Prime Minister Christopher Luxon made a pre-Budget speech at a BusinessNZ event in Auckland.
It comes a day after pay equity changes passed into law.
Unions are organising protests around the country.
The Prime Minister has announced funding will be provided in Budget 2025 to the Government’s new Invest NZ agency, intended to provide support to foreigners wanting to invest in New Zealand.
He made the announcement at a BusinessNZ event in Auckland today, ahead of the Budget being delivered onMay 22. The speech will be livestreamed from the top of this article.
It comes in the immediate aftermath of the Government making it more difficult for people to take pay equity claims, a move that will save the Crown “billions”. While the Government has said there were workability issues with the regime requiring change, opponents have been stunned by the move, which they say will hurt workers.
Christopher Luxon has been mostly absent from the House as his Government used urgency to push through changes to the country’s pay equity regime. He was in Rotorua at a tourism conference yesterday as MPs spent hours debating the legislation.
As is usual for a Prime Minister on a Thursday, Luxon was also away from Parliament today, attending the BusinessNZ event where he gave a pre-Budget speech.
While it was mostly a scene-setter, outlining some of the global economic uncertainties as well as what he considered positive trends domestically – such as improving interest rates – Luxon did make some announcements.
He confirmed the Budget would allocate funding for InvestNZ, a new agency being set up to roll the welcome mat out to foreigners wanting to invest in New Zealand. It was announced in Luxon’s State of the Nation speech back in January.
“Promoting global trade and investment has also been a focus of my Government in 2025, even before the recent bout of uncertainty offshore,” Luxon said.
He said that modern, reliable infrastructure would play a major role in the “Going for Growth” plan the Government is implementing. While the operating allowance at this year’s Budget is relatively small – $1.3 billion – he said the total capital expenditure is “a little higher than forecast at $6.8b”.
“When that is offset by savings identified in this year’s Budget, it means the net capital allowance is $4b, compared to $3.6b previously signalled in the Budget Policy Statement.
“For businesses, that investment represents an opportunity to develop critical skills and capability, promoting growth for many years to come. For Kiwis, it will mean another big investment in the quality frontline services, like health and education, they deserve.”
Christopher Luxon talks to the media after delivering his pre-Budget speech. Photo / Ben Dickens
The Prime Minister said the Budget would focus on efforts to develop talent and promote competitive business settings, “but I won’t be making announcements in those areas today”.
“However, as Nicola Willis confirmed last week and I can confirm again today, there will be a small number of measures in this year’s Budget designed to make it easier for businesses to invest, whether they are based here or offshore.”
Luxon also touched on science, innovation and technology, announcing the Government would retain the Research and Development Tax Incentive that was introduced by the last Labour Government but which has been under review recently.
The review was a statutory review, meaning it was not initiated by the current Government, but by the legislation that created the tax credit back in 2019. The tax credit was opposed by National and Act at the time.
Luxon said the Government would retain the tax credit “so businesses have the certainty they need to keep investing and keep going for growth”.
Money will also be allocated in the Budget to establish the three new previously announced Public Research Organisations (PROs), created as part of the reforms from the Crown Research Institutes.
The Prime Minister noted that having the small operating allowance ensured Treasury “can still forecast a surplus within the next four years”. He made repeated mentions of achieving a surplus throughout his speech, describing it as part of the Government’s fiscal strategy.
“Spending more on everything, as some commentators have called for, would mean larger deficits, more debt, and ultimately fewer choices in future Budgets as the cost of servicing our debt grows even larger and the prospect of returning to surplus evaporates,” he said. “Managing and responding to critical risks is also more challenging with high levels of public debt.”
