New Zealand has announced it will significantly increase its refugee quota from 2020.

Jacinda Ardern’s Labour party last year campaigned on raising New Zealand’s annual intake of refugees from 1,000 to 1,500 during its first three-year term in government.

But questions about whether the policy would happen have lingered in recent weeks amid speculation the NZ First party – Labour’s coalition partner which campaigned on a platform of dramatic immigration cuts – may not back the move.

On Wednesday, Ardern, with NZ First leader Winston Peters by her side, confirmed the number would rise to 1,500, but only from July 2020.

“This is the right thing to do. It fulfils New Zealand’s obligation to do our bit and provide a small number of people, displaced by war and disaster each year, a place to call home,” she said.

The time-frame was a “simple question of logistics” and about ensuring there was enough capacity and support available, Ardern said.

The government in recent months has cited a housing crisis in New Zealand as of particular concern.

“In the meantime, we will work to increase the number and spread of refugee resettlement and support services. We need to make sure we’re prepared for this change,” the prime minister said.

The decision comes as the number of displaced people around the world reaches its highest level on record, according to the UN Refugee Agency, and a refugee crisis provokes tension in European politics.

It also comes days before Ardern departs to speak at the United Nations in New York.

Activists have been critical of New Zealand’s refugee intake in recent years, with the number only raised to 1,000 in 2016 (the first increase since 1987). New Zealand’s 2017 intake sits at less than a quarter of Australia’s intake on a per-capita basis.

However, ministers and agencies pointed out New Zealand also takes in vulnerable and high-need refugees who may be excluded by other countries.

Murdoch Stephens, who founded the campaign calling for the increase and recently authored a book on the issue, welcomed Wednesday’s announcement but said more work needed to be done.

“Doubling the quota makes up for 30 years of no increase to the quota,” he said. “At 1,500 places we’ll still be accepting half as many people per capita as Australia. Today is a day of celebration, for sure, but we are far from being world leaders.”

New Zealand’s Green party, a support partner of the government, has called for the quota to be raised to 6,000 to put New Zealand closer in line with countries such as Australia and Canada.

“But 1,500 is a great start. It’s definitely a day to celebrate,” Green MP Golriz Ghahraman said.