“They’re put between a rock and a hard place to fight inflation at this time.
“The Government has put the foot on the accelerator spending $1b more every week,” Luxon said, citing the fact the Government every year is spending more than $50b more than the previous government.
Core Crown spending as a percentage of GDP was 27.8 per cent of GDP in 2017, the last year of the previous Government. It is currently 31.7 per cent, although it is forecast to decrease.
Luxon said the Government needed to help fight inflation by reducing regulation, and “removing the biggest bottleneck we have in this economy which is immigration”.
“We desperately need those settings to be relaxed.”
Likely coalition partner Act has proposed a radical plan of tax and spending cuts. The plan cuts spending by more than it cuts taxes, which would have the effect of sucking money out of the economy because the Government would tax more than it spent.
Luxon appears less keen on this idea, which would require large spending cuts. National has promised to increase health and education spending by at least the rate of inflation.
Asked if he would run a contractionary fiscal policy, Luxon pivoted to talking about his policy to inflation adjust tax thresholds, lifting them to take account of the inflation that took place between the end of 2017 and the end of 2021.
Luxon also spoke about the revelation that Labour had not been able to increase the number of acute mental health beds from 608, despite the billion-dollar investment in Budget 2019.
Newshub reported that New Zealand still had 608 beds for acute mental health five years after Labour took office. The number of beds peaked at 619 in 2021, but has since fallen to 608.
Luxon said the figures showed a lack of delivery, and that the Government needed to reinstate health targets.
Labour got rid of health targets after taking office. Data is still recorded, but outcomes are not targeted.
“It’s what we need across the whole of the public service. The reason we have a public service is to deliver better outcomes, which you have to measure by outcomes which you have to measure by targets so we can improve life for New Zealanders - that’s what it’s all about,” Luxon said.
“Under a Labour Government, every health metric has gone backwards… if you don’t put attention to those issues, if you don’t measure it, you won’t deliver better outcomes.”
Asked whether he’d sack his likely mental health minister Matt Doocey if he didn’t deliver extra beds, Luxon wouldn’t say.
“I’m a business guy - I’m a CEO - I’ll be running the country in a way that delivers outcomes,” he said.
“We’re going to have a dedicated Mental Health Minister who will be held to account… We’ll have very clear measurements and targets across the whole public service.
“I can tell you - I’m clear on performance. I’m a performance guy, that’s how I’ve turned organisations around. It’s what I’ve done most of my career. You do it through and with people with great support, but we hold people accountable for results and outcomes.”
