National has an ambiguous relationship to the Government's 2022 Budget allowance - the amount of money set aside for new spending, which Finance Minister Grant Robertson announced in December.
It has criticised the record level of that new day-to-day spending, $6b, but it has also said it should be used to fund National's $1.7b tax cut policy, while leaving some over for new spending.
Finance Spokeswoman Nicola Willis then penned an op-ed saying the Government should reconsider the spending because of its inflationary impact. A $6b operating allowance is large by recent standards. The previous National Government never delivered an operating allowance of more than $2b.
Any decision to call for serious amounts of reprioritisation or trimming new spending will likely set the stage for the political response to the budget. Significant reprioritisation would likely mean some "cuts", while significantly trimming back on new spending would lead to the allegation National would not fund the growing cost of public services.
Luxon made the remarks in a speech to the EMA, where he laid out his economic vision. May is Budget month, with Budget day itself just three weeks away on May 19. Many days of Budget month tend to be packed with speeches and announcements.
Luxon used the speech to pivot away from the Government's budget itself, and towards the economy at large.
He outlined "five levers of prosperity": education and skills, infrastructure, technology, the business environment, and connections with the world.
Luxon said the Government needed to make sure the regulatory environment was not hostile to business
"New regulations should be justified on outcomes – not politics and spin. Old regulations should be constantly re-tested – if they're no longer fit-for-purpose they should be amended or repealed.
"That's hard work – but it matters. No single regulation will kill a business – but the total cost of dozens of outdated rules and unresponsive systems can be substantial. And it drives up prices across the economy," Luxon said.
He said the Government needed to make sure it was open to investment from overseas to grow the economy.
"We need to attract genuine, growth enhancing investment to our shores that makes New Zealand firms stronger, and helps New Zealand workers work smarter and earn higher wages," he said.
"Opening up to the world supports competition, faster technology adoption, deeper capital markets and more access to international know-how. It's a good thing," Luxon said.
"There's a global market of almost 8 billion people out there, and we'd be foolish not to embrace it," he said.
