Stability and security were the messages from the Prime Minister as he delivered his first pre-Budget speech in Auckland today.
As Christopher Luxon revealed the coalition Government had decided to slash its operational allowance by $300 million (down from the previous $2.4 billion), he also stoked the immigration debate, telling business leaders he would choose social stability over their bottom lines “every single time”.
In a speech outlining the geopolitical situation and how New Zealand needed to protect itself, Luxon emphasised the importance of “social cohesion”, “security”, and “values”.
“We can’t control the storm, but we can secure New Zealand’s future within it,” Luxon said.
The operating allowance will be focused on traditional National priorities – law and order, health, education and defence.
Asked if that meant further job cuts and government departments being forced to cut programmes, Luxon said: “We made that expectation crystal clear from day one.
“It’s just, just the way we roll, which is every day I expect, as I would in any other enterprise across New Zealand, that actually every dollar is being deployed optimally.”
He refused to expand on where those cuts might come from.
It’s already been revealed that the Government will scrap fees-free tertiary study for final-year students.
A flagship policy from the Labour-led Government provided up to $12,000 in tuition fee payments for the first year of provider-based study, or the first two years of work-based learning.
The coalition Government changed it to cover the final year of tertiary education study.
Labour leader Chris Hipkins said Kiwis want to know that “the Government feels their pain and is going to do something to ease the pressure that they’re facing.
“That’s what every household is waiting to hear in two weeks’ time when the Government delivers its Budget.”
The Greens called spending cuts austerity, while the Public Service Association (PSA) said more cuts meant Kiwis would pay the price.
“Thousands of jobs have already been axed,” PSA national secretary Fleur Fitzsimons said.
“Services New Zealanders depend on are already suffering. And now the Prime Minister says ‘ongoing reprioritisation’ is required. Let’s be clear: that’s code for more cuts, all because the Government made a choice to fund tax cuts over public services.”
A recent PSA survey of workers found that one in four public service workers was thinking about leaving.
“This Budget risks turning that into a stampede,” said Fitzsimons.
Act leader David Seymour was quick to take credit for the cuts to planned spending.
“I’m very proud to be driving that change, but it also creates a real choice for voters,” he told reporters.
“On the one hand, you have three parties that can work together to make careful use of taxpayer money. On the other, who knows, probably a lot of memes on TikTok.”
The Prime Minister confirmed the Government remained committed to returning the books to surplus by 2028/29 and putting debt on a downward trajectory towards 40% of GDP.
Capital spending will be larger than originally planned at a net $5.7 billion.
“But here’s what we can control: how prepared we are, how resilient we are and how well we stick together,” he said to the 250 attendees.
Immigration, energy security and strong bilateral relationships will be priorities for National, Luxon said.
“In a more volatile world, some of our traditional friends and partners seem to be doing the same – forging new partnerships shaped by many of the values we hold dear, and their own support for the rules-based international order.
“The multilateral values and institutions that have underpinned our prosperity may be under strain, but they haven’t perished. We must evolve and remake them.”
Immigration is fast becoming a major election issue.
Luxon said National would have a “careful” immigration policy heading into the election, and he was aware immigration issues could fracture communities and social cohesion.
He cited cases overseas where immigration had become a lightning-rod issue and fractured communities.
“My message to the business community is that when it comes to immigration, when faced with a choice between social stability and your bottom line, I will choose the former every single time.”
Speaking to media after the speech, Luxon said he had stepped into the immigration discussion because social cohesion around the world was breaking down.
“When you look at what are the drivers around the world, around what’s driving lower levels of social cohesion and trust in institutions, a lot of it’s coming back from immigration, globalisation, technology,” he said.
“In the context of immigration, the point I was trying to make is that we are a country that should be very proud of our immigrant community, but equally, the reason it works in New Zealand, unlike it does in other countries, is because we have a smart, targeted and fair system.
“These are Kiwis who have left everything they know, chosen to come to this country, they work incredibly hard, they send their kids to school, they don’t go on welfare, and they are fantastic Kiwis, and they’ve made a great contribution.”
Hipkins criticised National and its coalition partners for whipping up the immigration debate.
“What we can see from the three parties that make up this Government is that they’re lining up for some very ugly anti-migrant rhetoric in this year’s election campaign.
“The Government certainly want to make immigration a top issue in this election because they want to blame migrants for the situation New Zealand currently finds itself in. Migrants are not to blame for higher unemployment. They are not to blame for higher government debt.
“This Government needs to accept responsibility for the consequences of the decisions they have made,” Hipkins said.
Luxon also spoke on the need for energy independence: “New Zealand’s energy vulnerability is no longer a theoretical risk; it is a live crisis on full display in the Strait of Hormuz every single day.
“On too many occasions, private capital, eager to bolster domestic energy production, has been pushed to the sidelines by overzealous planners and politicians in recent years.
“Several high-profile projects are now getting underway, thanks to our reforms like fast-track, which I expect will continue to grow in popularity by leaps and bounds.
“The reality is that when faced with energy shock after energy shock, it’s very hard to justify backing the skink over the solar farm.”
And in a hint of what the theme of the Budget may be, Luxon said it’d be focused on “securing New Zealand’s future”.
Katie Bradford is a senior correspondent at the Herald. She has been a broadcast journalist for more than 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.