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Wednesday, 6 May 2026

Tax windfall from Iran war to be pocketed in federal budget

Tax windfall from Iran war to be pocketed in federal budget

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Latest30 Apr 2026, 1:00 pm
1News

Former Prime Minister Helen Clark has questioned whether the current coalition government will survive beyond the upcoming Budget, following a significant diplomatic spat between Prime Minister Christopher Luxon and Deputy Prime Minister Winston Peters over New Zealand's stance on US-Israeli military action against Iran. The controversy erupted after Peters released internal government emails to the NZ Herald that revealed tensions over foreign policy positioning, with Luxon reportedly seeking "explicit public support" for US actions while Peters preferred a more cautious diplomatic approach.

The emails, written in late February as the US-Israel conflict with Iran began, exposed deep divisions within the coalition over foreign policy direction. Peters' office claimed the Prime Minister wanted to shift New Zealand's traditional balanced stance, while Foreign Minister Peters advocated for walking "the careful line" of neither condemning nor explicitly supporting US military action. Following emergency talks between the two leaders, Luxon stated that Peters had "acknowledged he had made a mistake" in releasing the confidential communications to media without consultation.

Clark observed that the public clash demonstrated serious threats to coalition cohesion, noting that National and NZ First were "after each other's votes" and "eating each other." Her assessment highlights growing concerns about government stability as the coalition partners appear to be competing for the same voter base while managing fundamental disagreements over policy direction, particularly in the sensitive area of international relations and defense policy.

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