"Ultimately it's a decision for the Prime Minister as to whether he is the appropriate choice for the ambassador to Ireland or not. I've only been here 18 months and I'm the outsider to this place, he's the inveterate insider and Parliamentary scrapper."
However, he would not say whether he would recall Mallard if he became Prime Minister, saying that was "hypothetical".
"[We] would have a lot more pressing issues than diplomatic appointments on day one. There are enough other issues in this country we will be fixated on."
Mallard will join his friend and former Labour MP Dame Annette King in the diplomatic ranks. Their other former Labour MP colleague Phil Goff is expected to be announced as High Commissioner to London soon.
Luxon said he was not opposed to former politicians becoming diplomats, pointing to King, the High Commissioner in Australia as an excellent pick.
"I do think sometimes it is appropriate that you've got a former politician in one of those roles. The reason is if they're held in huge respect and they've got massive mana and skills and experience, you actually need the access of a former politician in some capitals."
He said King had been "an outstanding High Commissioner to Australia".
Luxon said Mallard had a mixed record as Speaker – he said Mallard had been welcoming and supportive of new MPs and had made Parliament more family-friendly.
"But the National Party has had serious concerns, we've had two motions of no confidence and I think he's been quite uneven. I think even if I go back and look at the debates of past years, the life has been taken out of the place so I hope we get a bit more free flow in debate going forward.
"That's why I think we are really looking forward to Adrian taking over as Speaker."
He pointed to Mallard ejecting or punishing MPs for laughing or interjecting, saying it had lost the life of the debates.
Mallard has had a chequered relationship with the National Party in his role as Speaker since 2017, including several efforts to mount motions of no confidence in him. National has frequently accused Mallard of bias in his decisions and reining in the debate too much.
National has objected to Mallard's false claim that a Parliamentary staffer was involved in rape after an inquiry into Parliament's workplace culture, and his handling of the Parliamentary protests in February and March – including using music and water sprinklers to try to drive the protesters out.