PM pins re‑election pitch on growth, savings, and reform
Prime Minister Christopher Luxon (pictured) has used his State of the Nation address to claim New Zealand’s economic recovery has “now arrived”, arguing National is “fixing the basics and building the future” as it heads into an election year.
Despite "a challenging period for Kiwis and the New Zealand business community over the last five years", Luxon told business leaders in Auckland, inflation has fallen from over 7% to just 3%, while interest rates have dropped “from mortgage rates starting with a 7, to those starting with a 4 or a 5".
“It’s been two years of hard work – in government, from businesses large and small, and from every New Zealander,” he said. “But I feel more confident than ever that the recovery has now arrived and Kiwis can look forward to a year which is brighter than the last few.”
Luxon said surveys now support that narrative.
“Just last week, NZIER’s latest survey showed business confidence at its highest level since 2014. Business NZ’s PMI indicator released on Friday shows growth in manufacturing is stronger than at any time since December 2021 and higher than many of our global peers,” he said, adding that Auckland is now “the strongest region for consumer confidence.”
Luxon also pointed to early signs of a construction rebound, with building consents “up around 20% in the last six months” and construction job ads up “around 30% in the last year.”
Stuff reported that while Luxon used the speech to underline the economic turnaround, he stopped short of unveiling new policy or naming the 2026 election date, instead signalling that the date would be announced “shortly” in a separate interview.
Tight budgets and a warning on pre‑election spending
Luxon framed fiscal discipline as central to sustaining the recovery.
“At the half-year update in December, the government confirmed a path back to surplus in 2028/29, supported by tight budgets in the coming years,” he said.
In the past two years, Finance Minister Nicola Willis has delivered “savings of around $11 billion per annum, equivalent to around $5,000 for every single household in the country.”
“That’s why there will be more savings in this year’s budget and no room for extravagant election promises,” 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.”
Three big reforms: KiwiSaver, NCEA, and the RMA
Looking ahead, Luxon said National’s campaign will centre on three long‑term reforms: KiwiSaver, secondary qualifications, and resource management.
“If we’re serious about building the future, we need to increase our level of ambition for retirement savings,” he said, highlighting plans to gradually lift KiwiSaver employer and employee contributions to 6% each by 2032.
“For a 21-year-old earning $65,000… they could expect to retire with around $1 million in their KiwiSaver account,” Luxon said. “Following National’s proposed changes, that same individual could expect their KiwiSaver balance to be around $400,000 larger – or around $1.4 million in total.”
On education, he confirmed plans to replace NCEA with a new qualification featuring “clearer grades out of 100, stronger vocational pathways, and high standards for literacy and numeracy,” arguing NCEA’s flexibility has sometimes come “at the cost of developing the critical skills and knowledge” students need.
Luxon said resource management reform is the third pillar, with new laws expected to see “around half of all resource consents no longer required, promoting growth and development from day one.”
“In conclusion, National is on a mission to fix the basics and build the future,” the prime minister said. “More hope, more opportunity, more ambition, and ultimately greater prosperity – so that you, and your family, can get ahead.”
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