This is The New Zealand Initiative’s 2026 Prescription for Prosperity. Since 2017, the Initiative has prepared a briefing for the incoming government. This fourth edition is addressed to whichever government New Zealanders elect in November.
Our 2023 Prescription made 170 recommendations across 23 chapters. This one makes 235 across 26. That growth reflects not a fondness for lists but the accumulation of unfinished business. Many of the problems we identified three years ago remain unsolved. Some have worsened. A few new ones have arrived uninvited.
The Luxon-led coalition government deserves credit where it is due. It liberalised overseas investment, made crucial reforms to school education, re-established the social investment framework, repealed ‘fair pay’ agreements, passed the Regulatory Standards Act and began the long-overdue replacement of the Resource Management Act. These were genuine advances, and the relevant chapters acknowledge them.
But structural reform has proved harder than anticipated. New Zealand’s planning system still makes housing unaffordable and infrastructure projects slow and costly. Government spending has continued to grow, a return to surplus remains elusive, and debt has ballooned. Local government still lacks the fiscal tools and incentives to accommodate growth. The public service remains too large, too diffuse and too weakly accountable to elected ministers. Health funding models have not kept pace with the complexity of primary care.
And then there is the world beyond our borders. When we published the 2023 Prescription, the rules-based international order was already fraying. It has since torn further. The conflict in the Middle East and the closing of the Strait of Hormuz have delivered a fuel price shock that no amount of domestic policy can fully absorb. New Zealand’s defence posture, long neglected, now requires investment on a scale that will compete with every other spending priority. The chapters on trade, defence, geopolitics and energy reflect a harsher external environment than the one we wrote about in 2023.
Each chapter in this document draws on the Initiative’s published research: reports, submissions, working papers and policy commentaries built up over more than a decade. Where we have not published on a topic, we say so. Where we extend established principles to new problems, we make that clear. Prescription for Prosperity is not a wish list. It is a compilation of evidence-based policy recommendations, grounded in research, that we believe would materially improve New Zealand’s economic performance and institutional quality.
The document is organised thematically. The opening chapters cover the fiscal and monetary framework. These are followed by chapters on trade, defence and geopolitics, energy, transport, infrastructure funding and regulation, and artificial intelligence. Then comes constitutional and electoral issues, the public service and local government. The middle chapters address education, health, housing, immigration and social development followed by resource management, climate change, and freshwater. The final chapters cover regulation, overseas investment, workplace relations and safety, digital policy, the primary sector, emergency management and lifestyle regulation.
An important note on timing. The content in this document was finalised on 8 May 2026. Developments since that date have not been captured.
No single recommendation will transform New Zealand. But the cumulative effect of implementing even half of what is proposed here would be substantial. New Zealand’s problems are not mysterious. Housing is expensive because planning rules restrict supply. Infrastructure is underfunded because councils bear costs while central government captures revenue. Productivity growth has stalled because regulatory barriers discourage investment and innovation. These are policy failures, not acts of nature. They can be reversed by governments willing to do the work.
That is what this document asks of the next government. Not ambition in the abstract, but the sustained, unglamorous effort of getting incentives, institutions and legislation right. New Zealand has done it before. It can do it again.
