On January 23rd, 2025, Prime Minister Christopher Luxon delivered a compelling State of the Nation address, emphasizing his administration’s commitment to revitalizing New Zealand’s economy amid significant challenges. In a speech that underscored both optimism and determination, Luxon outlined key priorities and initiatives designed to foster growth, enhance public services, and attract foreign investment.
Economic Recovery and Growth
Luxon began by acknowledging the formidable economic hurdles New Zealand faces, including high inflation and interest rates, which have resulted in the most severe recession since 1991. Nevertheless, he pointed out promising developments, such as wages growing faster than inflation and a deceleration in food price increases. The Prime Minister stressed that stimulating economic growth remains the government’s top priority.
Addressing the Cost of Living
In response to the rising cost of living, Luxon detailed measures aimed at providing financial relief to New Zealanders. He highlighted the government’s responsible economic management and tax relief initiatives, which have collectively led to tangible savings for families, particularly those with mortgages.
Encouraging Foreign Investment
A significant portion of Luxon’s address focused on the establishment of Invest New Zealand, a new agency dedicated to attracting foreign investment. Luxon emphasized the critical need for international capital to drive growth in essential sectors, including banking, fintech, infrastructure, manufacturing, and innovation.
Enhancing Public Services
Beyond economic concerns, the Prime Minister addressed improvements in public services. He announced record investments in healthcare, promising greater access to new cancer treatments. Additionally, Luxon introduced a fresh approach to enhancing literacy and numeracy, underscoring the government’s commitment to education reform.
Infrastructure Development
Highlighting the importance of infrastructure for sustained growth, Luxon unveiled plans for significant projects, such as a roading package for Queenstown and city regional deals designed to accelerate regional development. These initiatives are expected to bolster New Zealand’s infrastructure and support economic expansion.
Cultural and Institutional Reforms
Luxon candidly criticized what he described as a “culture of saying no,” which he believes has hindered economic progress. He called for a more positive and proactive mindset toward development issues, including port expansion and concert limitations at Eden Park. Furthermore, Luxon announced major reforms to Crown Research Institutes, introducing four new Public Research Organisations focused on the bio-economy, earth sciences, health and forensic sciences, and AI and advanced technologies.