This is important when it comes to getting through the right doors in the US.
Spend some time with business folk in New York and Washington DC — as I have this past week — and all the talk is of “unleashing” growth, removing excessive deregulation and investing in energy.
Sound familiar? It’s exactly what Luxon was talking about when he fronted the Auckland Business Chamber 10 days ago, complete with a bevy of Cabinet ministers.
A powerful DC business lobby was just one organisation looking to host the Prime Minister should he lead a delegation to Washington later in the year.
Those closer to the political process recounted the PM’s energy when doing the rounds of both Republican and Democratic leaders while in DC last year for Nato’s 75th anniversary.
A natural extrovert, Luxon is fuelled by his interactions with others. This is an asset.
But there is an obvious gap when it comes to comparing the US and New Zealand growth agendas.
Second, in the US it is clear Trump’s economic strategy with its focus on deregulation, reducing business costs and bringing in tax cuts is also aimed at ensuring rising inflation does not get a grip again.
Trump wants to cut corporate taxes to 15% down from 21%.
US business folk will say it is the right call when it comes to “unleashing” (that word again) the animal spirits necessary for rekindling risk appetites.
Those I have spoken with talk about how they feel “invigorated” by Trump’s momentum — at the same time as they admit to being confronted by some of his worst personal aspects.
It would be a simple matter for Cabinet to direct Finance Minister Nicola Willis to put herself solidly behind economic growth by cutting the 28% business tax in the May 22 Budget, bringing in accelerated depreciation for small businesses and properly funding the international investment agency to spur foreign investment.
This is the kind of ballsy move that would create an uplift.
Right now, Willis’ dual role as both the fiscal czar and growth champion is in conflict.
It will take Luxon to lead bold moves to further fuel international investment in New Zealand by bringing in the kind of tax incentives that fuelled growth in Ireland and Singapore.
That’s what offshore investors will be looking for when they read about how Luxon is keen to follow such models.
And it is the missing factor from his announcement over plans to launch Invest New Zealand modelled on an Irish agency.
Here’s another fundamental absurdity.
The Government’s attempt to squeeze more revenue from increased visa fees (particularly for China) is in direct conflict with the need to get more tourists across the border to grow the contribution of the tourism sector to GDP.
Willis’ desire to get more short-term revenue has triumphed over common sense.
There’s time to fix this.
When it comes to the US there will be teething issues.
The President failed his first test this week to unite Americans in the face of adversity.
On Monday evening EST, I flew American Airlines from LaGuardia airport in New York to Washington DC. There was congestion at Ronald Reagan airport so we spent 30 minutes waiting on the tarmac for that to clear before departing from New York. Irrespective we arrived on time.
The shock of the mid-air collision between a military helicopter and American Airlines’ passenger plane rocked DC.
Trump later declared America was in mourning and confirmed there were no survivors.
But his claims that the Government’s diversity, equity and inclusion (DEI) policies at the Federal Aviation Administration were to blame made for testy exchanges at his press conference.
New Zealand will have to look through such incidents to its own interests in the next four years.
When it comes to bilateral issues there is no sense that the Trump Administration will impose tariffs on New Zealand exporters in the short term.
New Zealand is a relatively benign trade partner for the US.
In 2024, the US became New Zealand’s second-largest export destination, surpassing Australia. Total exports to the US reached $9 billion, accounting for 12% of New Zealand’s total goods exports. This marks a significant increase from a decade ago when US-bound exports were valued at $4.7b (9.4% of total exports).
Importantly, bilateral trade is virtually in balance — there is no persistent trade deficit of the kind that leads Trump to accuse other nations of taking advantage of the US.
Last week, the President issued the “America First Trade Policy”, which mandates a sweeping review of current US trade and economic policies. It’s been noted this does not include the immediate imposition of new tariffs.
It talked about establishing a “robust and reinvigorated trade policy that promotes investment and productivity” while benefiting “American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses”.
The US would also look to see if there are countries with which it can negotiate agreements to gain export market access for “American workers, farmers, ranchers, service providers, and other businesses”.
This is a potential opportunity for New Zealand — we should look to leverage it.
