PM faces pressure as Auckland's unemployment outpaces nation
Prime Minister Christopher Luxon (pictured) has rejected criticism that the coalition is distracted from economic priorities, after business leaders raised alarm over Auckland’s rising unemployment and slowing activity.
Stats NZ data showed Auckland’s unemployment rate reached 6.1% in the June quarter, the highest of all regions and well above the national rate of 5.2%. Auckland Business Chamber
CEO Simon Bridges urged the government to take stronger action to stimulate growth, while Heart of the City’s Viv Beck warned, “Rome is burning for some of our small businesses.”
Newmarket Business Association head Mark Knoff-Thomas added it was “ludicrous” the government was focusing on passport wording instead of supporting the economy, RNZ reported.
Luxon: ‘Focused 100% on growing this economy’
Speaking to RNZ’s Morning Report, Luxon dismissed claims of distraction.
“We’re actually focused 100 percent on actually growing this economy … We inherited the big recession. We’ve had a massive post-COVID hangover,” he said.
Luxon noted challenges around international tariffs and sentiment but stressed signs of recovery: “South Island primary industries were growing strongly but we know we’ve got work to do in our cities.”
He highlighted government initiatives including the fast-track scheme for major projects, capital investment write-offs for small businesses, and measures to streamline building approvals.
“We’re open to continuing to look at what more we can do. We’re pretty dynamic and agile. We keep adjusting and doing things to adjust to the circumstances that we’re in,” Luxon said.
Bed tax rejected, business relief promised
Auckland Mayor Wayne Brown has pushed for a bed night levy to fund city recovery, but Luxon confirmed the government would not introduce the tax.
“It’s really tough in Auckland and also in Wellington, you know? If you’re in Christchurch, it’s different … but there’s no doubt about it,” Luxon said.
Instead, Luxon said policy will continue to focus on supporting investment and easing cost pressures for small businesses and households.
Political stakes rise ahead of 2026 election
With polls showing National and Labour virtually tied, Luxon also pushed back on leadership speculation.
“I would ‘absolutely’ be leading National into the 2026 election. For me it’s actually staying focused on what New Zealanders care about and that is actually us fixing this economy,” he said.
“I appreciate it’s been difficult, you know, we’ve had a very difficult, you know, a poor inheritance, but, you know, our job is to fix it for New Zealanders and that’s what we’re going to do every day.”
Auckland’s higher unemployment and sluggish growth could dampen housing demand in the short term, but lower rates and government stimulus measures may help underpin mortgage activity.
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