Luxon signals immigration policy, more capital spending in Budget | RNZ

Well, can I wait to meet you? Kia ora? Good afternoon, everyone. Can I just say thank you again for the opportunity to come and talk with you today. Can I say first up thank you so much for what you do as business leaders. I know it's an incredibly difficult and challenging time to be leading at this moment, but I also want to say thank you very much for the engagement that we've had as government and industry working together, rather than us doing it to you, as the way we've wanted to work with you with respect to the way we're building our response to the fuel crisis that we've been working with many of you in this room, and we really do appreciate everything that you're doing with us. Can I just acknowledge you Tracy and say thank you for coming with me on so many delegations over the last two years as well. And to Karen from Salesforce, thank you for sponsoring the event and the contributions that you make also to government in particular. Before I begin, can I just acknowledge Business New Zealand CEO Catherine Rich. She can't be with us today. She's struggling with COVID, but I just want to acknowledge Catherine and also Business New Zealand's leadership in general and just say thank you. Thank you for your support on the Indian FTA that was so critical to helping us finalize the FTA and bring it into life. And so on behalf of all Kiwi exporters large and small, thank you. Thank you. Thank you. Well, look, today has been officially billed as a pre-budget speech and I'll touch on the budget and our priorities this year a little later on. But certainly in a more volatile world and off the back of the recent trip to Singapore, I'd really like to take the opportunity to speak to you today on a bigger, broader topic, both in my capacity as Prime Minister and also as National Party leader. And I'd like to speak to you today about where New Zealand stands in the world, a volatile world, a world that's changing very quickly and becoming less predictable, and how we need to adapt and respond and secure our own country's future. The Indo-Pacific region is the most economically dynamic region on Earth. It will generate two-thirds of global economic growth over the coming years. By 2030, two-thirds of the world's middle class will be living in our region. But there's actually another side to this. Something important has changed in how global power works, and we need to be really honest about what we see. And put quite simply, our world is facing three big challenges. First, we're moving from a world ordered by rules to one ordered by power. Countries are shifting from working together under international law to more transactional relationships without shared rules. And in this setting, stronger nations do as they please, and smaller countries have to adjust. Second, international relations are moving from an economic focus to one dominated by security concerns. Competition now means cyber attacks, disinformation, supply chain coercion, and gray zone operations are primary tools of statecraft. And thirdly, we're moving away from a world that valued efficiency, like lean supply chains and borderless capital, to one that now puts national resilience first. And I think the examples are obvious to us all. The United States, which supported the global order for 80 years, is now focusing more exclusively on its own view of its own interests, America first. Russia has made its brutal intentions clear in Europe, reminding the continent that territorial conquest is not a relic of history. And China is assertively expanding its influence across the Indo-Pacific and beyond. A world where hard national interests are being pursued by hard national power. An unsentimental world, a world where many of the rules that have helped keep us safe and prosperous are contested and sometimes ignored. And a world where centers of power are ever more distributed and where countries in the global south and Africa and Latin America, Southeast Asia, and our own Pacific neighborhood are also no longer willing to remain passive in a system that they didn't help design. And their desire for a greater say in global affairs is justified. So, this is the world that New Zealand must now navigate. Not with fear, but actually with clear eyes and a willingness to make different choices than in the past. We are living through an inflection point in history. And for now, a new multipolar international system appears to be emerging, although the outcome is yet fully determined. And as a small nation without the means to assert ourselves diplomatically or economically, New Zealand has benefited hugely from a system of rules that has been built up through the multilateral system. We've helped build it. In fact, we have a long record of continuing to invest in its development. Our values, our trade, our security, all depend on that multilateral foundation. And so, alongside our friends and partners, we must keep working to protect it and also to remake it. When you turn on the news at night and you see the alliances straining, you see trade wars flaring, you see rules being rewritten by the powerful, it's only natural to feel as though the ground is shifting beneath you. It can seem to all of us as though the world that we knew and our parents knew is becoming unfamiliar, harder to interpret, and beyond our control. And I hear those concerns and feel them, too. And I want to be honest with you about this instead of just giving some empty reassurances. But let me also stress this because we have faced similar challenges before and we have overcome them. I just want you to consider for a moment the New Zealanders who have come before us. Think about the generation that lived through the First World War. They witnessed a world that they believed to be civilized fall into absolute chaos. Empires collapsed, 10 million people died, and the old certainties about order, progress, and the nature of Europe were shattered on the Western Front. Young men from this country, including my great-grandfather, left small towns and farms to cross oceans and fight in a conflict that they must have felt beyond their comprehension and control. And then they returned home and they rebuilt. And yet less than 20 years later they faced another global conflict in the Second World War. They confronted fascism, a disciplined and well-resourced movement that conquered much of Europe and appeared in 1940 to be winning. And the outcome was not inevitable. It was not guaranteed. People were frightened and they were right to be frightened. They're called the greatest generation for a very good reason because many of them were children of the depression. They had already experienced hunger, loss, and hardship, and then as the world began to recover, they were called upon to do the hardest thing imaginable. They answered that call. They went to Europe and the Pacific. And those at home rationed and sacrificed and waited, often not knowing whether the letters would stop coming. But what made them great wasn't that they had no fear. It was that they understood deep down that freedom to live well, to raise your children in peace, to speak your mind, to choose your leaders doesn't just last on its own. Someone has to stand up for it and their generation did. But they didn't just win a war, they built the peace that followed afterwards. They built the hospitals and the schools here at home in New Zealand and they created the international institutions designed to make sure it would never happen again. The very rules-based order we're now working to preserve, well, they built it. And they were in short, not only warriors, but they were architects of a world that was for all of its imperfections, more just, more prosperous, and more peaceful than anything that had come before. And then came the Cold War, 40 years of living with the threat of nuclear annihilation. And yet science advanced, democracy spread, and human rights improved. And in 1989, the wall came down, not because of war, but because of powerful ideas and the courage of ordinary people who refused to keep living a lie. Now, we are inheritors of what they built. And the question is whether we prove worthy of that inheritance. But history teaches us. It teaches us that the world has always had its inflection points. And those moments are always the most unsettling. That's when the dictators seek to dominate. That's when fear replaces reason. And it's when the urge to turn inwards is most strong. But they are also the moments that reveal character. The moments that actually determine what kind of world comes next. And so I say to you, I remain relentlessly optimistic. Despite the pressures of our age, we live in a time of extraordinary human capability. In just one generation, over a billion people have been lifted out of extreme poverty. Child mortality rates that would have seemed impossible to all of our grandparents are now normal in much of the world. More people are educated and more women are involved in public life. The tools available to address our greatest challenges, such as clean energy and medical science and digital connectivity and agricultural technology, are more powerful than ever before. And so the Indo-Pacific is not just a region of risk, but it's also one full of great opportunity. And innovation and enterprise can be found from Auckland to Ahmedabad, from Tokyo to Timaru. And we see it across our whole region. In that context, small countries have often done well during times of change when they are coherent, when they are trusted, and when they stand for values and interests that are important to them. And New Zealand has its own version of that story. At our very best, we have always positioned ourselves on the right side of history. That's exactly who we are. So, yes, the world is unsettled. The order that we've depended upon is under real pressure. And there are forces in global politics that none of us can fully control. But here's what we can control. How prepared we are, how resilient we are, and how well we stick together. We can't control the storm, but we can secure our future within it. And that's exactly what I want to talk to you about today. So, in a more volatile and uncertain world, we've got to focus on controlling what we can control. And that starts right here at home. Because for too long, we have assumed that our location protects us, that an ocean and a quiet reputation are enough. I can tell you they aren't. Geography gives us time, but it doesn't give us immunity. We've assumed our international relationships would carry us. And they matter enormously, but we must invest in them. They're not unconditional, and they are sustained by contribution. Partners support those who show they're willing to help themselves. We've also assumed large investments in renewable energy would insulate ourselves from energy shocks offshore. We've assumed that our economy would always bounce back. But as I've said before, New Zealand needs to get its finances in order for long-term growth. An economy that can't support itself in a crisis is a major risk both strategically and financially. And maybe most importantly, we have assumed our social cohesion as a given. That New Zealanders will always stick together when times are tough. But history shows us that's not always true. Social trust isn't inherited, it needs to be built, and it needs to be cared for and looked after. These issues aren't just academic as I'm talking to you about them. They're actually really important issues that matter to Kiwis. Secure and affordable energy matters just as much for manufacturers here in Auckland as it does for moms and dads battling to keep up with the cost of living. Secure access to global markets matters just as much at the milking shed as it does for cutting-edge companies like Halter and Rocket Lab competing on the global stage for capital and talent. And financial security matters just as much for Kiwis meeting the cost of a mortgage and planning for retirement as it does for governments worldwide grappling with the cost of borrowing. The bottom line quite simply is we can't have prosperity, more jobs, more exports and higher wages without having greater national security. And in 2026, risks to our energy security, our financial security, our international security and our social cohesion each threaten our future as a wealthy, inclusive and diverse trading nation in the South Pacific. And so each issue demands a coherent response anchored in an overall objective of strengthening our collective national security for a more volatile and uncertain world. And so today I'd like to provide some guidance on my party's direction of travel on some components of that national security before speaking briefly about our priorities in this year's upcoming budget. So let's talk first about international security and our presence offshore. As I spoke about earlier, flagrant violations of national sovereignty such as we've seen with Russia's illegal invasion of Ukraine and heightened great power competition in the Indo-Pacific have each contributed to a more volatile and uncertain world. And as a small trading nation, we're disproportionately exposed. We have a strong voice but in an era increasingly dictated by hard power, our choices are limited. Enhanced investment in our own defense capability is critical, allowing us to support both our own national security and also the wider resilience across the Indo-Pacific region. In an era where trade and security are increasingly interrelated, investment in our defense capability also represents an investment in our economic security and our prosperity. And so, if reelected, National remains committed to continuing to implement our defense capability plan. That is to double our defense expenditure as a share of the economy and to prioritize interoperability of our defense forces with our only ally, Australia. But, for a small country like New Zealand, our security depends as much on the system of rules, relationships, and institutions that have developed over decades as it does the size and the capability of our defense force. And that's why in this term of government, diversification of both trade and defense relationships, particularly in the Indo-Pacific, has been an urgent priority. Upgrades in our relationships with India and Singapore, closer cooperation with NATO's IP4 and ASEAN, and our role in the Pacific Island Forum are each critical steps against a volatile international backdrop. And so, we will continue to develop the lattice work of interlocking relationships, bilateral, regional, global, that together provide depth and resilience for New Zealand. In a more volatile world, some of our traditional friends and partners seem to be doing the same. Forging new partnerships shaped by many of the values that we hold dear and their own support for the international rules-based system. The multilateral values and institutions that have underpinned our prosperity may be under strain, but they haven't yet perished and we have to evolve and remake them. And New Zealand with others must continue that mission in the months and the years to come. So, for example, we will continue the work that we started last year to strengthen the dialogue between the EU and CPTPP trade ministers to reinforce the rules of international trade. And as Lawrence Wong and I discussed last week, where high standards can be met and New Zealand's interests are served, we will explore expanded signed arrangements between New Zealand and Singapore on trade and essential supplies with other countries potentially. Secondly, I want to talk about energy independence in the context of our national security. Because New Zealand's energy vulnerability is no longer a theoretical risk. It's a live crisis on full display in the Strait of Hormuz every single day. And every week I get the great privilege of speaking to farmers and growers and manufacturers and truck drivers and tradies who have seen their lives and their businesses affected by events half a world away. And it's not just the rough and tumble impact of globalization. Because on too many occasions, private capital, eager to bolster domestic energy production, has been pushed to the sidelines by overzealous planners and politicians in recent years. Several high-profile projects are now getting underway thanks to our reforms like fast-track, which I expect will continue to grow in popularity by leaps and bounds. But the reality is that when faced with an energy shock after energy shock, it's very hard to justify backing the skink over the solar farm. And so other regulatory handbrakes, like the ban on oil and gas exploration, have been more permanently chilling. And as a government, we're going to continue to pursue strategic energy reserves and options like LNG, like the strategic coal reserve at Huntly, and the recent procurement of 90 million liters of diesel to be stored at Marsden Point. And yes, each of those options are costly, but less costly than the alternative of regular, but ultimately unpredictable shortages. And so more action is required. Energy independence must be treated as an immediate national security interest instead of a contributing factor to a long-term climate strategy. We will never compete on the global technological frontier in an AI world without abundant affordable energy. And the manufacturers I've spoken to here in Auckland, they are right. The government does need to have a role in acting deliberately and forcefully to achieving that outcome. Third thing I want to talk about in the context of national security is social cohesion. Because ultimately our greatest strategic asset is the trust that New Zealanders have in each other and in our institutions. Disinformation exploits division. And adversaries will always probe our social fault lines looking for leverage. But recent years have brought new pressures. During COVID, ministers given extraordinary powers by the parliament too often prioritized their own political interests over the interests of the public and honest and open government. The media, determined to flatten New Zealand's relative performance, also failed, accelerating a long decline in public trust and confidence. And since then, failed immigration policies in Europe and North America have also stoked the politics of division online. And despite prudent policies and the natural advantages of geography, immigration now seems to be an emerging political issue in New Zealand, too. Holding our society together under all of those pressures will be challenging. But as the MP for Botany, I represent a part of New Zealand which is more diverse than most. Thousands of Chinese, Korean, Malaysian, and Indian Kiwis call Botany home. Kiwis who work hard, who volunteer, who serve their community, and make an immense contribution. They're the kids who play cricket with your sons and daughters, school teachers, business owners, doctors, and nurses, and Kiwis who frankly deserve better than being unfairly and unreasonably vilified. But that only works when we have a smart, targeted, and fair immigration system that serves New Zealand's interests. And it's worth acknowledging that at least some of the political fracturing evident in Europe in recent years reflects politicians refusing to implement the preference of their voters on immigration. Earlier this year, Erica Stanford spoke on many of the recent changes that we've made to strengthen our immigration system, designed to prioritize skilled, not unskilled workers and migrants through higher English language requirements, more enforcement, and tougher penalties. And the temporary work visas granted under the Indian FTA are anchored in that approach with visas available for specific occupations where we have workforce shortages. It's an issue we'll watch closely, and you should expect to see careful policy on immigration from Nationals as we get closer to the election. And my message to the business community is that the truth is that when it comes to immigration, when faced with a choice between social cohesion and stability and your bottom line, I'll choose the former every single time. And finally, let's talk about our financial security in the context of national security. Because the truth is that small countries which borrow money from offshore can only live on credit for so long. Eventually, the bill has to and must be paid. And with rating agencies and bond markets increasingly suspicious of Western governments' political courage to address long-term fiscal challenges and pressures, the bill is only likely to become more expensive in coming years. And too many countries, including New Zealand, spent the post-COVID period dining out on fiscal headroom accumulated by previous generations of political leadership. In recent years, our government has run tight budgets in a deliberate effort to chart a path back to surplus. Crises offshore have certainly made that path much harder, but we must stay the course because our status as a high-income nation is not a historical certainty. Fiscal credibility is a precondition of our prosperity and therefore our national security. And this year's budget, we're going to continue prioritizing and maintaining that credibility. Budget 2026 is about securing New Zealand's future. Fiscal repair balanced with careful capital investment features heavily in that story. The good news is that with the budget now officially signed off, I can confirm a few details today. First, the government's fiscal strategy underpinning that approach and our commitment to achieving it remains unchanged. The government remains committed to putting debt on a downward path towards 40% of GDP and returning the books to surplus by 2028-2029. Achieving that will be a tall order, and it will require careful choices in the years to come. But responding to the current fuel crisis, a crisis of national resilience and economic security, through more spending just risks leaving New Zealand even more exposed in the years ahead. So in that spirit, I can confirm the Minister of Finance will once again keep new spending in the budget below the operating allowance previously set at the budget policy statement. This year I'm pleased to say that the net operating package in the budget will be $2.1 billion, or around $300 million smaller than the $2.4 billion allowance set in December despite the recent crisis. And that's achievable because while we continue to invest in essential services like health and education for the third year running, we've also been able to achieve significant savings across government. At the same time, while we continue to prioritize a return to surplus, the recent crisis has acted as a timely reminder that significant levels of capital investment are going to be required in the coming years to build out that national security, to build a more modern resilient infrastructure able to withstand an increasingly volatile world, to develop a defense force which is fighting fit and capable of keeping Kiwis safe and safeguarding our region from malign interference, and to invest in the schools and the hospitals that New Zealanders rely on to receive modern responsive public services. So in that spirit, this year's capital package will be larger than originally planned at a net $5.7 billion. It reflects a permanently higher rate of borrowing. We'll need to get the balance right in the years ahead as we rebuild our fiscal and financial buffers. Finally, promoting financial security isn't just about the government's financial position. The truth is, if we're really honest with ourselves, we don't save nearly enough. And we rely too much on money borrowed from overseas to support our lifestyles. And that must change. Government's role must shift from simply meeting the rapidly growing cost of New Zealand Superannuation, to which we remain very, very committed, to a stewardship role for New Zealanders' financial security, supporting greater levels of private savings and investment. In last year's budget, you saw us agree to lift KiwiSaver contributions from 3% to 4%. And we said in November last year if National's reelected, we intend to lift contributions further to 6% each for employers and employees. Some commentators have recently recommended a further set of changes to support the long-term health of the scheme, several of which have also been recommended in the past by the Retirement Commissioner. So, National is...

Considering all of those changes and we'll have more to say on our KiwiSaver policy soon. So, in closing, there's a quote attributed to Pericles that has stayed with me. And it's quite simply, he said, "Just because you do not take an interest in politics, doesn't mean that politics won't take an interest in you." And the same is true of the world order. We can choose not to pay attention to it, but it will not return the favor. We have what the world wants. We are a reliable and trusted partner. We have values worth defending and a future worth building. But none of that is guaranteed. It must be chosen, and it must be worked for. And yes, the world is at an inflection point. And the question is not whether New Zealand is affected, it is. The question is whether New Zealand is ready. So, today I'm asking you to help make us ready. Not through fear, but through the deep, quiet confidence of a nation that knows what it stands for, knows who it is, and knows what it is capable of achieving. Thank you very much for being here. Thank you for what you do. Appreciate you.

Yeah, look, I think if you back the truck up a little bit. You know, we've got as part of that national security, a big thing we have to do is secure financial security or economic security. A big component of that is savings and investment as I alluded to in my remarks. New Zealand has been a place that has done a very poor job. Within the OECD, we're probably in the bottom three of actually attracting foreign direct investment into our country. And so, we are thin in a capital market sense. And that has been a problem for 30 years under successive governments. And really what I'm asking us to do, we're all working incredibly hard in this country. We're some of the hardest working people on planet Earth. But actually over 30 years, we have failed to lift economic productivity, and that is the key thing that we need to do to make sure that we have economic security and ultimately national security. So, there's several things going on. You saw us last year have an international investor summit on infrastructure. $6.3 trillion of funds invested. 120 organizations in that room wanting to work to build out the infrastructure across New Zealand, and many of you in this room are involved in some of those conversations. And that has been going well. We've been receiving big investments of firms coming from overseas, sovereign wealth money in particular is what we've been chasing through creating Invest New Zealand, a pipeline of infrastructure projects. We want to collaborate with private capital so that we can get it built quicker, faster, and actually get the benefit out to our people. So, that's one level of the savings and investment attraction piece. The second piece is that there's a lot of high net worth individuals out there in the world that not just have capital, but also have know-how that we need to bring into this marketplace as well. So, we created over a year ago the Active Investor Visa Plus. The deal is pretty simple. You bring either $5 million or $10 million into the country. There's two schemes, and there's a pathway to residency. But the money doesn't get invested in a speculative asset like housing, which is what had happened in the past. It gets invested in a productive business or a startup fund or a number of different defined asset classes. The cool thing is that we have attracted almost $4 billion in 12 months from about 580 individuals. And I was down in Christchurch two weeks ago on a Friday night, and I went and visited a company called Zethos. And it's quite interesting to me. So, it's a professor of chemical engineering at Cambridge University who's partnered with one of his PhD students to form a company called Zethos, which recycles critical minerals and turns it into zinc. That was what they were doing on this particular plant. The two investors that had gotten behind them through startup funding were from Brazil and also from the Netherlands. And as a result, they brought their know-how and their knowledge to help these young guys set this business up. They now employ 20-something people and also are scaling up to go to a full production plant. But, they also brought the capital. And so, for us at the moment, 40% of the folk have come from the US. I think 20% were coming from Germany and from all over the world. But, it's not just about capital coming in. It's about being open to getting the knowledge and the know-how that we want transferred across because the combination of a Kiwi entrepreneur with some foreign capital and a foreign entrepreneur is pretty powerful when you see it in a startup world. And if I just think that's one of the things I'm proud about is that when I came home from New York, I used to go to Andreessen Horowitz or somewhere once a year and give them some days of time looking at startup opportunities in the US. And I came home and actually the literacy wasn't as good, but the entrepreneurship drive was just as high. And now you see our startups going from strength to strength. And many of you in this room have helped build that capability. We are as good as anybody in the world and we've got some great startup companies. And we're tuning people on to the enthusiasm of wanting to be an entrepreneur, which is really brilliant. So, that's pretty exciting.

Yeah, look, if I take the Indian FTA, I was in Whakatane 2 weeks ago and I was talking to a group of about 120 people and this lovely husband and wife team came up to me and they had put a gift in the Crown car just to say they wanted me to have a little gift of time together, but also to tell me that they were kiwifruit growers. And they were super excited about this Indian FTA because basically, we're going to have a fourfold increase in the tariff free quota and then a halving of the quota, I think, any point after that if we get up to that. So, we can sell four times more kiwifruit in here than we can today. So, that for them was saying there are jobs now in Whakatane and regional jobs where they're going to take on more workers, going to be able to pay them more income because of that opportunity that's created because of India. India is a country I've been going to since I was probably 22 and I've probably been there, I don't know, 40 times. And because my old company Unilever was one of the top 10 companies in India in its own right. And it's an incredible place. And when I first went there, people used to get paid in coins daily. They didn't have a job or an employment contract or employer. And as that country has moved from low income to middle income, there's now 440 million people living in the middle class in India. And by 2030, there'll be 750 million living a similar standard of life to the middle class here of New Zealand. So, when you see a country go from low income to middle income increasingly on a pathway to high income ultimately, that is a great growth opportunity for a country of 5 million people to do a deal with 1.4 billion people, the most populous country on Earth, what will soon be the third largest economy in the world. And so, to get in on that and to negotiate that, I was incredibly proud. In fact, it's one of the proudest legacies I think of our first term. And Todd McClay deserves tremendous credit, who worked with me on that one, alongside Prime Minister Modi and also Trade Minister Goyal. So, I want to say thank you to all of you in the room because you could see that we were, you know, the Indian FTA, if it was in any other 5 million people country, they would be celebrating on the streets saying, "What a fantastic opportunity." And the fact that we as a government and political leaders could do the deal, but the fact that you as the business leaders came out in support of all of that was so appreciated. Now, that led to us getting political bipartisan support. And as a result, this is not a political thing. It's not a Labor or National thing. This is a New Zealand thing, right? We should all be celebrating this because when we expand trade opportunities, whether it's been in Europe or the UK, the GCC, the UAE, or India, the other FTAs that we've been involved with, or the CPTPP, they're huge opportunities for this country and for more jobs, higher incomes, and more work for people.

Yeah, look, I'd say on health, you know, Sunny and I are pretty proud of the work that we've done there because essentially, it's a massive bureaucracy. And what had happened was 20 DHBs had got merged in health, 2 and a half thousand extra management have been put on top of it all. It wasn't what we'd call a proper merger and acquisition kind of strategy. It was actually just let's keep it all going with 20 different payroll systems and just chuck more bureaucrats on top of the whole system. So, it's a massive bureaucracy. In fact, it's one of the largest, most complex organizations health New Zealand in Australasia. What we've done is in the first budget, I think we found 16 billion dollars we put extra into the health budget. That has led to us being able to hire 2,100 extra nurses than what we had 2 and a half years ago. 600 more doctors than what we had 2 and a half years ago. And so, we've got money flowing in. You've seen us invest 604 million dollars in cancer drugs, huge investments in primary care up 13% 175 million dollars going into GP practices across the country. So, there's a lot of money going in. There's a lot of extra resources, the third medical school, doctors, nurses, all that good stuff. Then there's outcomes because we didn't feel that system was focused on outcomes and we said five which was faster emergency department wait times, faster first specialist appointments, elective surgeries, immunization rates and cancer treatments within 30 days. And that means that we want those 90,000 people across the broader health system, I think it is. Don't quote me but it's a big number of people focused on what their job is which is to improve outcomes for customers which are the public of New Zealand and to have a customer mindset. In fact, it's a broader point on the public service. I want the public service to be large service organizations that are technology enabled that are customer focused. They have a customer mindset that they're helping the people of New Zealand. So, we've put the money in, we've got the resources coming in, we've got the clarity on the targets and then in the middle, we've got to get an organization. It's an organizational challenge to get that money through the system and out to make a benefit. And we've had some good improvement on those five metrics already but there's a lot more for us to do.

Yeah, look. I mean, I think there's a bigger conversation as I said a few months ago to have there about, you know, the government owns a bunch of assets. You look at places like Singapore that recycle those set of assets that they own with a view of actually generating a better return for their people across the country. And so, you can ask some legitimately good questions about why does the government own X, Y, or Z that might generate a very low return when it could recycle that asset and actually end up investing in a new asset that could generate a 6, 7, 8% return rather than a 2% return for the people of New Zealand. I think there's a legitimate question to have about that. Again, I think, for us, the bigger point on infrastructure is that we've been running the country like it's 1975. I mean, honestly, we haven't evolved it sufficiently. Something's happened over the last 30 years. We've just kept incrementalizing the system to the point that consciously or unconsciously, we've created a huge amount of red tape and it's very, very difficult and very, very expensive to get things done in this country. And I think the other biggest legacy of this government is going to have the courage to take on and do the big reform on RMA, which actually is really challenging and difficult and tough and would be politically easy not to do, but we must do it because it's the single biggest thing that's holding New Zealand back. You know, why does it cost 50% more to build a three-bedroom standard house in New Zealand, just the build cost, compared to the same house being built in Queensland? And when you get into it, it's because our RMA resource consent and building consent times have doubled. The cost has doubled as 1.3 billion a year. And so, the new RMA we're building is designed so that we have 50% less consent so we can get on and get the show moving and get things getting done and built. We need to get infrastructure increasingly out of the political realm. You know, we need to have that's why we've worked hard with the Infrastructure Commission to build out a 30-year pipeline. We want more definition around that. That's why we've got a funding and financing company in place so that we can actually get the right financing mechanisms in place for the right infrastructure projects. Whether it's public-private partnerships, it won't suit every type of project, but there's different mechanisms. And then ultimately that's why we've got Invest New Zealand out there also making sure it's going out attracting that sovereign wealth money that needs to find a home. And why wouldn't you want to bring that money to New Zealand? We are a safe haven for investors in a world of chaos out there. So we've got a great pitch to make to bring that capital to New Zealand to be able to get the roads, the schools, the hospitals built that we need to get done. So, that's part of it. The other part that it's the companion piece to the RMA reform is you've got to disempower a branch of government. You can't have district councils, regional councils, central government, three arms. And so we made a decision last night November and Simon Watts is here and he's driving that. That will actually knock on the head the regional councils, which I think is important because that's just another bureaucratic layer that's been the way we may have done things in the past, but it's not set up for how we want to do things going forward in the future.

Hey, listen, thank you everybody for being here. Thank you for listening to the speech. We've actually got a plane to catch all four of us to get back down to Wellington, so I'll take a few quick questions, but I'll let you shoot.

Look, we'll detail all of that in the budget with the specific detail, but as you know, we've been working really assiduously to move money from the back office to the front-line services and that's been redirecting the money that we're spending and you know, some good examples. It's not always just about the quantity of money you're spending, it's about how you spend that money that matters and that's what we've been doing and it's doing so more efficiently. And so again, it's about relentless drive we have as I said daily practice, make sure every taxpayer dollar is being spent more that we're getting more from it and that's what we've been focused on.

Well, we made that expectation crystal clear from day one. Yeah, no, but it's just the way we roll, which is every day I expect, as I would in any other enterprise across New Zealand, that actually every dollar is being deployed optimally. I mean, a good example for us is that, you know, an average cost of a classroom in New Zealand is 1.2 million dollars when we came to power. We've made those buildings standardized increasingly and we've actually halved the cost. Now we can do twice as many classrooms out there in New Zealand by being smarter and being better managers of that money. So it's not just the quantum of money, it's what you do with it and how you deploy it that's important. Rebecca?

I haven't seen the new numbers. What I just reassure New Zealanders about because there's been a lot of conversations about Kiwis leaving, but in the last 12 months, we've had an 18% growth in Kiwis coming home. The month of February was less Kiwis leaving than we've seen nothing since 2022. But you know, again, what the way that immigration works in New Zealand is that it's got to be linked to our economic strategy and our infrastructure capacity.

Well, as we've been saying over the last 12 months, they are saying that I might go to Australia. I find out that house prices are really expensive. Yes, I have to go pay a stamp duty. Yes, I'm living in an economy with higher level of inflation, often a lot more competition for jobs. It's not quite as good as what they thought they were. So, you know, they are choosing to come home on their own volition because they see we're building a better economy.

Well, that's not something we've considered at this point in time. Our job fundamentally is to build an economy where people feel they can work hard and get ahead. They are safe and most importantly got good health and education.

Well, again, we'll talk about all of that in the budget. But as I said very clearly, we're re-committed to being in a surplus in 2028-2029. We're making sure that we get debt under 40% of GDP and those are non-negotiables for us.

What I was talking about was, you know, one of the four components of how we build better national security for New Zealand as a collective is social cohesion. When you look at what are the drivers around the world, around what's driving lower levels of social cohesion and trust in institutions, a lot of it's coming back from, you know, immigration, globalization, technology disruption, pandemics, obviously dealing with inflation and recessions. And that's been driving a whole bunch of angst all around the world. In the context of immigration, the point I was trying to make, very, you know, is that we are a country that should be very proud of our immigrant community. But equally, the reason it works in New Zealand, unlike it does in other countries, is because we have a smart, targeted refugee system and we must always make sure that we're doing exactly that. So, I've heard the comments from political parties. We don't have mass illegal immigration in this country. It's not like Farage and you know, railing against in the UK or you know, Pauline Hanson in Australia or other countries that we're dealing with. We have legal migration, but we have also it requires a dynamic approach where you are constantly making sure those settings are optimized and are linked to our economic strategy.

Well, I've seen comments from different politicians over the course of recent months to say, yeah, yeah, they may well be and I've called them out for that because I don't think those are helpful comments. We saw an Indian FTA conversation get perverted into a conversation about, you know, a fear of mass migration to New Zealand. That is, you know, that is just factually incorrect and it's wrong. So, I wanted to correct the record and I don't think it's right. These are Kiwis who have left everything they know, chosen to come to this country, they're working incredibly hard, they send their kids to school, they don't go on welfare and they are fantastic Kiwis. And they've made a great contribution, but the system works where it doesn't in many other countries is because we have a very smart, targeted fair immigration system that we constantly dynamically adjust so that it's linked to our economic.

No, but I'll let Simeon Brown, who's the Minister of State, only to price to say a few hits on that one. No, what we've done is we've set letter of expectation, which is we want them to compete vigorously with the Australian counterparts to make sure we have a more competitive banking sector in New Zealand. We have the capital requirements that Reserve Bank has changed allows them to grow and we expect them to grow, we expect them to compete so we have more competitive banking here in New Zealand.

Well, look, we went through a process last year. What came from that process was actually the capital requirements that the Reserve Bank set no longer mean us having to continue with that process at this stage. What we're focusing we won't focusing KiwiBank on now is growing as quickly as they can, being a vigorous competitor in the market to make sure New Zealand has a more competitive banking setting particularly against the big four. That's what we want them to do.

No. Our expectation about being very clear with them we want them to grow. The capital requirements allow them to do that. We expect them to be competing against the big four so we have more competitive banking here in New Zealand. Ultimately that drives lower costs for New Zealand households and businesses.

Well, again we're not saying that. So, let's be clear. You just heard from the minister saying, you know, there was a capital raise proposal put together last year. There was a change from the Reserve Bank of New Zealand's capital rules for all banks across the country and as a determination KiwiBank said, "Hey, listen, that's giving us some freedom in a way that we can actually grow this business." The minister's doing the right thing by actually setting clear expectations that we expect performance from crown into this. And after six years of sort of being in stasis and not held and pushed to account, he's done a very good job of saying, "Hang on, we expect KiwiBank to grow. We want you to come on and challenge the Australian banks."

By divisive politics, can you assure that any coalition in class to this can be ruled out ahead of this budget? So, I'm really interested to make the point and I think if you take the thesis of my speech, it was acknowledging that where we sit in the world today, the world is changing around us. And my speech was about how in that context does New Zealand actually secure its own future. What I said to you is that we need to start at home. We need to control what we're doing at home, put more national security. Then it's full of sense that requires social cohesion requires fiscal financial stability, energy independence, and those are important components of what we've got to work on in the years ahead. This country has a fantastic future, but we've got to build a stronger homeland here in New Zealand, and that's what we're going to do.

Yes, so Rebecca, as I just said, we've had an 18% growth in Kiwis coming back from Australia in the last year.

They were there's been always a lot large diaspora in Australia, but isn't it fantastic? Isn't it great? And we should be celebrating the fact that we've had an 18% growth in Kiwis coming home, and we've had less New Zealanders leave in the last month of February than what we've seen since 2022.

Oh, absolutely, but that's part of what we're doing. We are rebuilding the economy, so if you work hard, you can get ahead, and making sure that it's safe, and making sure that we can actually have good access to health and education.

I disagree completely, and I just would refer you to my Waitangi Day speech where I talked about the importance of the treaty to New Zealand. I appreciate in a speech where I'm talking about New Zealand's place in the world. There's not a great opportunity for me to unpack all of that, but if you reference my speech at Waitangi Day, you'll get a great sense of why we believe in the treaty, why we think it's so important. But having said all of that, you know, the social cohesion is not just a government thing you drive centrally. It is actually built from the ground up, from the community, from business, and from government working together, and all of us as individuals and citizens working on that challenge.