Why the Government Is Prioritising a Rates Cap Over a Social Media Ban

Prime Minister Christopher Luxon has defended choosing to work on a rates cap bill before a social media ban for under-16s. He said the rates cap helps with the cost of living, and the government has a lot of legislation to get through with only a few weeks of Parliament left. (RNZ)

Leader of the House Louise Upston confirmed there is not enough time for the social media ban to get its first reading. A first reading is the first vote MPs take on a bill, where they decide whether to send it off for a closer look by a small group of MPs called a select committee. Only three sitting weeks remain before Parliament finishes up for the election. A first reading for the rates cap bill will happen before then. (RNZ)

The rates cap would limit how much councils can increase rates — the local property tax that funds council services — to 4 per cent a year. It would not start until 2029. Luxon said the cap is about helping people with the cost of living. Councils raised concerns earlier this week after a surprise decision to also cap user charges, not just rates. (Newsroom) (RNZ)

The social media ban would be part of a new law called the Online Safety Bill. It would stop under-16s from using social media platforms and make technology companies take more responsibility. The government has confirmed it will introduce the bill. (RNZ)

Labour leader Chris Hipkins said he was disappointed the ban would not move forward yet. He said Labour had offered the government enough votes to pass a first reading before the election. Labour confirmed it would support the ban through to the select committee stage and urged the government to hold the first reading before Parliament ends. (RNZ)

That offer was widely seen as giving Luxon a political lifeline, because his own coalition partners are divided on the issue. ACT leader David Seymour called the proposed ban "unserious," and NZ First leader Winston Peters also pushed back. (1News)

Education Minister Erica Stanford also has an immigration bill affected by the time squeeze. She said the decision on what to prioritise was up to Luxon and Upston. She confirmed her immigration bill would not get its reading completed in time. (RNZ)

Luxon's framing of the rates cap as a cost-of-living measure explains the political logic here. A 4 per cent cap on rates, even one that does not take effect until 2029, is easier to sell to voters as help with household costs than a social media ban that his own coalition partners are sceptical of. The irony is that Labour gave the government a clear path to advance the ban, and the government turned it down. Hipkins' offer meant the votes were there; the obstacle was time and political will.

The broader context is a Parliament running out of days with more bills than it has time for. Upston's three-week window leaves no room for the social media ban, the immigration bill, and other items waiting for a turn. The rates cap gets its vote; everything else waits. In my view, the government is betting that voters care more about rates restraint than online safety rules in an election year, and that delaying the ban will not cost much because the policy is contested within the coalition itself.

Stanford's willingness to leave the decision to Luxon and Upston is also worth noting. Ministers whose own bills are affected are not pushing back publicly, which suggests the decision was made at the top and agreed through Cabinet. Whether that unity holds as the election gets closer and ministers face pressure over their own delayed bills is a separate question.