Christopher Luxon accuses Labour of leaving a $200 billion hole in the nations transport plan and signals spending reductions to come in his State of the Nation address today.
The staggering figure, worth about half of New Zealand’s entire GDP, was rolled out by Luxon in his first state of the nation speech as Prime Minister, which focused on the record of the previous Government.
Luxon said the state of the nation was “fragile”, and pointed the finger at Labour and its record in Government. Luxon warned he would be making tough and uncomfortable decisions to cut back on the level of spending, signalling a much tougher budget round than people are used to.
“Funding shortfalls for transport projects like light rail in Auckland and Wellington led the Ministry of Transport to estimate there was a more than $200 billion gap between the previous government’s overall transport promises and the funding it had set aside,” Luxon said.
“They were $200 billion short. If you saved $20,000 every hour, day and night, seven days a week, it would take you over 1,000 years to save that $200 billion.”
Hipkins said there was no hole in the plan, saying the former Government had been “very clear that as every Government has been, that [the plan] gets funded successively in three-year plans”.
“We were pretty upfront about how we were going to fund that,” Hipkins said.
Spending was the focus of the speech, with Luxon promising to “level with” the public about the state of the books and the public services they pay for.
“We’re... going to make some tough choices to get government spending back under control - because the current trajectory isn’t sustainable,” Luxon said.
He signalled a “return to the orthodoxy of tight Budgets”.
“Strong public finances aren’t enough of course to deliver a strong economy in their own right - but they are a critical pre-requisite,” Luxon said.
“We can’t build infrastructure if we can’t be trusted to borrow money. Businesses can’t attract investment if there’s no confidence in the value of our currency.
“And should disaster strike, we will need the financial freedom that low debt and healthy surpluses provide to fund the necessary rebuild.”
Luxon also pointed a critical finger at the education portfolio.
“In education, our levels of achievement and attendance are no longer world-class.
“Since 2000, our 15 year olds have slipped from fourth in the developed world for maths to 19th,” he said.
He noted that in the UK, 79 per cent of students attended school regularly. The equivalent rate in New Zealand was just 46 per cent.
“That’s a year of education lost by the time they’re 15 - and that’s not fair to them or their futures,” he said.
“I will not apologise for tough love,” Luxon said.
“I won’t apologise for making tough choices to support young people off welfare and into work, because 24 years languishing on welfare means no hope. It means no opportunity. It means no dignity from work,” he said.
Christopher Luxon at his first state of the nation speech as Prime Minister. Photo / Alex Burton
“All Kiwis, of course, have a right to support when times are tough. But with that right also comes responsibility. The responsibility to look for a job, or to train for new opportunities,” he said.
The speech followed Immigration Minister Erica Stanford signalling changes in the immigration portfolio.
Stanford told TVNZ’s Q+A that she was getting advice from officials about changing New Zealand’s migration settings, including bringing back pre-Covid migration policies.
“There are going to be some immediate [changes, and] some longer-term,” Stanford said.
She said she would wait for the review into the accredited employer work scheme to be released before announcing any changes. This review will be released in the coming weeks.
She said the Government would consider a special visa for New Zealanders with relatives in Palestine, but did not announce one.
Luxon is nearing the end of his Government’s 100-day plan, with the deadline for completing the 49 actions on the plan set to expire on March 8.
The Government moved ahead with that plan this week, repealing Labour’s Three Waters reforms and legislating changes to the way benefits are calculated, which was part of Nicola Willis’ pre-Christmas mini-Budget.
Luxon has just three weeks left to complete the plan.
