That Taxpayers’ Union-Curia poll showed the cost of living remained New Zealanders’ main concern and National hasn’t been subtle in its messaging that growth is its top priority this year, sending out emails and statements focused solely on that issue.
Speaking to media this morning from his party caucus retreat, Luxon said it was wonderful to have the National team and some of their families together ahead of today’s meeting.
He acknowledged it was still a “very tough time for Kiwis” but that indicated the importance of focusing on economic growth, citing the recent signing of a free trade agreement with the UAE and Finance Minister Nicola Willis' new portfolio of Economic Growth.
Willis, speaking with Luxon, said she had been delighted by the reception from the business community to her new portfolio, which was created by Luxon in his reshuffle over the weekend.
It replaced the Economic Development portfolio that was held by then-minister Melissa Lee.
Willis said the portfolio would include working alongside the tourism industry to increase the number of tourists coming to New Zealand. It would also apply to increasing trade and boosting science and innovation.
Luxon said he was “very proud” of the Government’s focus on growth last year, dismissing the suggestion the new portfolio was an acknowledgement the Government hadn’t prioritised economic growth in its first year.
“Yes we were,” Luxon said when asked if the portfolio was taken seriously when the former minister wasn’t in Cabinet.
He maintained he and Willis were very focused on growing the economy. Asked what Lee had been doing for the past year in the portfolio, Luxon referenced his reshuffle and how that portfolio had changed hands.
Willis said all ministers should be driving towards economic growth.
“No it’s not,” Luxon said when asked if the Economic Development portfolio was a waste of space last year.
He believed New Zealanders could see the work the Government had done to revive the economy, saying he had heard from people over summer that they wanted to see the Government go further.
Prime Minister Christopher Luxon. Photo / Mark Mitchell
Luxon said he had invited Rocket Lab founder Peter Beck to speak to his caucus to discuss how he had used scientific innovation to succeed.
Luxon also defended his decision to appoint Dr Shane Reti responsible for the science and innovation portfolio, even after he was dumped from the health portfolio.
“He’s going to be brilliant to understand the link between universities and science and innovation,” Luxon said of Reti, who was also the Universities Minister.
Luxon confirmed there would be no change to abortion laws with Simeon Brown as the new Health Minister. He said he would step in if Brown made any moves to limit access for women to abortion services.
There would be “continuous announcements” coming from the Economic Growth portfolio, Willis said.
On attracting foreign capital, Luxon said he had made a point of speaking with those heading sovereign wealth funds to encourage them to invest in New Zealand. It was now about establishing the areas of interests for both the funds and New Zealand.
Luxon said everywhere he went, there was a “huge appetite” to invest in New Zealand. He claimed investors hadn’t had a New Zealand Government that could show what investments could be made and the potential benefits.
“No one actually engaged with them,” Luxon said of overseas investors.
National to zero in on economic growth
At the reshuffle press conference on Sunday, Luxon said he wanted to ensure his team was “refreshed” to zero in on “economic growth”, including by handing Finance Minister Nicola Willis the new role of Minister for Economic Growth, a reskinned version of the Economic Development portfolio.
In keeping with that theme, National MPs were expected to hear from Rocket Lab chief executive Sir Peter Beck about his experiences driving innovation. Luxon’s Government was the first to have a Minister for Space and the Prime Minister was present at a deal between Rocket Lab and a Japanese company in Tokyo last year.
Science and technology are viewed by the Government as a critical way for driving that economic growth.
Luxon told Newstalk ZB this week the area gets “quite a bit of money” and “we come up with great innovations, but we are not actually commercialising them and building out the big companies and creating employment for people”.
The minister who will oversee science, innovation and technology is the one who experienced the biggest demotion in Sunday’s reshuffle – Dr Shane Reti. He lost the Health Minister role to Simeon Brown and also dropped several positions in the Cabinet rankings.
National MPs will be quizzed by media on their reaction to that reshuffle and whether there are any grievances relating to Luxon’s decisions. It’s also likely reporters will seek their thoughts on last week’s poll, the first Curia result since April 2023 to have National behind Labour.
Dr Shane Reti has been dumped as Health Minister. Photo / Sylvie Whinray
‘The CEO guy’
As always, 2025 is expected to deliver a mix of pressing policy priorities, events and personalities for the Prime Minister to juggle.
But it’s the economy that will likely dominate much of Luxon’s agenda. Forecast subdued growth, a slump in the dollar, concerns about the impact of potential Trump tariffs and an increase in bond yields globally will all be playing on his and his ministers’ minds.
Although there are other issues dominating the headlines – such as the Treaty Principles Bill – Dr Lara Greaves, a politics professor at Victoria University, said what’s happening to people’s wallets often rules.
“I think a lot of the evidence has shown that people are more fixated on things like the economy, are more fixated on the cost of living and poverty and inequality and those broader economic issues,” she said.
Greaves noted the former businessman had also begun the year trying to “own the trade deals and the positive things for the economy”, referencing his whirlwind trip to the United Arab of Emirates last week to witness the signing of a trade agreement.
“I suspect that what he’s going to keep doing is being that kind of economic management guy, the CEO guy.”
Finance Minister Nicola Willis is the new Economic Growth Minister. Photo / Mark Mitchell
While Act and New Zealand First are “taking up a lot of attention”, Greaves said voters may drift to “middle-of-the-road National”.
Luxon, however, remains in the “unusual” position of not seeing any marked improvement to his personal ratings with the public, Greaves said.
“We’ve not really seen that kind of likeability shoot up or the preferred Prime Minister [ratings] shoot up in the way that has happened with previous Prime Ministers in a sort of so-called honeymoon period.
“For a long time, it was like, ‘oh, we just don’t know Luxon, we’re trying to get to know Luxon’ and now he’s been leader for a couple of years and people still don’t kind of have a finger on exactly who he is.”
The politics professor will also be watching to see how the “relatively inexperienced” Luxon – he was only elected to Parliament in 2020 – manages the “three-headed coalition” as it changes Deputy Prime Minister and as parties ready for next year’s election.
“The question is always whether the tail is wagging the dog, which is a very cute metaphor, but in this case it’s like two tails, which is quite intense and hard,” Greaves said.
‘Build some bridges’
Over the course of last year, Luxon became more vocal about his dislike for the Treaty Principles Bill, the Act-backed legislation set to die at second reading when National pulls its support. By the end of the year, he was telling members of the public he would “spike it”.
But despite acknowledging that Māori-Crown relations had likely worsened under his watch, he won’t be attending annual events in Waitangi next month, opting instead to spend Waitangi Day with another – currently undisclosed – iwi.
Ella Henry, a Māori academic with a focus on business, said a large number of new voters at the next election are expected to be Māori.
“I do think that the National Party, and Luxon in particular, are going to have to think about what kind of relationship they want with this significant new chunk of voters,” Henry said.
After the turbulence of 2024, what should Luxon do to improve his relationship with Māori voters this year?
“Turning up. Māori respect people who walk their talk. Turning up and being present and going to those events where lots of Māori will be may mean that he causes umbrage, but it also shows kaha [strength] and it shows mana, and we respect that as a people.”
Prime Minister Christopher Luxon was at Waitangi in 2024 – but won't be this year. Photo / Michael Cunningham
Henry said he will need to “build some bridges”, which she said won’t be achieved by not going to Waitangi.
She acknowledged Luxon was “caught between a rock and hard place” when it came to the Treaty Principles Bill. National had to support it at first reading as part of its coalition agreement with Act.
“Where he does have some flexibility is in building stronger relationships with Māori and Māori community – and just talking to his own Māori MPs is not actually consulting with Māori.”
Henry said Luxon should also continue highlighting how the Government’s policies which don’t directly target Māori – think tax cuts or changes in the education space – will benefit Māori as well.
‘Defining feature of the year’
While it may seem Luxon’s plate is full with domestic considerations, there are also international moves to account for. As he’s been known to say, New Zealand is a small trading nation so what’s happening globally has a big impact on our economy.
And that means the global stage could be particularly important in 2025. The return of Trump (and his threat of tariffs), potential decisions with regards to Aukus and Luxon’s ambitious goal of getting a free trade agreement with India this term will see the Prime Minister racking up the airpoints.
Geoffrey Miller, a geopolitical analyst, said the new Trump administration will be “a defining feature of the year” and influence how New Zealand approaches foreign affairs.
So, could we see a Luxon-Trump handshake in the near future? The pair will certainly cross paths at global forums, but New Zealand will hardly be first in line for a sit-down.
“Face time is always helpful,” said Miller. “Getting that one-on-one meeting would be beneficial. I think there’ll be an awful lot of world leaders trying to get Trump’s ear, though, and I don’t think New Zealand will be high up on the priority list.”
One of the items at the top of the agenda would be tariffs, which could hurt our exports if Trump’s words become reality. The United States was New Zealand’s second-largest export destination in the year to September 2024, worth more than $15 billion to our economy.
Donald Trump is back in 2025.
Miller pointed out that some of the Government’s key personnel focused on the US are the same as when Trump was first in office, such as Foreign Affairs Minister Winston Peters and ambassador Rosemary Banks. Both have strong relationships with the Republican Party.
On the issue of Aukus, Miller doesn’t believe it will be another year of just “exploring” the idea of joining Pillar II. While it’s ultimately up to the participating countries to invite New Zealand to get involved, he anticipates Luxon will need to make signals or decisions in 2025.
It is here also where Luxon will be watching Trump, Miller suggested. For example, if Trump goes cold on Aukus, New Zealand may not be so inclined to get involved in Pillar II. If the tariffs do eventuate and hurt our exports, the Government’s alleged US bent may also soften.
On the other side of the Aukus coin is China, whose ambassador hasn’t been exactly quiet in expressing its opposition to New Zealand getting involved. With China being our largest trading partner – by far – those complaints won’t have gone unnoticed. Luxon’s also expected to travel to the Asian superpower this year.
“That might be quite a defining consideration ... Can he keep those good relations with China while joining Aukus pillar two? The ambassador’s comments suggest that that’s not going to be possible,” Miller said.
“Christopher Luxon, I think, might be swayed in terms of New Zealand’s positioning by his visit to China and the talks that he has there. So that could also have an impact on some of the decisions that he takes.”
Prime Minister Christopher Luxon (left) met with China's President Xi Jinping at the Apec Summit in Peru. Photo / Pool
Miller believes Luxon’s voice will get louder on foreign affairs issues this year.
“Christopher Luxon is going to have to balance all of these different considerations and he might have to just take more of the lead when it comes to foreign policy,” he said.
As mentioned, Luxon has already this year been overseas to welcome a fresh trade deal, and the goal of doubling New Zealand’s exports by 2030 remains a key focus.
That brings into play India. Luxon famously promised a free trade agreement (FTA) with India this term and has said he has no regrets about that, despite it being considered overly ambitious.
The Prime Minister will travel there this year, but Miller said Luxon’s KPI should really be the reopening of FTA negotiations, which have been dormant since 2015.
“I think it’s right and proper to continue to focus on India, to put in the effort, but I think it should be seen as a long-term proposition.”
The analyst said Luxon has certainly showed he’s willing to work for it.
“I think New Zealand needs to get in there and do the hard yards and certainly Christopher Luxon has shown that he’s willing to travel ... I think he does understand the importance of the face-to-face meetings and that’s to his credit.
“What Luxon’s big challenge will be this year is just balancing out all these competing factors and making decisions which are in the end in the best interest of New Zealand.”
Balancing competing factors on the global stage and likely back at home too.
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.
