Luxon backs economic growth but the Opposition slams government moves

Vineeta Rao
Auckland, January 24, 2025

In his State of the Nation, Prime Minister Christopher Luxon did not hold back sticky issues including his controversial mining decision to calling out the ‘culture of saying no.’

He also singled out some of his colleagues, notably Finance Minister Nicola Willis and Defence Minister Judith Collins, for praise.

But where there was praise, there was also blame and Mr Luxon called out the ‘culture of saying no,’ stating that it was ‘always easy’ to raise an issue and halt growth.

He cited the issues with the Port of Tauranga and the inability to hold more concerts at Eden Park as key examples of this.

“There is always a reason to keep saying no, but if we keep saying no, we will keep going nowhere. We need larger ports. We need more concerts,” he said.

Mr Luxon said that Kiwis often travel across the Tasman to view their favourite artists perform, spending money on food, accommodation and travel, while Eden Park remains empty and our hospitality industry suffers.

“Now in fairness, the Council has increased the limit, but I think they should seriously consider abolishing it completely.”

Cabinet Reshuffle and Economic Growth

Economic growth dominated Mr Luxon’s Address.

This focus on economic growth comes on the heels of his cabinet reshuffle earlier this year, along with the appointment of Nicola Willis to the newly created portfolio of ‘Economic Growth.

In his speech, he announced two new initiatives to achieve this growth.

The first was the creation of Invest New Zealand, an agency with a clear mandate to attract international capital, infrastructure investment, ideas, and expertise. The other was major reforms to Crown Research Institutes, including transferring them into four new Public Research Organisations. These will be focused on bio-economy, earth sciences, health, and forensic sciences, and AI and other advanced technologies.

Additional Reading
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Mr Luxon acknowledged that many Kiwis still experienced economic hardship but that last year the government put into place a platform for growth.

He claimed that the government policy of careful spending and strict economic management is making a difference, saying that the falling interest rates were an outcome of ‘Kitchen Counter Economics.’ He said that the government had met its campaign promise of tax relief last year, ensuring that Kiwis were keeping more of what they earned for the first time in 14 years.

Mr Luxon said that mining plays a bigger role in New Zealand’s economy.

“In regions like Taranaki and the West Coast, there are big economic opportunities, higher incomes, support for local businesses and families, and more investment in local infrastructure. The minerals sector will also be critical for our climate transition – EVs, solar panels, and data centres are not made out of thin air. I want to see mining employ more Kiwis and power more growth in the economy and I’m adamant we must take further steps to make that a reality,” he said.

PM off the mark: Hipkins

Labour Party Leader Chris Hipkins, speaking at his Party’s Caucus Retreat at Palmerston North on Thursday (January 23) did not think that Mr Luxon’s speech addressed any of the cost-of-living issues currently plaguing the country.

Mr Hipkins listed the cutbacks made by the Luxon government such as cutting discounted public transport, scrapping free and healthy school lunches, and reducing funding for apprenticeships as additional burdens on Kiwis already struggling with the cost of living.

On mining, Mr Hipkins said that energy security should not come at the cost of the environment and that New Zealand has plenty of renewable resources to address that issue.

He admitted that mining made economic sense under some circumstances.

“There are some areas of mining which are critical to New Zealand. If we want to build more roads, you have to mine the materials for the roads from somewhere. We need a clear plan that protects the environment,” he said.

Mr Hipkins was sceptical about the proposed reforms in the Science sector.

According to him,  the government’s plans for commercialisation may not resonate with the scientific community.

Labour’s Finance Spokesperson Barbara Edmonds scoffed at the creation of a new portfolio for Economic Growth, stating that it was always a priority and that if the government was only just realising that fact, then they had taken their eyes off the ball.

No hope, no vision: Swarbrick

Green Party Co-Leader Chlöe Swarbrick said that Mr Luxon’s State of the Nation address offered no hope or vision for a unified and prosperous country.

“Our country is not a corporation and a Prime Minister is not a CEO. Christopher Luxon today waved goodbye to record numbers of New Zealanders leaving the country as he offers nothing but reheated austerity. The IRD tells us that the wealthiest 311 households hold more wealth combined than the bottom 2.5 million while paying half the effective tax rate of the average New Zealander,” she said.

Ms Swarbrick said that the regulatory measures of the Coalition Government mean that you can bank more money and avoid paying tax if you speculate on properties instead of working.

“That is the productivity problem. We are a country of enormous talent that punches well above its weight. Let us invest in that, instead of hoping some billionaires will come and save us. Such a plan is not working out so well for the United States of America,” she said.

Vineeta Rao is an Indian Newslink Reporter based in Auckland.