Prime Minister Christopher Luxon is positioning the Government's already-signalled reforms to KiwiSaver, the education system and resource management as the centre piece of its re-election campaign.
And in his 2026 State of the Nation address in Auckland on Monday he warned there would be "no room for extravagant election promises".
Contrary to some expectations ahead of the speech, the Prime Minister made no new policy announcements, nor did he name the election date.
But he focused heavily on positioning the Government as a responsible one that was fixing up the country.
And in what appeared a clear, pre-emptive strike against opposition parties, Luxon said: "Any party that wants to ramp up spending is being economically irresponsible".
"Because the only way to spend more money is to borrow it or to raise taxes," he said.
"Borrowing more would lift our debt to dangerous levels, while raising taxes would snuff out the recovery and send Kiwis overseas.
"So, National is going to campaign on being responsible managers of the economy, who make the right decisions to fix the basics and build our future," Luxon said.
And he said if the country is serious about building the future we need "serious reform".
"That includes reform in three big areas – KiwiSaver, NCEA and the RMA.
"We need to be more ambitious for retirement savings. That’s why our Government is lifting the default rate of KiwiSaver contributions for employers and employees from 3% to 4% by 1 April 2028. But National will campaign on going even further, gradually increasing employer and employee contributions to 6% each by 2032 for a combined contribution of 12%.
“Building the future means equipping the next generation with the knowledge and skills they need to be successful as individuals and to contribute to our success as a country. That is why we are replacing NCEA with a new qualification with clearer grades and high standards for literacy and numeracy.
“Reforming New Zealand’s planning system to make it easier to build houses and other critical infrastructure like roads, energy projects, hospitals and schools is also key to building the future. We’ve done a lot in two years to unlock growth and development through things like Fast Track, but our replacement of the Resource Management Act will be the real gamechanger in the long term.
“National is focused on our plan to fix the basics and build the future for all New Zealanders. That plan is working and we need to stick with it so that all New Zealanders can get ahead and have the opportunities they deserve.”
Luxon talked up the "tight budgets" that "have become standard practice for this government".
"In just the last two years, our Minister of Finance, Nicola Willis, has delivered savings of around $11 billion per annum, equivalent to around $5,000 for every single household in the country.
"I know generating those savings hasn’t been easy, but they have provided the necessary headroom to deliver tax relief, invest in the frontline services Kiwis rely on and maintain a path back to surplus over the forecast period.
"New Zealand simply has to get its finances in order if it is to achieve a long-term improvement in its economic prospects.
"That’s why there will be more savings in this year’s Budget and no room for extravagant election promises."
30 Comments
no more sugar rush
no more property boom
investment in productivity vs speculation
Not productivity - that's just an energy-in/energy out ratio.
You mean production.
Which requires input in front, and output behind. Both of which are why the global geopolitical situation is disintegrating.
I have trouble differentiating people like out PM, from clowns.
And I have trouble differentiating the current crop of journalists, from clown-touts. The reconciliation - combine forward bets vs remaining planet - is near. Likely this year, certainly within the next four. The Great Pumpkin help us being 'led' by this lot through that bottleneck.
The tax cuts were eaten up within a few weeks of COL increases. Just as poorly times as the Ardern gov't 'cost of living' payment which was unnecessary amongst the almighty spend they committed the country to in approving national healthcare reform, knowing full well they would likely not have to deal with the overall costs while holding a majority govt.
For those others that recognise it, Luxon is taking from the John Key playbook and his speech before elected late 2008 in the face of the GFC, noting we needed to go 'back to basics' and come together as a nation understanding that we will have to suffer for a while until things get better. Too bad he already promised the world last election and has spent the better part of 3 years without delivering good on it. Most will only hold faith for so long before finally proclaiming the emperor has no clothes.
We're not particularly efficient in the way we do pretty well anything, so there's a lot of room for productivity improvement.
No, there isn't.
Reducing EROEI is a global problem, and from here on in, will outpace any efficiency you care to name.
So reducing waste in a system or process doesn't constitute an improvement in efficiency.
Interesting point of view.
Quite a logical one.
Name me a year where we used less energy than the year before? (And don't fudge one type for another).
There ain't one; GDP and energy-use have moved in lockstep forever.
Jevons Paradox - note the date...
Running as fast as we can to avoid going backwards
That's macro-level system requirements - effectiveness if you like.
It's not efficiency, where the measure is what can be achieved per unit of energy, and removing losses (waste) improves that.
And Jevons Paradox is an economic theory, not engineering.
You choose to miss the point.
And it's not a theory; it's an observation. Verified from the 1860's, until now.
Energy efficiencies are, of course, subject to the 2nd Law of Thermodynamics - so diminishing returns are inevitable, as are hard limits.
How are renewables diminishing?
Takes a lot of energy to fabricate wind turbines and they're lubricated with oil that is likely crude oil derived. Solar panels take energy to make with materials from all over the place that need to be mined, shipped, trucked, and again when delivering the finished product to market across the globe. Then they have a life span like everything else, albeit a longer one than previously, but still a limited lifespan nonetheless.
Well put.
And renewable resources generally, have an upper renewal rate. Aquifers, for instance, are glacially slow to replenish, but we are drawing down most of them at hugely unmaintainable rates. Forests grow at a rate - but we chop them faster (currently two mature trees dropped for every seedling planted, globally). We are depleting soil (both quantity and quality).
Well, yes, I do tend to miss the point of non-sequiters.
Fancy excuse for failing to join dots...
...
...
...
"Because the only way to spend more money is to borrow it or to raise taxes,"
He gets away with this because this is what people believe.
The only way to spend more, is to have more to spend it on.
That is the global dilemma.
Governments - that issue their own currency do not borrow or tax to spend. Governments create new money through the reserve bank any time they spend. Tax and bonds happen after this to remove money from circulation as an inflation control.
That reminds me of what Keynes said - "if we can do it we can afford it." In other words if there is spare capacity in the economy - rising unemployment and falling business output - then the government can increase the money supply - via deficit spending - to utilize available resources.
Provided those resources are available (at sufficient quantity) within the realm....things become somewhat more complicated when they need to be provided from without...as the Trump admin has discovered.
What is the counter argument exactly? ie who really benefits from a surplus?
Agreed - I cringe whenever this is said by economists and politicians. Labour's Barbara Edmonds used the classic "household budget" analogy recently, to describe the governments books and I wanted to cry.
Cry on if it helps.
But there are better responses. Like realising that if a household overspends it hurts the household.
And when a government overspends, it still hurts, just somewhere else.
zzzzzzz
What is more revealing than the boasts he made about wonderous achievements of this coalition government (whether justified boasts or not) is what he didn't mention - for example our public health system, climate change, child poverty and increasing wealth inequality.
As for "Borrowing more would lift our debt to dangerous levels, while raising taxes would snuff out the recovery and send Kiwis overseas." Lots of people are heading overseas despite (really, indirectly because of) this government's tax cuts. And we could, according to neoclassical analysis, more than double the level of borrowing without problems.
Can't decide if Luxon is being disoingenuous or is as economically illiterate as our Monster of Finance, or both.
"...being disingenuous or economically illiterate" is people sniveling about token tax cuts while wilfully ignoring over a decade of bracket creep from both main parties now stealing an extra billion $ pa tax by stealth
'what he didn't mention - for example our public health system, climate change, child poverty and increasing wealth inequality.'
Yes a huge indictment on Luxon who is clearly inadequate in the face of real issues. If he was a kindergarten teacher the speech would be OK, but he's not.
for example our public health system, climate change, child poverty and increasing wealth inequality.
I'd have to indicate that the mass embarkment of the national transformation of our health sector was initiated and committed to by the previous government, climate change isn't something one would notice on a grand scale in a 3 year term, and sadly increasing wealth inequality is a feature of capitalism and fiat currency.
That being said, I'm still awaiting Opportunities party to start campaigning to see what they are planning in more detail. I have no faith in the current lot as with the last, and can't understand why people would vote for National again after 2 years of dawdling and then pulling finger within 1year of election time to seem like they're doing something.
We need some hospitals and people to run them. It's really just a basic level of service for a developed country.
What's the plan?
Nelson, Whangarei, Waitakere, south of Middlemore north of Hamilton, and north of North Shore south of Whangarei.
I think they are the main rebuilds or new hospitals on the government planning lists.
I expect Labour to have more of a plan than the Nats. Could transfer the landlord tax breaks straight to this and they would coast in .
not sure three visits a year will fund all that.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.