Christopher Luxon speaks from the National caucus retreat in Hamilton. Video / NZ Herald
Prime Minister Christopher Luxon is expected to give New Zealanders a reality check about what’s needed to grow the economy during his State of the Nation speech today.
It’s understood the speech, which will be delivered at an Auckland Business Chamber event, will highlight some of the key areas or decisions that need to be addressed to fix some of New Zealand’s long-term challenges.
New Zealanders are also expected to learn of a component in the new economic growth plan National and Luxon have been pushing in the past few days.
While Luxon has said economic growth has always been a central focus for the Government, National has zeroed in on it this year, including with the appointment of Nicola Willis as a new Economic Growth Minister.
“I am thinking about this portfolio in terms of what are the actions the Government can take in the short term, the medium term, and the long term, to make this a wealthier economy,” Willis said at the National Party caucus retreat on Wednesday.
“In the short term, that’s things like working alongside industry to drive up tourism numbers ... It’s about things like international education and how we can get our settings right there.”
Prime Minister Christopher Luxon and Finance Minister Nicola Willis talk to media at the National Party retreat in Hamilton yesterday. Photo / Mike Scott
She said in the medium term, the reform agenda included improving skills, reducing regulation, driving overseas trade, and bringing in more foreign investment.
Labour was critical of her appointment, with its finance spokeswoman Barbara Edmonds describing it as ironic that Willis was the new Economic Growth Minister after the economy had shrunk last year.
“As Finance Minister she led disastrous frontline cuts that hurt families and our economy, and now she’s doubling down as Minister of Economic Growth. It’s like putting out a fire with a can of petrol.”
Subdued growth in the coming years was highlighted in December with the release of the Half-Year Economic and Fiscal Update. It showed real Gross Domestic Product (GDP) growth would be just 0.5% in the year to June 2025, rising to 3.3% in 2027, before slowly falling.
In the September quarter, GDP fell 1%, following a 1.1% drop in the June quarter. Those two quarters of negative growth put New Zealand into a technical recession.
Inflation data released on Wednesday showed it steady at 2.2%. However, the biggest contributor, rent, was up 4.2%.
Willis said having inflation within the target band of 1-3% would give the Reserve Bank the room to further reduce interest rates. She said the Government had contributed to inflation staying low by pulling back on profligate spending that she’s accused the previous Government of.
On Wednesday Luxon said issues with the economy were something he heard about from New Zealanders over the summer break.
“No doubt about it, still a very tough time for Kiwis,” Luxon said.
“That is why it is important we have a relentless focus on economic growth in the coming year. That is how New Zealanders get higher income, that is how they get ahead, that is how they set their kids, grandkids up for a great future in this country, and that is what we are focused on.”
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.
