Christopher Luxon has delivered his first State of the Nation speech as Prime Minister on Sunday morning, saying while "the state of the nation is fragile", it is the "strength and calibre" of Kiwis that makes him optimistic for the future.

He says the speech is an opportunity to not just talk about what he wants to do, but about what the Government is doing right now “to get New Zealand Back on Track”.

“One of the best parts of being Prime Minister is getting around the country meeting people and hearing their stories,” says Luxon.

“People like the farmers I met in Gore, who are working incredibly hard, but are frustrated at regulations slowing them down. The teachers I met in Auckland, who are laser focused on delivering the best possible education for our kids.

“The folk I met in Hawkes Bay, who have been helping with the rebuild after being hit by Cyclone Gabrielle 12 months ago. The family I met in Northland battling through to pay day, and really struggling to keep up with the cost of food, petrol, and all the basics.

He extols Kiwis for being resourceful and savvy, working hard and playing harder. 

“New Zealand is the best country on Planet Earth. We’re a country with a glint in our eye and fire in our soul. We reach for the stars even while we stay close to our roots.

“We climbed Everest. We split the atom. We charted waka across the ocean to come here, and we’re blasting off to space to compete with the best in the world.

“We’re also big enough and smart enough to face reality when we need to.”

He then went on to deliver the crunch.

“Not everyone will like it, but I think Kiwis need a Prime Minister that levels with them, and is straight up about the state of the nation and where we’re at.”

Amanda Luxon watches as her husband, Prime Minister Christopher Luxon, gives the State of the Nation speech. Photo: RNZ / Marika Khabazi.

The Prime Minister says the last few years have been too tough, for too many Kiwis.

“We’ve lurched from challenge to crisis – a global pandemic, conflict overseas and natural disasters.”

He says those external crises “have masked a more fundamental challenge”.

“Kiwis are a resilient bunch. But the last government treated us like a country that had lost its mojo. And because of that, we did. We were badly let down by a broken and distracted government.

“It tied down our economy with unnecessary regulation, and saw farmers and businesses as something to be sneered at rather than celebrated.

“It delivered schools where kids learn less than their parents – if they turn up to school at all.

“Hospitals that take longer to see patients, and then longer to treat them for serious illnesses, like cancer and heart disease.

“A justice system which had a deliberate strategy to empty New Zealand’s prisons, even as violent crime soared.

“And an economy, where inflation crushed wages, even as Kiwis are left paying more and more tax to fund Labour’s wasteful spending.

“So, I have to level with you New Zealand and say - the state of the nation is fragile.”

Luxon then delivered an update on education, health, welfare, the economy, transport and inflation.

Education

“In education, our levels of achievement and attendance are no longer world class.  Since 2000 our 15 year olds have slipped from fourth in the developed world for maths to 19th. 

“Where 79 per cent of students in the UK attend school regularly – the equivalent rate of attendance in New Zealand is just 46 per cent. That’s a year of education lost by the time they’re 15 – and that’s not fair to them or their futures. Well, I’m telling you, we’re going to fix that.”

Health

“In health, our hospitals are no longer delivering the standard of care New Zealanders could once rely on.

“Just a few years ago, 250 people were waiting more than 12 months to receive a first specialist appointment, now there’s more than 4,000.  One in three of us now wait longer than six hours to be seen in emergency departments.

“And in last year’s Budget, Labour had even planned for hundreds of millions of dollars in Pharmac’s budget to expire later this year – putting medicines Kiwis rely on at risk.  You know what, we’re going to fix that too.

Welfare

“There are 70,000 more people on a Jobseeker unemployment benefit today than there were in 2017. That’s like adding every man, woman and child in Napier onto the Jobseeker benefit in just six years.

“Even more catastrophic is that if you do go onto a benefit, you’ll stay there for longer.

“MSD have told us that for the 2,000 young people receiving a youth payment or young parent payment, they are now expected to spend an average of 24 years of their working life on a benefit.

“24 years. Up almost 50 per cent in just three years.  Well, that’s got to change. We’ll do everything we can to help people into work, but if they don’t play ball the free ride is over.”

Transport

“Late last year we learned of a financial pile-up in transport.

“Funding shortfalls for transport projects like light rail in Auckland and Wellington led the Ministry of Transport to estimate there was a more than $200 billion gap between the previous government’s overall transport promises and the funding it had set aside.

“They were $200 billion short. If you saved $20,000 every hour, day and night, seven days a week, it would take you over 1,000 years to save that $200 billion. 

“A great example is the huge cost-blow outs in the ferry project. So, we canned it because we’re not going to put up with financial mismanagement.”

Economy

“I know how hard you work to pay your taxes – and under my government the culture of treating taxpayers like an ATM is over.  

“For the economy, the conditions are rough. And Kiwis are feeling it – working harder and harder, just to fall further behind. Too much wasteful government spending, high inflation, high interest rates, an economy in recession, and rising unemployment.”

Luxon says inflation has stayed high and the cost of living crisis isn’t over yet, with inflation here higher than Australia, the UK, the US, Canada, Japan and the EU.

“Interest rates are at their highest level in more than a decade – and that’s putting more pressure on families around the country,” says Luxon.

“Government spending is up 84 per cent since 2017 – and debt has climbed from $5 billion to a staggering projection of well over $100 billion.

“In the Mini Budget last year [Minister of Finance] Nicola [Willis] delivered more than $7 billion of savings. There will be more where that came from, I can tell you – but it is a massive job to clean up the mess left by the previous government.”

Luxon says for example, since coming into government “we’ve uncovered a big financial mess at Kainga Ora”.

“Advice from Treasury was that Kainga Ora’s forecasts relied on the sale of 10,200 homes in the coming years just to balance its books, even while Kainga Ora’s debt is set to rise to $29 billion.

“That’s just one of the nasty surprises we’ve discovered since coming into government – and I’m sure there will be more.”

He says the long-term performance of the New Zealand economy is also a major problem.

“New Zealand’s economy is now less productive than vast swathes of the former Eastern Bloc, including Poland, Slovenia, Slovakia, and Lithuania,” says Luxon. 

“The median full-time worker in Australia now earns $20,000 more a year than someone in New Zealand.

“It’s no surprise therefore, that Kiwis have been voting with their feet. Last year a record net 44,500 New Zealanders left the country.  It is only through a strong economy that we can end the cost of living crisis, lift incomes and give those Kiwis a reason to stay in New Zealand.”

He acknowledges that it’s not going to be easy to fix and resolve the challenges being faced.

“I know we can do it. I know we have what it takes.  We’re brimming with potential: right in the middle of the Asia-Pacific, a liberal democracy with well-established institutions, and a vibrant multi-cultural nation built on strong bi-cultural foundations.

“We’re fair minded – but competitive. We’re resilient – but adaptable.  And given the opportunity – we never fail to grasp it with both hands.

“But we need a new approach to turn this around.  We need to get our mojo back.”

He says New Zealand needs to celebrate ambition and aspiration – and back ourselves to take on the best in the world.

“There’s so much, so much more that unites us than what divides us,” says Luxon.

“However, you got here, whenever you arrived, and wherever you’re going – we all want to leave our kids, our grandkids, and our community with more hope, more opportunity, and more confidence in the future of this great country we call home.

“Kids born this year will be turning 16 in 2040. When I wake up in the morning I’m thinking about the country we create for them to live in.  But we can’t wait 16 years. We need to make life better in 16 months. In 16 weeks.”

He says from the moment of waking each day he is “ruthlessly focused” on rebuilding the economy, restoring law and order, and delivering better schools and hospitals.

“And across all of that, I’m obsessed with getting stuff done. Fast. And so that’s what we’ve been doing.”

He says in the first 81 days, the coalition government has achieved or delivered the following:

• We’ve abolished the Ute Tax, to finally deliver farmers and tradies relief after years of disrespect.
• We’ve started cancelling the blanket speed limit reductions that are slowing Kiwis down.

• We’ve stopped Auckland Light Rail, which after six years, cost taxpayers more than $200 million and didn’t deliver a single metre of track. 

• We’re repealing the Auckland Regional Fuel Tax – gone on the 1st of July.
• We’ve cancelled the planned hikes to fuel tax which would have taken motorists further backwards. 

• We cancelled Let’s Get Wellington Moving because frankly it wasn’t moving.  

• We’ve abolished Fair Pay Agreements and brought back 90 day trials – giving businesses the confidence to hire someone who needs a fresh start instead of letting so many Kiwis spend their life on a benefit. 

• We’ve returned the Reserve Bank to a single focus on price stability, after years of rampant inflation and hopeless economic management.  

• We’ve delivered more than $7 billion in savings, so we can deliver Kiwis tax relief they desperately deserve – not more wasteful spending.  

• We’ve repealed Labour’s broken RMA reforms that made it harder and more expensive to build anything, just at a time that we need to get our economy moving again.   

• We’ve banned cellphones in schools – and we can already see the impact that’s having to keep kids focused and reduce online bullying. 

• We’ve made sure every kid in every school gets an hour a day of reading, an hour of writing and an hour of maths – and appointed an expert group to redesign the maths and english curriculum by the end of the year so we can teach the basics brilliantly.   

• We’ve begun disestablishing Te Pukenga – after the last government spent hundreds of millions of dollars even while staff morale collapsed and regional needs suffered.  

• We commissioned an independent review into the woeful state of Kainga Ora led by Sir Bill English – and judging by the news this morning over their forecasts you can see exactly why we were so alarmed.  

• We’ve progressed work on a third medical school with Waikato University, because we need more home-grown doctors. 

• We’ve taken the first steps to extend free breast cancer screening up to age 74. 

• Soon we’ll introduce legislation to disestablish the Māori Health Authority – because we want to see better results for Māori, not more bureaucracy. 

• We deployed 200 additional security personnel which has reduced violent incidents in hospital emergency departments, keeping staff and patients safe.  

• We’re bringing in tough new laws going after gangs and illegal firearms. And if you’re in a gang, I’m telling you, we’re coming after you. 

• We’re ending taxpayer funding for cultural reports, which became a cottage industry to reduce criminals’ sentences, even as victims didn’t get the support they needed.  

• We’ve abolished Labour’s prisoner reduction target – because after six years of a government that let violent crime soar even while they deliberately emptied New Zealand’s prisons, Kiwis knew we needed a change.
• And just this week, we repealed Labour’s undemocratic and unaccountable Three Waters reforms. Our government will restore local control of water after Labour tried so hard to take it away.

“We are a government of action. There’s always more to do – and we’ll keep working hard – laser focused on rebuilding the economy, restoring law and order, and delivering better public services,” says Luxon.

“We’re under no illusions about the scale of the challenge we face as a country. These problems will not be fixed in one hundred days – or a hundred days after that.

“In my former life, it’s what I would have called a big turnaround job. On the campaign trail, it’s what we all just called getting New Zealand Back On Track.

“And I want to be up front with you: achieving that will be difficult. It will mean making tough choices.”

He’s not apologising for what he says is “tough love” around supporting people off welfare and into work.

“I haven’t met a single young Kiwi whose ambition, creativity, and spark would be best served by a life on a benefit.  All Kiwis, of course, have a right to support when times are tough. But with that right also comes responsibility. The responsibility to look for a job, or to train for new opportunities.

“And if you don’t – make no mistake – there will be consequences. Our government will support you – but there will be sanctions if you don’t take that support seriously.”

He says they will also make tough choices in infrastructure and planning.

“Ask anyone and they’ll tell you New Zealand has a massive infrastructure deficit. Economists will tell you it’s worth hundreds of billions of dollars – but most of us just see it in the roads we drive on that need improving and the pipes spewing water onto the street.”

He says funding and financing is a major barrier, and will have more to say later this year on the government’s plans to fix that.

But he says planning and resource consents are also a major barrier. 

“Just getting permission to build a new road or a windfarm can take years – even while Kiwis are stuck in traffic or trudging slowly towards Net Zero 2050,” says Luxon.

“It’s simply got to stop. New Zealand has become an obstruction economy – where doing anything or building anything means mountains of paperwork and years of dithering and delay.

“Yes, we need to strike the right balance between protecting the environment and building for the future. But right now, our economy is stuck in reverse.

“While other countries charge ahead with big investments in modern infrastructure to beat climate change and grow their economies, New Zealand is going backwards. 

He says the government is designing a new fast-track consenting process and planning big changes to the RMA, so major projects can get consented faster and construction can begin sooner.

“That won’t be popular with everyone – I get it,” says Luxon.

“For many, the status quo is acceptable – the steady climb in housing costs, the hours stuck in traffic, and the slow erosion of jobs and opportunity here at home.

“But I refuse to let New Zealand get stuck in the slow lane.”

He says the Government wants more roads, more windfarms, more homes, more solar, more geothermal, more commerce, and more opportunity for New Zealanders to get building and get ahead under their own steam.

“We’re also going to make some tough choices to get government spending back under control – because the current trajectory isn’t sustainable,” says Luxon.

“It just isn’t credible for government to remain so large and yet deliver so little. We need to get the public finances back in order.

“That means a return to the orthodoxy of tight budgets, careful stewardship of public money, and a determined focus to keep or return the books to surplus.”

Luxon says strong public finances aren’t enough to deliver a strong economy in their own right – but they are a critical pre-requisite.

“We can’t build infrastructure if we can’t be trusted to borrow money. Businesses can’t attract investment if there’s no confidence in the value of our currency.

“And should disaster strike, we will need the financial freedom that low debt and healthy surpluses provide to fund the necessary rebuild.”

He says while it won’t be popular with everyone,  it is necessary.

“More spending, more borrowing, and more taxes isn’t a pathway to prosperity, it’s a recipe for more of what we’ve seen from the last few years. Rampant inflation, higher interest rates, and an economy going nowhere fast.”

At the end of his speech he repeated “the state of the nation is fragile”.

“New Zealand has been stuck in a cycle of public services under strain, a government distracted from the basics, and an economy stuck in reverse.

“But our job is to restore the spirit and the promise of New Zealand, that if you work hard – come what may – you can get ahead.”

“My government will not shy away from making those difficult choices we all know are necessary to deliver the future New Zealanders deserve. We will not leave our future to chance. We will not sit by and wait for miracles to happen.”

Leaving the Kiwi ‘she’ll be right, mate’ approach in the dust, he is adamant that carving out tough choices isn’t cause for pessimism, but in fact, the opposite.

“I am committed to delivering the change New Zealanders voted for because I am so confident this country can be so, so much better than we are right now.

“What gives me that confidence?  It’s you.  It’s the strength and the calibre of the New Zealand people. 

“This country is jam packed with ambition and empathy. Extraordinary people who keep the gears of their community moving through the power of their individual contributions.  Running the footy club. Volunteering at the food bank. Trapping pests.  

“It’s that sense of responsibility and purpose in every community around the country that gives me optimism for the future.

“Our government will bring that same sense of responsibility and purpose to governing. Above all, we will deliver the change New Zealanders voted for and the change they were promised.”