Luxon delivers ‘State of the Nation’ speech

Luxon delivered the speech today in Auckland

In his inaugural ‘State of the Nation’ speech, PM Christopher Luxon outlined a comprehensive plan he claims will ‘revitalise’ the nation as well as address the challenges faced by many Kiwis.

Luxon said the government was ‘committed to action’, detailing a series of reforms and initiatives across various sectors including education, health, welfare, and the economy.

Luxon painted a picture of a resilient and hardworking New Zealand that has, however, been hindered by recent adversities such as the global pandemic, natural disasters, and mismanagement by the previous Labour government under Jacinda Ardern and later, Chris Hipkins. He criticised the Labour government for excessive regulation, inefficiencies in public services, and financial mismanagement, which said had contributed to a decline in national productivity and well-being.

In education, Luxon lamented the falling standards and attendance rates, pledging to address these issues head-on.

He highlighted the deteriorating state of the health system, with increasing wait times for treatments and emergency services, and promised comprehensive reforms.

On the economic front, Luxon pointed to high inflation, rising interest rates, and a significant public debt, outlining his plans to restore fiscal discipline and stimulate growth.

Luxon addressed welfare reform and the need to decrease benefit dependency, especially long-term reliance on the State, while increasing incentives to work.

Infrastructure development was another major theme, with Luxon condemning the ‘obstruction economy’ and advocating for streamlined processes to expedite projects critical to New Zealand’s growth and sustainability.

Luxon said he wanted to see ‘a new approach to governance’, one that ‘champions ambition, aspiration, and hard work’. His vision for the country is one of unity, optimism, and progress, with a focus on making tangible improvements in the short term while also laying the groundwork for long-term success.

Labour and Greens react

Labour leader Chris Hipkins dismissed Luxon’s claim of a $200 billion transport shortfall as ‘nonsense’ and accused the current government of making New Zealand more fragile, divided, and isolating the vulnerable.

Greens co-leader Marama Davidson attacked the speech as lacking substance and focused on ‘negative actions rather than constructive plans’.

Reducing benefits would likely increase child poverty, she said. She accused Luxon of avoiding solutions to pressing issues like so-called ‘climate change’ and poverty, as well as ignoring the importance of the Treaty of Waitangi due to the division it might cause with his coalition partners.

Full text of Luxon’s ‘State of the Nation’ speech

Thank you for coming to my first State of the Nation as Prime Minister.

Thank you for coming to a speech where I don’t just get to talk about what we want to do. But a speech about what we will do, and what we are doing – right now – to get New Zealand Back on Track.

Thank you to all the Kiwis who put your trust in us and gave us your vote. But no matter who you are and who you voted for, know this: my team has your back.

One of the best parts of being Prime Minister is getting around the country meeting people and hearing their stories.

People like the farmers I met in Gore, who are working incredibly hard, but are frustrated at regulations slowing them down.

The teachers I met in Auckland, who are laser focused on delivering the best possible education for our kids.

The folk I met in Hawkes Bay, who have been helping with the rebuild after being hit by Cyclone Gabrielle 12 months ago.

The family I met in Northland battling through to pay day, and really struggling to keep up with the cost of food, petrol, and all the basics.

New Zealand is the best country on Planet Earth.

It’s not because of our beaches. It’s not because of our mountains. It’s certainly not because of our roads.

It’s because of you. Because of us. Our people.

Kiwis are resourceful and savvy. We work hard and we play harder.

We’re a country with a glint in our eye and fire in our soul. We reach for the stars even while we stay close to our roots.

We climbed Everest. We split the atom. We charted waka across the ocean to come here, and we’re blasting off to space to compete with the best in the world.

We’re also big enough and smart enough to face reality when we need to.

Not everyone will like it, but I think Kiwis need a Prime Minister that levels with them, and is straight up about the state of the nation and where we’re at.

The last few years have been too tough, for too many Kiwis.

We’ve lurched from challenge to crisis – a global pandemic, conflict overseas and natural disasters.

But those external crises have masked a more fundamental challenge.

Kiwis are a resilient bunch. But the last government treated us like a country that had lost its mojo. And because of that, we did.

We were badly let down by a broken and distracted government.

It tied down our economy with unnecessary regulation, and saw farmers and businesses as something to be sneered at rather than celebrated.

It delivered schools where kids learn less than their parents – if they turn up to school at all.

Hospitals that take longer to see patients, and then longer to treat them for serious illnesses, like cancer and heart disease.

A justice system which had a deliberate strategy to empty New Zealand’s prisons, even as violent crime soared.

And an economy, where inflation crushed wages, even as Kiwis are left paying more and more tax to fund Labour’s wasteful spending.

So, I have to level with you New Zealand and say – the state of the nation is fragile.

And here are the facts.

In education, our levels of achievement and attendance are no longer world class.

Since 2000 our 15 year olds have slipped from 4th in the developed world for maths to 19th.

Where 79 per cent of students in the UK attend school regularly – the equivalent rate of attendance in New Zealand is 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.

Well, I’m telling you, we’re going to fix that.

In health, our hospitals are no longer delivering the standard of care New Zealanders could once rely on.

Just a few years ago, 250 people were waiting more than 12 months to receive a first specialist appointment, now there’s more than 4,000.

One in three of us now wait longer than six hours to be seen in emergency departments.

And in last year’s Budget, Labour had even planned for hundreds of millions of dollars in Pharmac’s budget to expire later this year – putting medicines Kiwis rely on at risk.

You know what, we’re going to fix that too.

Take welfare.

There are 70,000 more people on a Jobseeker unemployment benefit today than there were in 2017. That’s like adding every man, woman and child in Napier onto the Jobseeker benefit in just six years.

Even more catastrophic is that if you do go onto a benefit, you’ll stay there for longer.

MSD have told us that for the 2,000 young people receiving a youth payment or young parent payment, they are now expected to spend an average of 24 years of their working life on a benefit.

24 years. Up almost 50 per cent in just three years.

Well, that’s got to change.

We’ll do everything we can to help people into work, but if they don’t play ball the free ride is over.

Late last year we learned of a financial pile-up in transport.

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.

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.

A great example is the huge cost-blow outs in the ferry project. So, we canned it because we’re not going to put up with financial mismanagement.

I know how hard you work to pay your taxes – and under my government the culture of treating taxpayers like an ATM is over.

For the economy, the conditions are rough. And Kiwis are feeling it – working harder and harder, just to fall further behind.

Too much wasteful government spending, high inflation, high interest rates, an economy in recession, and rising unemployment.

Inflation has stayed high – the cost of living crisis isn’t over yet, with inflation here higher than Australia, the UK, the US, Canada, Japan and the EU.

Interest rates are at their highest level in more than a decade – and that’s putting more pressure on families around the country.

Government spending is up 84 per cent since 2017 – and debt has climbed from $5 billion to a staggering projection of well over $100 billion.

In the Mini Budget last year Nicola delivered more than $7 billion of savings. There will be more where that came from, I can tell you – but it is a massive job to clean up the mess left by the previous government.

For example – since we came into government, we’ve uncovered a big financial mess at Kainga Ora.

Advice from Treasury was that Kainga Ora’s forecasts relied on the sale of 10,200 homes in the coming years just to balance its books, even while Kainga Ora’s debt is set to rise to $29 billion.

That’s just one of the nasty surprises we’ve discovered since coming into government – and I’m sure there will be more.

While we’re being honest with ourselves, the long-term performance of our economy is also a major problem.

New Zealand’s economy is now less productive than vast swathes of the former Eastern Bloc, including Poland, Slovenia, Slovakia, and Lithuania.

The median full-time worker in Australia now earns $20,000 more a year than someone in New Zealand.

It’s no surprise therefore, that Kiwis have been voting with their feet. Last year a record net 44,500 New Zealanders left the country.

It is only through a strong economy that we can end the cost of living crisis, lift incomes and give those Kiwis a reason to stay in New Zealand.

And so you know what, we’re going to fix that too.

But it’s not going to be easy.

It is worth being straight with each other about the size of the challenge, because I know we can be so much better than this.

I know we can do it. I know we have what it takes.

We’re brimming with potential: right in the middle of the Asia-Pacific, a liberal democracy with well-established institutions, and a vibrant multi-cultural nation built on strong bi-cultural foundations.

We’re fair minded – but competitive. We’re resilient – but adaptable.

And given the opportunity – we never fail to grasp it with both hands.

But we need a new approach to turn this around.

We need to get our mojo back.

We need to celebrate ambition and aspiration – and back ourselves to take on the best in the world.

There’s so much, so much more that unites us than what divides us.

However, you got here, whenever you arrived, and wherever you’re going – we all want to leave our kids, our grandkids, and our community with more hope, more opportunity, and more confidence in the future of this great country we call home.

Kids born this year will be turning 16 in 2040.

When I wake up in the morning I’m thinking about the country we create for them to live in.

But we can’t wait 16 years. We need to make life better in 16 months. In 16 weeks.

So, when I wake up in the morning, I’m ruthlessly focused on

rebuilding the economy,
restoring law and order, and
delivering better schools and hospitals.
And across all of that, I’m obsessed with getting stuff done. Fast.

And so that’s what we’ve been doing.

So, let’s look at what we’ve delivered in our first 81 days – because we’ve already achieved so much:

• We’ve abolished the Ute Tax, to finally deliver farmers and tradies relief after years of disrespect.
• We’ve started cancelling the blanket speed limit reductions that are slowing Kiwis down.
• We’ve stopped Auckland Light Rail, which after six years, cost taxpayers more than $200 million and didn’t deliver a single metre of track.
• We’re repealing the Auckland Regional Fuel Tax – gone on the 1st of July.
• We’ve cancelled the planned hikes to fuel tax which would have taken motorists further backwards.
• We cancelled Let’s Get Wellington Moving because frankly it wasn’t moving.
• We’ve abolished Fair Pay Agreements and brought back 90 day trials – giving businesses the confidence to hire someone who needs a fresh start instead of letting so many Kiwis spend their life on a benefit.
• We’ve returned the Reserve Bank to a single focus on price stability, after years of rampant inflation and hopeless economic management.
• We’ve delivered more than $7 billion in savings, so we can deliver Kiwis tax relief they desperately deserve – not more wasteful spending.
• We’ve repealed Labour’s broken RMA reforms that made it harder and more expensive to build anything, just at a time that we need to get our economy moving again.
• We’ve banned cellphones in schools – and we can already see the impact that’s having to keep kids focused and reduce online bullying.
• We’ve made sure every kid in every school gets an hour a day of reading, an hour of writing and an hour of maths – and appointed an expert group to redesign the maths and english curriculum by the end of the year so we can teach the basics brilliantly.
• We’ve begun disestablishing Te Pukenga – after the last government spent hundreds of millions of dollars even while staff morale collapsed and regional needs suffered.
• We commissioned an independent review into the woeful state of Kainga Ora led by Sir Bill English – and judging by the news this morning over their forecasts you can see exactly why we were so alarmed.
• We’ve progressed work on a third medical school with Waikato University, because we need more home-grown doctors.
• We’ve taken the first steps to extend free breast cancer screening up to age 74.
  Soon we’ll introduce legislation to disestablish the Māori Health Authority – because we want to see better results for Māori, not more bureaucracy.
• We deployed 200 additional security personnel which has reduced violent incidents in hospital emergency departments, keeping staff and patients safe.
• We’re bringing in tough new laws going after gangs and illegal firearms. And if you’re in a gang, I’m telling you, we’re coming after you.
• We’re ending taxpayer funding for cultural reports, which became a cottage industry to reduce criminals’ sentences, even as victims didn’t get the support they needed.
• We’ve abolished Labour’s prisoner reduction target – because after six years of a government that let violent crime soar even while they deliberately emptied New Zealand’s prisons, Kiwis knew we needed a change.
• And just this week, we repealed Labour’s undemocratic and unaccountable Three Waters reforms. Our government will restore local control of water after Labour tried so hard to take it away.
• We are a government of action. We are delivering big changes and I’m incredibly proud of the progress we’ve made as a government in just 81 days.

There’s always more to do – and we’ll keep working hard – laser focused on rebuilding the economy, restoring law and order, and delivering better public services.

We’re under no illusions about the scale of the challenge we face as a country.

These problems will not be fixed in one hundred days – or a hundred days after that.

In my former life, it’s what I would have called a big turnaround job. On the campaign trail, it’s what we all just called getting New Zealand Back On Track.

And I want to be up front with you: achieving that will be difficult.

It will mean making tough choices.

But 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.

I haven’t met a single young Kiwi whose ambition, creativity, and spark would be best served by a life on a benefit.

So, I will not apologise for tough love.

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.

And if you don’t – make no mistake – there will be consequences. Our government will support you – but there will be sanctions if you don’t take that support seriously.

Now that won’t be popular with everyone – but we will do it, because I am not prepared to write off a whole generation of young Kiwis.

We’ll also make tough choices in infrastructure and planning.

Ask anyone and they’ll tell you New Zealand has a massive infrastructure deficit. Economists will tell you it’s worth hundreds of billions of dollars – but most of us just see it in the roads we drive on that need improving and the pipes spewing water onto the street.

Funding and financing is a major barrier – and we’ll have more to say later this year on our government’s plans to fix that.

But planning and resource consents are also a major barrier. Just getting permission to build a new road or a windfarm can take years – even while Kiwis are stuck in traffic or trudging slowly towards Net Zero 2050.

It’s simply got to stop. New Zealand has become an obstruction economy – where doing anything or building anything means mountains of paperwork and years of dithering and delay.

Yes, we need to strike the right balance between protecting the environment and building for the future. But right now, our economy is stuck in reverse.

While other countries charge ahead with big investments in modern infrastructure to beat climate change and grow their economies, New Zealand is going backwards.

It’s not good enough – which is why our government is making the tough choices required to rebuild New Zealand’s economy.

We’re designing a new fast-track consenting process and planning big changes to the RMA, so major projects can get consented faster and construction can begin sooner.

That won’t be popular with everyone – I get it.

For many, the status quo is acceptable – the steady climb in housing costs, the hours stuck in traffic, and the slow erosion of jobs and opportunity here at home.

But I refuse to let New Zealand get stuck in the slow lane.

We want more roads, we want more windfarms, more homes, more solar, more geothermal, more commerce, and more opportunity for New Zealanders to get building and get ahead under their own steam.

We’re also going to make some tough choices to get government spending back under control – because the current trajectory isn’t sustainable.

It just isn’t credible for government to remain so large and yet deliver so little.

We need to get the public finances back in order.

That means a return to the orthodoxy of tight budgets, careful stewardship of public money, and a determined focus to keep or return the books to surplus.

Strong public finances aren’t enough of course to deliver a strong economy in their own right – but they are a critical pre-requisite.

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.

Now that won’t be popular with everyone – but it is necessary. More spending, more borrowing, and more taxes isn’t a pathway to prosperity, it’s a recipe for more of what we’ve seen from the last few years. Rampant inflation, higher interest rates, and an economy going nowhere fast.

The state of the nation is fragile.

New Zealand has been stuck in a cycle of public services under strain, a government distracted from the basics, and an economy stuck in reverse.

But our job is to restore the spirit and the promise of New Zealand, that if you work hard – come what may – you can get ahead.

Our government was not elected to deliver more of the same.

We were not elected to fiddle and tinker and tweak while the big problems go unsolved.

We were not elected to manage decline.

My government will not shy away from making those difficult choices we all know are necessary to deliver the future New Zealanders deserve.

We will not leave our future to chance.

We will not sit by and wait for miracles to happen.

Tough choices aren’t cause for pessimism – in fact, exactly the opposite.

I am committed to delivering the change New Zealanders voted for because I am so confident this country can be so, so much better than we are right now.

What gives me that confidence?

It’s you.

It’s the strength and the calibre of the New Zealand people.

This country is jam packed with ambition and empathy. Extraordinary people who keep the gears of their community moving through the power of their individual contributions.

Running the footy club. Volunteering at the food bank. Trapping pests.

It’s that sense of responsibility and purpose in every community around the country that gives me optimism for the future.

Our government will bring that same sense of responsibility and purpose to governing.

Above all, we will deliver the change New Zealanders voted for and the change they were promised.

Thank you.