Venu Menon
Wellington, November 27,2023
“Our number one job is to fix the economy. We have to reduce the cost of living, get inflation under control, make food more affordable, generate savings through our public service, [make sure] government spending is pruned, [and] restore law and order,” Christopher Luxon says, shortly after being sworn in as the 42nd Prime Minister of New Zealand by Governor General Dame Cindy Kiro at Government House in Wellington on Monday.
Luxon, who on Friday signed agreements with Winston Peters of New Zealand First and David Seymour of the ACT Party to form a historic three-party coalition government, marks the culmination of his party’s election triumph as well as his own meteoric rise to power.
But his statement of intent following the oath taking ceremony at Government House unwittingly echoes outgoing PM Chris Hipkins on the campaign trail of General Election 2023.
Clearly, the new coalition government led by National has to deliver on broadly similar pledges and objectives as its predecessor.
But Luxon is scant on detail on the big-ticket issue of tax breaks for middle and low income New Zealanders, the key point of differentiation between National and Labour.
Exactly how those segments will end up with more money in their back pocket is a matter to be worked out in the time ahead.
Like Labour in the final throes of its faltering government, the new National-led governing coalition is also set on generating additional revenue by cutting public spending.
“We want to make sure that we’re putting money behind good programmes that are actually achieving results.”
With NZ First having put paid to the foreign buyers tax, the dollars and cents of how the government will make up for that shortfall to pay for the tax cuts is a question that beguiles.
“As we keep saying over and over again, we have lots of buffers in our tax plan. But equally, we now have things like moving fees-free from first year to third year [of university], because the [lower] drop-out rate actually lowers the cost, so there’s savings there.
“We said we would defer changes to Working for Families to 2026. There are other adjustments we can make along the way,” Luxon notes.
Will those adjustments be reflected in the mini-budget due next month?
Luxon falls back on the politician’s standard operating manual: “We need to get back to the office, we need to be briefed by the Treasury, and we need to understand New Zealand’s fiscal position.”
But pruning the public service, the defining agenda of ACT’s Seymour, is a question that dogs the new PM. Asked how quickly he wants layoffs to begin at the public sector, Luxon replies: “As quickly as possible.”
Luxon adds: “What we’ve said from the beginning is that we want a 6.5% savings generated out of public service. We want CEOs to determine how best to deliver those savings. We are stopping programmes we are no longer supporting, redirecting resources behind things that are important to us, maybe not filling the vacancies that exist in the current books.”
The prime minister is unfazed that he oversees a 30-strong executive, the second-largest ever in New Zealand.
“We have 28 ministers, eight outside of Cabinet, 20 inside, and two under-secretaries. It’s not excessively large, but it’s also an acknowledgement that we have three coalition parties, [that] have got a lot of work to do.”
The 54th Parliament is scheduled to sit on December 5. In the interregnum, Prime Minister Luxon is looking forward to chairing his first Cabinet meeting on Tuesday, when he will begin his captaincy of the ship of state.
Venu Menon is an Indian Newslink reporter based in Wellington
