's November 7 election, as opinion polls suggest Prime Minister Christopher Luxon's coalition could lose power after a single three-year term — a first since 1975 — raising fears of renewed policy upheaval in a nation long prized for political stability. Labour leader Chris Hipkins has signalled he would restore the Reserve Bank of New Zealand's dual mandate, which the current government scrapped in favour of a single inflation-focused objective. Westpac analysts said a restored dual mandate could slow inflation's return to target and delay Official Cash Rate increases. The RBNZ is expected to hike rates a third time to 3.0% next month. Smaller parties could hold about a third of support, magnifying their leverage. New Zealand First has proposed buying NAB-owned BNZ and breaking up supermarket operator Foodstuffs. Infrastructure New Zealand estimates project cancellations have cost NZ$11.8 billion ($6.7 billion) over 25 years.