summary: State of the nation 2025

Prime Minister Rt. Hon. Christopher Luxon gave his State of the Nation speech last week and there are a number of points that may be of interest to members. 

  1. Recognition that there are three “big actors” in it: Government, Business and Communities / Iwi.  Each has a different role to play.  The PM’s view is that Government’s role is to create the operating environment and conditions that allow businesses to operate. 

  1. His number one priority is economic growth.  He wants to achieve this through a number of levers, including  mechanisms for supporting foreign investment (including a new dedicated agency), increased competition, changes to health and safety law / RMA, fast-track legislation and processes, intellectual property changes for researchers, and the creation of four new public research organisations focused on the bioeconomy, earth sciences, health and forensic sciences, and advanced technology (e.g. AI, synthetic technology and quantum computing).   

Watch the full speech here and read the text here

Points from Prime Minister’s State of the Nation Speech and Q and A 

  • Talked about education / health – literacy, waiting lists 

  • Growth is the number one priority this year 

  • Recognised impact of high interest rates and inflation – leading to the biggest recession since 1991 

  • Stated that living costs improved with higher wages than inflation, food prices more affordable, interest rates are falling, and Reserve Bank is forecasting more – “around $200/fortnight extra for someone looking to refix a $500,000 mortgage”. 

  • Talked about impact of tax relief changes 

  • “Spend carefully, invest in what matters most, and constantly looking for a better deal to deliver what matters most”. 

  • Talked about positive impacts for young families (he’s met in Christchurch and Hastings) and the benefit of tax relief and family boost, those families with mortgages who will soon benefit from the interest rate changes,  

  • “Kiwis deserve more than a stable job and stable prices, we all want a future to hope for.” 

  • Current and Future plans: “NZ to be a country of aspiration, ambition, and opportunity” 

  • “We already have a year of structural change under our belts, cracking down on the gangs and law and order in our cities with more foot patrols and more visible policing” 

  • A whole new approach to literacy and numeracy in education, with “world class resources hitting classrooms this year to ensure your students are mastering the basics well 

  • Talked about infrastructure changes: roads of national significance and water reforms without “confiscating local assets and imposing mandatory co-governance” 

  • Restoring “rights and responsibilities – welfare benefits with conditions – actively looking for work while on welfare, consequences for tenants who destroy state properties 

  • Health investment - $17Bn in last year’s Budget – more funding for emergency departments and surgeries, medicine reform,  

  • Housing – getting kids out of emergency housing “1700 have moved out of hotels and into proper homes under this government” 

  • Other areas: Fast-track, “stopping wasteful spending”, RMA reform, stopping the ram raids, new trade deals, “backing farmers”, banning cellphones in class, Family Boost, making foreign investment easier, increasing speed limits, “keeping councils focused on the basics”. 

  • “Recovery isn’t enough, we have to go for growth” 

  • “We need to shift our mindset [from focusing on problems] to focusing on growth”  

  • Example: Port of Tauranga expansion plans: “that is critical infrastructure for industries like forestry, kiwifruit and dairy, who just want to get on and do business… more ships, more export, more growth, more investment, more jobs”  

  • Example: Eden Park – kiwis go to Australia to see gigs and spend money in bars, etc. “while meanwhile Eden Park sits empty because of council event rules” 

  • “There’s always a reason to say no, but if we keep saying no we’ll go nowhere”. 

  • We need more jobs, investment, exports, and talent. 

  • Economic Growth is going to influence every decision that I take this year” 

Key Decisions this year: 

  1. “Taking competition a lot more seriously”: I want a NZ where big and small businesses thrive, pay higher wages, hire more people, and invest in growth.  Kiwis do well when businesses are competing really hard.  That competition isn’t always happening.  Last year the OECD said that greater competition was an important consideration in driving NZ’s long-standing productivity. “I think the OECD was right that NZ’s distance from overseas markets makes NZ’s domestic competition even more important. 

  1. Examples of bad competition: banking, energy, retail, construction, groceries. 

  1. Last year’s initiatives: “powering up Kiwi bank to take on the Australian banks”, opening construction to overseas products, energy – enabling fresh investment in solar, wind, hydro, natural gas “so that we can flood energy into a market badly in need of regeneration.” 

  1. “Making it easier to get things done in NZ”:  

  1. Repeal and replace the Resource Management Act – “ask anyone [farmers, builders], it’s hard to get things done.” Hope to introduce legislation to Parliament this year to do this.   

  1. Fast track will “super-charge economic growth, enabling more investments in energy, aquaculture, etc. but we can go further. 

  1. Fix “our broken health and safety rules”: “the health and safety codes are just a symptom of a broken system” – “they impose costs and slow down activities, often without making kiwis any safer” – this year we will make big changes in that area.   

  1. Mining needs to play a major role in the economy: compares NZ potential to Australia and Norway – mining plays a big part in those countries’ economic success. “MEV’s, data centres, aren’t made out of thin air, they use critical minerals.” 

  1. Tourism: “has a massive role to play in our growth story, I want the government to work with the sector to make that happen… our sector is world class but I think the government can be doing more to enable more opportunities nationally, quickly. 

  1. Farmers: “make life easier for them, and back them to compete with the world… core to our RMA reforms will be changes to make it easier to be a farmer… more time with the cows and less time filling in paper work and asking for permission.”  Supporting science research in agriculture, “enabling gene technology is about backing growth and saying yes instead of no” 

 

  1. Making NZ more attractive for investment: they have streamlined proposals with the Overseas Investment Office, which has decreased processing times and made NZ more attractive as a place for investment.  Substantial changes to the OIO Act are needed.   

Announcement: This will be supported by a new government body “Invest NZ” – NZ’s one-stop shop for investing in NZ.  “It will roll out the welcome mat, streamlining the investment process and tailoring support to foreign investors.  The objective is to increase investment across a range of critical sectors – e.g. banking, Fintech, innovation.  New Minister will be Todd McLay – who comes with extensive trade experience. 

  1. Increase the role of science and tech in NZ economy: “need a much greater focus on rapidly matching ideas with investment from overseas, and to set clearer priorities in NZ.”  

Announcement: Cabinet has agreed to “Shake up our Crown Research Institutes” – four new public research organisations focused on the bio-economy, earth sciences, health and forensic sciences, and advanced technology (e.g. AI, synthetic technology and quantum computing).  “Each organization needs to have a sharp focus on commercialization, harnessing Kiwi talents for maximum economic impact”.   

  1. Changing IP settings for researchers so they get more of the IP (and profit)– i.e. not just to the University where it is “not commercialized” / utilizedFollowing similar arrangements as overseas.  Example: Denmark – modern pharmacological breakthroughs have produced an “economic miracle”.   

Trade focuses: India and then China.  Want to double value of exports in the next ten years. 

“I look as NZ as having three big actors in it: Government, business and community/iwi.  Each of them does different things.  Community organisations see the pain, the hurt, the frustration, Government can set the framework and operating system up, but you as the business leaders go out there and make things happen with great sharpness and speed.  So, we’ve got to work together in an adult way, not waiting for the government to do everything.  I can control the conditions, which is the operating system, to then enable you to come on and create the businesses that you want.” 

“I want us to get our mojo and ambition.  I come back from being overseas and just see opportunity.  We are bang smack in the Indo-Pacific region, the fastest growing region in the world with a rising middle class who want our services.  Some of our companies are doing an exceptional job of unlocking those markets.  We sit with strong social and democratic institutions.   We have abundant natural resources.  And we have incredibly talented, world class, ambitious people.” 

“We need a plan that is focused on short, medium and long-term actions.  If you are just thinking today, you could power-up international education and tourism, and start to very quickly get economic growth benefits.  But we still have to make sure we put in place the investment side and the other areas I’ve spoken about.” 

 

 

Next
Next

Book review: Forces for good by leslie r. crutchfield and heather mcleod