New Zealand Prime Minister Christopher Luxon has delivered a hard-hitting speech on the state of the nation, emphasizing the need for “tough choices” to improve the country’s fragile economy. Luxon expressed his intention to tighten social benefit rules, particularly targeting long-term welfare recipients. He described this policy as “tough love” and stated that the era of treating taxpayers like an ATM is over.
Luxon placed the blame for the current situation on the previous Labour government, accusing them of treating New Zealand like a country that had lost its mojo. He pledged to fix education, health, and welfare while criticizing wasteful government spending, which he claimed had risen by 84% since 2017. The Prime Minister stressed the importance of getting public finances in order and returning to tight budgets and careful stewardship of public money.
Addressing the long-term performance of the economy, Luxon highlighted New Zealand’s low productivity compared to countries in the former Eastern Bloc. He pointed out that the median full-time worker in Australia earns $20,000 more per year than someone in New Zealand, leading to a record number of New Zealanders leaving the country.
Luxon acknowledged the need for a strong economy to address the cost of living crisis, increase incomes, and encourage people to stay in New Zealand. However, he provided limited details on how his government plans to finance major infrastructure projects and admitted that funding is a major barrier. A comprehensive plan is expected to be released later this year.
The speech made no mention of National’s coalition partners ACT and New Zealand First, raising questions about the government’s unity and collaboration. Opposition Labour leader Chris Hipkins rejected Luxon’s criticism, stating that New Zealand’s economy is in a recovering stage after the global pandemic, like many other economies around the world. He accused the government of dividing the country and marginalizing vulnerable communities.
Luxon’s State of the Nation speech has set the tone for his government’s approach to tackling the nation’s economic challenges. With a focus on tightening social benefits, reducing wasteful spending, and addressing low productivity, Luxon aims to restore New Zealand’s economy and provide a strong foundation for growth. However, the lack of specific details on financing major infrastructure projects raises concerns about the feasibility of these plans. As the government works towards releasing a detailed plan later this year, the nation will be watching closely to see if Luxon can deliver on his promises and lead New Zealand out of its current economic fragility.
