National leader Chris Luxon backs violence prevention strategy, net migration 50K

New National leader Chris Luxon said he and his caucus will "fundamentally" back the Government's new family and sexual violence strategy.

The plan, launched by Family and Sexual Violence Prevention Minister Marama Davidson on Tuesday, aims to eliminate family and sexual violence over 25 years.

"We are fundamentally supporting that bill because it's absolutely the right thing to do and I've wanted to support it and our caucus want to support it too," Luxon said.

The strategy has no legislation attached to it yet, but it does mention legislative changes that might be needed in future. Luxon indicated he was keen to back the strategy on Tuesday morning, but said he had not had the time to look at the plan, which had only been announced hours prior.

Luxon also staked out positions on immigration and the Government's unemployment insurance plan - although he did not take a firm position on either.

The Government is pushing ahead with an immigration reset, which will set out how New Zealand's migration policy will work in the post-Covid world.

Luxon said appropriate net migration levels could be in the vicinity of about 50,000 a year - akin to pre-pandemic numbers.

I've always thought maybe in the order of 1 per cent of total population so that gets to that sort of number," Luxon said.

"I don't have a hard and fast number," Luxon said, arguing that he was more concerned about productivity.

"The average New Zealander earns in an hour what the average Australian earns in 44 minutes," he said.

Luxon said he was not inclined to back the Government's plan for social unemployment insurance.

The scheme would use a levy of between 1 and 2 cents in the dollar on personal and corporate income to fund a scheme that would pay workers 80 per cent of their incomes (up to a cap) for a period after they are made unemployed.

The scheme is being negotiated by the CTU, Business NZ, and the Government, with all three organisations backing the scheme.

Luxon said he could not give a firm position on the proposal without having seen the detail, but admitted he was sceptical.

"We haven't seen the detail of that - I know the Government may be well advanced but as an opposition, we don't see all of that," Luxon said.

"In the round, in the frame it feels like an effectively new tax - and anything that creates a 3-4 per cent increase in tax for want of a better world and that is something that is really challenging for hard working Kiwis, particularly when their wages aren't going up," he said.

Luxon faces another big test next week when he will be forced to respond to the Government's next set of financial forecasts and a statement on next year's budget.

The two documents, known as HYEFU (Half-Year Economic and Fiscal Update) and BPS (Budget Policy Statement) set out Treasury's view on the shape of the Government's books and the wider economy into the future, and the BPS sets out how much new money the Government plans to spend in the next budget.

National has historically spent less than $2 billion a year on new operating spending (the last year of the Key-English government allocated $1.8b of new operating spending in the budget, and Judith Collins promised a similar amount of new spending if she won the last election).

But Luxon would not be drawn on how much he would like to spend.

"Simon [Bridges] and I will get into that in the coming weeks. All I'm trying to say is paint a very broad picture rather than getting into the detail," Luxon said.

"What I can tell you is that fundamentally when you increase government spending 40 per cent in four years and at a time when you've got low interest rates and skill shortages, I actually think they've been pro-cyclical rather than counter-cyclical," he said.

Core Crown spending was $80.6b in 2018, and now sits $107b for the 2020/21 year.

Luxon demurred when asked whether he'd hew to the long-run National Party trend of keeping new operating spending - the money for day-to-day expenditure on running the Government - below $2b a year. That compares to an operating allowance in the most recent Labour Budget of $3.8b.

"Don't know - not going to go into there right now, and you've got to appreciate seven days into it [the National leadership] I'm not in that level of detail - all I'm just trying to paint is the big macro picture," Luxon said.

What Luxon would say is that high levels of spending would have an impact on inflation.

"What we'll continue to see is very high levels of Government spending, I think you'll continue to get rising levels of inflation.

"Ultimately, what we're coming to is the realisation the Government is running a macroeconomic policy, and really the tools that it's using are fundamentally low interest rates and also high levels of Government spending," Luxon said.

"All of that stimulates the effect of actually probably overheating the economy," he said.

This morning ANZ economist Miles Workman published a note on Wednesday morning saying "Overall the economy is looking overheated, with economic resource scarce and inflation everywhere".