Real gross national disposable income fell 1.4 per cent.
Luxon addressed a turbulent week in politics: today’s announcement the country is back in recession, comments by his Deputy Prime Minister Winston Peters on co-governance and controversy about the use of a song during Peters’ state of the nation event last weekend.
In his speech to business figures, Luxon blamed today’s GDP result on the previous Labour Government.
“Sadly, the previous Government has borrowed more. We’ve got to face up to that. We’ve got nothing to show for it. We’ve got a big fiscal repair job to do,” Luxon said.
Of the prospect of the public voting in a Labour Government again, Luxon said “you shouldn’t do so for a generation”.
The National-led Government’s Budget would balance “a number of things”, Luxon said, saying a culture of fiscal discipline would be built through multiple budgets.
The Prime Minister also addressed the public service job cuts announced today with hundreds of roles to be cut across the Ministry for Primary Industries (MPI) and Ministry of Health. Luxon said many roles being cut were already vacant and pivoted to talking about the increased number of staff within the public service hired under Labour.
Act leader David Seymour had said the job cuts were “good”, but the Prime Minister would not be drawn on whether he agreed with those comments.
On reports of a foreign agency running a spy operation out of New Zealand’s Government Communications Security Bureau for years without the Government knowing, Luxon said that was a historical event. He said the Government was in a good space with Minister Judith Collins in charge of GCSB.
Luxon wouldn’t comment on “intelligence matters” when asked whether other foreign agencies were running similar operations currently.
Luxon said central and local government needed to work together on infrastructure for the next decade so that planning could last beyond political cycles.
Auckland mayor Wayne Brown has regularly commented on how Wellington needed to let Auckland make its own decisions. Luxon said he was confident he could work together with Brown to advance the city’s infrastructure.
The Prime Minister went on to say the previous Government had been “at war with farmers”.
“What I’d say to you is, you’re not villains. We want to back farmers big time. There’s nothing more economically important to us.”
Yesterday, Luxon faced questions from Opposition parties during Parliament’s Question Time, copping criticism for prioritising tax cuts for landlords over people with disabilities.
Labour leader Chris Hipkins asked Luxon why Cabinet had agreed to reinstate interest deductibility for properties without boosting disability support funding.
Luxon disagreed with Hipkins’ representation and said his Government was currently going through the Budget process and would be assessing the funding for the Ministry for Disabled People.
He was also pressed on what he had done to reduce the cost of living.
Green Party co-leader Chlöe Swarbrick asked him to name one action his Government had taken to support people facing higher prices.
Luxon’s first example was the ditching of the Auckland regional fuel tax, which he later conceded wouldn’t lead to lower fuel prices in the city until July.
She then asked whether landlords and high-income individuals or low-income people benefited the most from the Government’s proposed tax cuts.
Luxon said Swarbrick would have to wait until the Budget and maintained low- and middle-income people deserved breakthrough tax relief.
Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.
