The new Government's priorities have been set out at the State opening of Parliament - including tax reforms, housing, cutting immigration and addressing inequality that "degrades us all".

After an official welcome on Parliament's forecourt, including a military band and inspection of personnel, Governor-General Dame Patsy Reddy delivered the "speech from the throne".

It is written by the Prime Minister and sets out the new Government's priorities for the coming three-year term.

Reddy said the new Government marks an important moment in the evolution of MMP.

Advertisement

"This Government will act clearly as one Government in the best interests of all New Zealanders."

Reddy said the Government was committed to major investments in housing, health, education and infrastructure. The environment will be protected and people lifted from poverty, and surpluses maintained.

"Ours is a great country, but it could be even greater. No one should live in a car or in the street. That kind of inequality is degrading to us all.

"About 290,000 people live in poverty in New Zealand. Poverty hurts everyone. But it hurts children the most. Child poverty is a moral issue, but also an economic one."

Reddy, delivering the speech written by Jacinda Ardern, said the new Government would build a "truly prosperous" nation, and be a Government of aspiration.

New Zealand would become world leader on environmental issues and climate change, charging water bottlers and boosting DoC funding. Alternatives to 1080 will be trialled.

"We are all connected and the way we live has an impact on others," Reddy said. "This Government knows the economy can't be looked at separately from its impacts on the environment and society.

"Climate change is the greatest challenge facing the world.

"Sea level rise will affect our coastal cities along with other profound changes. The cost of doing nothing is too high."

A new KiwiBuild programme will build affordable homes rapidly, foreign speculators will be banned from buying existing homes, and the "bright line" test will be extended to property within five years.

The new Government would increase exports, lift wages and reduce inequality, while working with business.

"We need to move beyond narrow measures of value."

Productivity would not be increased by bringing in more people or making Kiwis work more hours, Reddy said, but through smart investments in education, research and development, and green technologies. Free tertiary study will be rolled out.

Reddy said primary health will be a focus, with GP visits made cheaper and free visits extended from under 13s to under 14s. Seniors will get an annual free health and eye check.

"Drug addiction will be treated as a health issue. Medicinal cannabis will be made available. There will be a special focus on mental health: New Zealand's high suicide rate, especially for adolescents, is shameful."

The Reserve Bank Act will be changed to include an objective of maximising employment.

The Government will pursue new trade opportunities including with Russia, and regional development will be boosted through a new fund and Forestry Service.

Tax reforms would be investigated, Reddy said, but any significant decisions will not take effect until the 2021 tax year.

Contributions to the Super Fund will resume immediately, to help ensure the retirement age stays at 65. A new upgraded SuperGold Card will be rolled out.

The minimum wage will go up to $20 an hour by 2020.

"We must aspire to be more than a low-wage economy."

Reddy delivered the speech in the legislative council chamber and in front of Prime Minister Jacinda Ardern and Opposition leader Bill English, as well as their MPs, and those from NZ First, the Green Party and Act leader David Seymour.

The Chief of Defence Force Tim Keating and members of the judiciary, including Chief Justice Dame Sian Elias, were also present for the address.

The MPs will later return to the debating chamber, and Bill English and others will reply to the address in a special address-in-reply debate.

This is a marathon 19-hour debate that can take several weeks, and in which new MPs give their maiden speeches - often outlining their back-stories and reasons for entering politics.