Prime Minister Christopher Luxon hopes the new “digital nomads” reforms announced yesterday will boost New Zealand’s tourism industry back to pre-Covid levels.
“It’s something we talked about in opposition… we just had a lot of other things on the plate,“ he told the Mike Hosking Breakfast on Newstalk ZB this morning.
“We haven’t bounced back at all… we are actually turning off growth which is absolutely unacceptable.”
Luxon said the next steps would be to ensure we are on the top of tourists' bucket lists and to strengthen the relations that “went cold” through the Covid-19 global pandemic.
He also touched on New Zealand’s relationship with the central Pacific Island nation of Kiribati where aid is under review.
Luxon said since we are putting taxpayers' money into the country, we deserve the “courtesy of a conversation”.
He defended Foreign Minister Winston Peters, explaining that it was not his fault that we had “radio silence” from Kiribati during their time in government.
“He’s doing the right thing by saying we want the courtesy of engagement with Kiribati and equally we can’t send money if we don’t have a relationship.”
Luxon said it was not a reflection of our relationship with the Pacific as a whole.
Meanwhile, the Government’s vision for boosting economic growth is expected to come under scrutiny during the first week back at Parliament, with the Greens’ Chlöe Swarbrick calling on the Prime Minister to “end all speculation” about the privatisation of public services.
After a flurry of political events away from the Wellington beltway last week, including caucus retreats, State of the Nation speeches and Rātana celebrations, politicians are returning to Parliament today for the first official meeting in the House.
Prime Minister Luxon will deliver a statement kicking off the parliamentary year, with other political leaders then responding.
He’s expected to continue his focus on economic growth, which started earlier this month with his reshuffle, including the appointment of Finance Minister Nicola Willis as Economic Growth Minister.
That was also a theme of Luxon’s State of the Nation speech last Thursday, when he announced the creation of a new agency to attract foreign investment and reforms to the science sector. On Monday, ministers announced changes to visitor visa rules allowing tourists to work remotely while visiting New Zealand.
The Opposition is expected to scrutinise that rhetoric about economic growth, asking why it has suddenly become a focus and what the Government has being doing to grow the economy since it was elected to office.
The Half-Year Economic and Fiscal Update showed real Gross Domestic Product (GDP) growth would be just 0.5% in the year to June 2025, rising to 3.3% in 2027, before slowly falling. In the September quarter GDP fell 1%, following a 1.1% drop in the June quarter. Those two quarters of negative growth put New Zealand into a technical recession.
For Labour leader Chris Hipkins, key points of focus will be jobs and the cost of living, something he says the Government appears to have “completely abandoned”.
“The Government are focused on the wrong things,” he said yesterday. “They’ve got their priorities wrong.”
Unemployment sat at 4.8% in the September 2024 quarter and was forecast by the Treasury in December to peak at 5.4% in June this year. Meanwhile, despite data last week showing inflation was steady in the December quarter at 2.2%, the cost of living remains Kiwis’ main area of concern, according to the latest Taxpayers’ Union-Curia poll.
This week Swarbrick will also raise unease about the potential privatisation of assets and services. She wrote to Luxon yesterday asking him to “end all speculation” about future selloffs.
“We are requesting that you urgently show necessary leadership and put this issue to bed once and for all, committing to keep public services and key infrastructure in the ownership of the people of this country,” Swarbrick told the Prime Minister.
During a Question Time session last year, she asked Luxon whether the Government may be paving “the way for an eventual sell-off” of assets.
Swarbrick noted in her letter that Government members “laughed at the questions” and Luxon said she was in a “very dark and conspiratorial mood” and “there were no plans to do any assets sales”.
“Fast-forward just a few months and you are now publicly entertaining privatisation of public services and asset sales,” Swarbrick wrote.
She said Kiwis’ trust was being “tested once again”.
Her concern was sparked by Luxon’s call for more foreign investment in the likes of “key infrastructure like transport and energy”, as well as comments from Act leader David Seymour that New Zealand needs to move past a “squeamishness” about privatisation.
Seymour, in his own speech last week, said New Zealand needed to make some “tough choices” in areas like government spending and ownership.
For example, he raised the large amount of spending on healthcare, equal to about $6000 per citizen this year.
“How many people here would give up their right to the public healthcare system if they got $6000 for their own private insurance? Should we allow people to opt out of the public healthcare system, and take their portion of funding with them so they can go private?”
He also said there should be a debate about whether Government-owned assets that aren’t delivering returns should be sold.
Luxon has repeatedly said – including after Seymour’s speech – that asset sales will not happen during this term, but he was “open to the conversation” in the future.
Willis on Monday said the Government would continue to own “a significant number of” hospitals, roads and schools but it needed to “make sure we’re making the best use of a dollar” when building infrastructure or other assets.
National has long advocated for public-private partnerships – for example with roads - and Willis said the private sector has a “role to play”.
“What I judge it by is what will allow for the best service to be delivered in a way that represents the best value for taxpayers,” she said.
The minister said Treasury had been looking at assets owned by the Government and found “some areas where they think the entity is no longer delivering as well as it should to its purpose and where we should consider other ways of managing that asset or getting more from it”.
“We will have more to say about that in the future,” she said.
Also happening this week are more oral submissions about the Treaty Principles Bill. These began before the Justice select committee in Parliament yesterday with the likes of Seymour, former MP Andrew Little and health campaigner Lady Tureiti Moxon appearing.
Jamie Ensor is a political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office.
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