Prime Minister Christopher Luxon says next month’s Budget will walk a fine line of delivering tax cuts, growing the economy, and cutting government spending without going into “full austerity mode”.
Today Luxon is releasing a 36-point action plan, to be completed by the end of June. This follows the Government’s initial 100-day plan which undid much of the previous government’s programme, as Luxon had promised.
The new quarterly plan includes several commitments from the coalition agreements as well as National’s pre-election promises, including public service targets similar to what existed under former National Minister Steven Joyce.
The plan reveals the Government’s priorities for the coming months, including restoring the Three Strikes law, establishing the $1.2 billion capital infrastructure fund for the regions, and putting some detail around the plan to grow the housing stock via council planning for the next 30 years.
But the centrepiece of the next quarter will still be the Budget, delivered on May 30.
“The critical thing is the Budget, and getting the balance right in that Budget because we could carry on doing things as they are, or we could go to full austerity mode,” Luxon told the Herald.
“We want to find the balance, actually - balancing wasteful spending so that we can protect front-line services, [while providing] tax relief and growing the economy. That’s the key thing that we need to land this quarter.”
The economy is currently in recession - two consecutive quarters of negative growth - and hundreds if not thousands of jobs are being cut as the public awaits the details of Luxon’s tax relief package. He has said it will be broadly similar to what National campaigned on, and has pushed back on warnings over whether it might be inflationary.
Luxon said the overarching priorities for the next quarter hadn’t changed: the economy, law and order, better public services.
Public service targets would be ambitious, and look towards 2029:
“We want to be able to get to 80 per cent of our kids at school for 90 per cent of the term, and we want to see 80 per cent of our Year 8 kids ready to go for high school (by being at or above curriculum level),” Luxon said.
“A lot of the targets will be really hard. The point is they should be driving a discussion or debate as to why we can’t make sufficient progress towards them.”
He said that meant examining the root causes and having open, robust discussions in Cabinet committee meetings on what might make a difference.
“What I want to be able to do is take a topic for a meeting and actually do a deep-dive, for example, into school attendance. You’ll find there’s a whole range of contributing things leading to whether we’re getting our kids back into school,” Luxon said.
“What are the actions that we’re taking as a consequence of this discussion that hopefully will feed into a better result in the next quarter?
“Why does it take two weeks, in some cases, to access a GP? What are we going to do about that issue?”
The targets also helped to “focus the public service, focus the ministers”.
Luxon has been criticised for his use of urgency - which he has rejected - in the Government’s first 100 days, but he said urgency would still be used in the next quarter where appropriate.
“There’s obviously things that will still invoke urgency, I would imagine. There is a lot that we also want public consultation on and we want proper process around - which is important.”
1. Deliver a budget that reduces wasteful spending while investing in front-line services like health, education and police.
2. Legislate for personal income tax relief.
3. Legislate to introduce the FamilyBoost childcare tax credit.
4. Finalise the Government Policy Statement on Land Transport, freezing fuel tax until the end of 2026 and delivering significant investment for transport.
5. Take decisions to implement the Going for Housing Growth plan while making the MDRS optional for councils.
6. Respond to the independent review of Kainga Ora’s financial situation, procurement, and asset management.
7. Introduce legislation to improve the rental market.
8. Release draft plan to ease restrictions on building materials from overseas for public consultation.
9. Take decisions on measures to increase investment in renewable electricity generation.
10. Introduce legislation to amend the RMA to clarify application of National Policy Statement on Freshwater Management in relation to individual consents for freshwater and to extend marine farm consent.
11. Introduce legislation to suspend the requirement on councils to identify and adopt new Significant Natural Areas.
12. Finalise policy to keep agriculture out of the ETS.
13. Commence an independent review of the methane science and targets for consistency with no additional warming from agricultural methane emissions.
14. Reform the CCCFA regime to improve access to credit for home buyers.
15. Initiate the first regulatory sector review.
16. Take decisions on the scope of the extension to the Covid-19 inquiry.
17. Take decisions on reform of the Holidays Act.
18. Raise the energy New Zealand brings to key relationships through international engagements, focussing on our traditional partners, the Pacific, and South East and South Asia.
19. Take decisions on the removal of the ban on offshore oil and gas exploration.
20. Commission a study into New Zealand’s fuel security, including investigating the feasibility of reopening the Marsden Point Oil Refinery.
21. Establish a Regional Infrastructure Fund.
22. Progress legislation to improve rehabilitation, reintegration and safety outcomes in the Corrections system, including by extending eligibility to offence-based rehabilitation programmes to remand prisoners.
23. Take decisions to restore Three Strikes.
24. Launch a review of the firearms registry.
25. Take decisions on establishing a Youth Serious Offender Category and making Youth Military Academies a standalone sentencing option for the Youth Court.
26. Set targets for improving public service outcomes.
27. Take decisions on the rollout of structured literacy for year 1-3 students, including a phonics check.
28. Take action to strengthen teacher training, including refocusing Professional Learning and Development for teachers on numeracy, literacy and assessment.
29. Take action to develop standardised assessment and regular reporting to parents.
30. Introduce legislation to reintroduce charter schools.
31. Launch an Attendance Action Plan and introduce the first phase of initiatives to lift school attendance.
32. Take decisions to disestablish Te Pukenga and consult on a proposed replacement model.
33. Issue a new Government Policy Statement on Health, setting the government’s priorities for the health system for the next three years.
34. Take decisions to streamline the Medsafe approval process.
35. Take decisions to tighten controls on youth vaping.
36. Take decisions on the repeal of Section 7AA of the Oranga Tamariki Act.
Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery team and is a former deputy political editor.
Willis said thousands more will get hundreds of dollars from the scheme.
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