Christopher Luxon State of the Nation speech: ‘Culture of saying no’ hurting economic growth, defends intention to grow mining
Prime Minister Christopher Luxon has taken aim at a “culture of saying no” in his State of the Nation address, arguing it is holding back New Zealand’s economic growth.
Luxon claimed it is “always easy” for someone to find an issue or get in the way of halting growth, pointing to issues at the Port of Tauranga and an inability to hold more concerts at Eden Park.
Scott Palmer
Luxon's standup is now over.
Interislander ferries
Scott Palmer
On the ongoing ferries debacle, Luxon said KiwiRail ran the ferries and it was their responsibility to maintain those ferries to the highest standard.
Luxon on Rātana, Waitangi Day
Scott Palmer
On Rātana, Luxon said he really enjoyed the day and his message would be around how we move forward as a country while respecting the Treaty.
He would not confirm where he would be on Waitangi Day when asked.
RMA reform
Scott Palmer
Luxon said his Government had shocked and broken the RMA system with Fast Track.
"We are not going to apologise because this country desperately needs growth."
CRI chairs supportive of change - Collins
Scott Palmer
Collins said the Crown Research Institutes had been looking at their staff and they knew that there was change coming.
She said every chair was supportive of what was happening.
"They are excited about this."
Collins said people like to have a bit of competition.
All staff have been told.
The boards and chief executives had been involved.
Collins said big changes were expected in the next few months.
On closing Callaghan Innovation, Collins said the institute said they never really had much of a chance.
"They never really had much of a chance to be focused on new technologies," she said, adding it has "had its day".
"Callaghan is closing very soon."
Mining on conservation land
Scott Palmer
On mining on conservation land, Luxon said there was "marginal" land across New Zealand where this should happen.
"The reality is you need lithium to power an EV."
"You need critical minerals ... if you want to build more roads, I want quarries closer to where those (roads are being built)."
Increase foreign investment
Scott Palmer
On the new dedicated investment team, Luxon said he expected them to be out building rapport to increase foreign investment.
Luxon said the "showstopper" was sovereign wealth funds.
Luxon said the Government had been working on overseas investment legislation since last year.
Asked how foreign investors could be confident, given NZ First previously cancelling a project: "Going forward from here, all parties in the coalition are determined to get investment in this country."
Luxon starts speaking
Scott Palmer
Luxon thanked Collins for her work on the Science, Innovation and Technology portfolio, saying the both of them were very passionate about this space.
Luxon said Reti was the "perfect" person to take over the portfolio.
Collins said there were "ridiculous situations" under the current laws that prevented scientific development. Genetic engineering was an example.
Invest New Zealand
Scott Palmer
McClay said the new "one-stop shop" – called Invest New Zealand- is needed as the country did not do as well as it needed to on foreign stock.
He said he often spoke to people overseas who said they found it difficult to invest in New Zealand.
McClay said New Zealand needed a single-minded focus on export and how to increase foreign investment.
Collins praises replacement Dr Reti
Scott Palmer
Collins said Dr Shane Reti was "just the person for the job" to take over her Science, Innovation and Technology portfolio.
"We know we have the right people for the job."
Collins' speech starts
Scott Palmer
Prime Minister Christopher Luxon is with Trade Minister Todd McClay and Science, Innovation and Technology Minister Judith Collins.
Collins says the current seven Crown research institutes are being merged into three.
Collins said the Government is also creating a national policy for intellectual property as well as a "one-stop shop" for import, exports and trade.
She also said Callaghan Innovation would be disestablished.
"The changes I announced today are extensive but they would ensure a system that enables maximum value for the economy."
Luxon to hold standup
Scott Palmer
Prime Minister Christopher Luxon is set to hold a standup after his State of the Nation address on Thursday.
In his speech, he emphasised the need for more concerts, mining, and infrastructure to boost jobs and innovation.
Luxon also announced plans to reform Crown Research Institutes into Public Research Organisations.
He also announced the creation of Invest New Zealand, an agency to attract foreign investment.
“There’s always a reason to say no, but if we keep saying no, we’ll keep going nowhere. We need larger ports. We need more concerts,” he said.
“We need more jobs, more investment, more innovation, exports, and talent. The bottom line is we need a lot less no and a lot more yes.”
On concerts, Luxon said they can boost our local economies.
“Kiwis spend thousands flying across the Tasman to see massive concerts, go out to bars and restaurants, and boost the Australian economy, when back home Eden Park sits empty because of council event rules.
“Now in fairness, the council has increased the limit, but I think they should seriously consider abolishing it completely.”
His speech was almost completely about the economy, and he said: “As far as I’m concerned, going for growth is without a doubt priority number one”.
To underline that, Luxon made two announcements, including the creation of Invest New Zealand, an agency to attract foreign investment.
He said the Government had addressed issues with the Overseas Investment Act, but more action needed to be taken than just dealing to legal barriers.
“Invest New Zealand will roll out the welcome mat – streamlining the investment process and providing tailored support to foreign investors.
“The objective is to increase capital investment across a range of critical sectors – like banking and fintech, key infrastructure like transport and energy, manufacturing, and innovation.”
Invest New Zealand will incubate within New Zealand Trade and Enterprise (NZTE) and then transition to a new Autonomous Crown Entity.
It is expected to have a clear mandate to attract international capital, infrastructure investment, ideas, and expertise.
NZTE will be refocused with a single mandate to support Kiwi businesses to export more and grow international markets.
They will both retain NZTE staff and help achieve the Government’s goal of doubling exports by value in 10 years.
The second announcement is a major reform to Crown Research Institutes, including transferring them into four new Public Research Organisations (PROs).
Those PROs will be focused on bio-economy, earth sciences, health, and forensic sciences, and AI and other advanced technologies.
“Each are expected to have a sharp focus on commercialisation – harnessing Kiwi talents for maximum economic impact – higher incomes, more investment, and more opportunities to get ahead.
“I am particularly excited about the establishment of an advanced technology institute, focused on the commercialisation of cutting-edge technology, like AI, quantum computing, and synthetic biology.”
Luxon also signalled other areas where he aims to boost growth.
That includes creating more competition, repealing and replacing the Resource Management Act, dealing to “broken” health and safety laws, making mining a bigger part of the economy, and growing tourism.
On the controversial issue of mining, Luxon said it needs to play a bigger role in the economy.
“It’s easy in politics to say you want a sovereign wealth fund like Norway, or much higher incomes like Australia – but it’s much harder to say you want the oil and mining that pays for it.
“In regions like Taranaki and the West Coast there are big economic opportunities – higher incomes, support for local business and families, and more investment in local infrastructure.
“The minerals sector will also be critical for our climate transition – EVs, solar panels, and data centres aren’t made out of thin air.
“I want to see mining employ more Kiwis and power more growth in the economy and I’m adamant we must take further steps to make that a reality.”
Speaking to media later, Luxon acknowledged there was “sensitivity” around mining, but “we don’t have the luxury to turn off growth”.
“When there is opportunity, we are going to say yes to stuff. I appreciate that won’t be everyone’s cup of tea.”
Labour leader Chris Hipkins, speaking at his party’s caucus retreat in Palmerston North on Thursday, said he didn’t believe Luxon’s speech offered any hope of addressing cost-of-living issues.
He said New Zealand shouldn’t be mining for fossil fuels to secure energy security as “we’ve actually got plenty of renewable energy to be able to do that”.
But he recognised some may be required.
“There are some areas of mining which are critical to New Zealand. If we want to build more roads, you have to mine the materials for the roads from somewhere. We need a clear plan that protects the environment.”
Hipkins said reforms in the science sector would require greater investment and said the emphasis from the Government on commercialisation may not fully resonate with researchers.
“A lot of scientists that I’ve met aren’t motivated by personal return. They are motivated by more altruistic reasons but making sure they have an ongoing stake and whatever comes out of their research I think is a potentially positive thing.”
Luxon’s speech comes after he began the political year with a reshuffle to create a “refreshed team” focused on economic growth.
That included appointing Finance Minister Nicola Willis to the new portfolio of Economic Growth Minister.
Labour’s finance spokesperson Barbara Edmonds, speaking at the caucus retreat, said the renewed focus on economic growth was an admission the Government didn’t do enough last year.
“It has taken them a while to get to that point, to understand that that is the actual issue for us. When I talk about economic growth and productivity, it is around jobs. We have seen higher unemployment ... we are seeing a deeper recession than it needs to be,” she said.
“They took their eye off the ball. They should have known productivity was the issue they needed to look at.”
Edmonds said she had been focused on economic growth since taking on the finance portfolio nearly a year ago.
Unemployment was recorded at 4.8% in the September 2024 quarter. According to Treasury’s forecasts in the Half-Year Economic and Fiscal Update (Hyefu) released in December, it is expected to peak at 5.4% in June this year before declining.
The Hyefu also put into picture the slow rate of growth expected in the coming years, with Real GDP growth expected at just 0.5% in the year to June, rising to 3.3% in 2027 and then falling again.
In the September quarter, GDP fell 1%, following a 1.1% drop in the June quarter. Those two quarters of negative growth put New Zealand into a technical recession.
The Government has argued it has had its eye on economic growth, pointing to moves such as fast-track legislation to streamline large infrastructure projects and regulatory reforms.
“I am very proud of what we did last year,” Luxon said on Wednesday.
“We made some very significant structural reform last year around fast-track, around getting rid of red tape, freeing up our farmers, putting in place the basics on education, making sure we gave people tax relief, inflation relief, interest-rate relief.”
Inflation data released on Wednesday showed it steady at 2.2%. However, the biggest contributor, rent, was up 4.2%.
Luxon also suggested the Government may make further reforms to improve competition, potentially in sectors like banking and energy. Luxon pointed to the increase in energy costs during last year’s winter and said that shouldn’t happen with “abundant natural resources” in New Zealand.
Willis has made comments this week about the need to boost tourism numbers and the Government’s role in making it easier for tourists to come to New Zealand.
“I am thinking about this portfolio in terms of what are the actions the Government can take in the short term, the medium term, and the long term, to make this a wealthier economy,” Willis said on Wednesday.
“In the short term, that’s things like working alongside industry to drive up tourism numbers ... It’s about things like international education and how we can get our settings right there.”
She said in the medium term, the reform agenda included improving skills, reducing regulation, driving overseas trade, and bringing in more foreign investment.
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.