Well, kia ora, good afternoon, everybody. Welcome back to Parliament in what will be a three-week sitting block.
As you’ve heard Louise Upston and I say yesterday, people under the age of 25 on jobseeker support risk spending an average of 18 years on a benefit over a lifetime. Our Government doesn’t want to see people who could be working trapped in welfare dependency and that’s why we’ll always insist on work as the central solution to poverty. Our goal is to help everyone lead lives of dignity, independence, self-reliance and, above all, work, because work gives people something that welfare never can. New Zealand is a society that works on both rights and responsibilities. They help make our society fair. Removing the entitlement to get a benefit helps incentivise work, training or education for 18 and 19 year olds. Ultimately, those will be positive paths to a more fulfilling life than one spent on and off welfare. The good news is that Treasury has forecast 240,000 jobs being created over the next four years, and the economic recovery is underway, especially so in the regions.
Just moving to tomorrow, we’ll release our quarter four work plan as we push on with the changes that New Zealand needs to get growing. And then finally this week, I’ll be welcoming Lawrence Wong, Singapore’s Prime Minister, to New Zealand. Of course, New Zealand Singapore have a very strong and enduring relationship built up over many years and Singapore is our fourth-largest trading partner, with our two-way trade having topped $11 billion. And with that, very happy to take your questions.
Prime Minister, just on the job vacancies in the regions, there are many areas in New Zealand where there’s very few vacancies for quite a few jobseekers. Kawerau with three current job vacancies on Trade Me, compared to about 685 jobseeker recipients. If you’re a 19-year-old and your parents earn over the cap of this, and you live in one of those towns, would you encourage those people to move?
Yeah, I’d encourage anyone to do what it takes to get a job, because a job is better than being 18 years on welfare, and I make no apologies for that. This is a country that has a 5.2 percent unemployment rate. Go back and look at it over the last 15 years, and you’ll find it’s much lower than what it has been, even through the Key‒English period, for example. And irrespective of that, we know this is an economy about to create 240,000 new jobs. And so young people, we don’t want to send a message to them at 18 or 19 that you just drift off into welfare and that’s the best lot that you’ve got. I’m not happy to consign young people to a life of welfare. We care about them. We want them to be successful, and as a result, make no apologies for it.
Obviously, moving’s pretty hard at that age without the connections to do so, right? Is it really so simple to just leave the town you’ve been in with your family?
Of those new jobs expected to come online in the next four years, do you have any sense of the split that might be more suitable to those younger people, so more entry-level jobs, given we know—
Look, what I’m going to say is I think—I think we’re complicating it. We’ve got a reset going on. We are saying to our young people under the age of 25 that work matters. It’s so much more beneficial for you than going on to a life of welfare. And so by saying to parents of 18 to 19-year-olds, “These are your kids. We expect you to actually have an expectation that you want them to do well. Therefore, get them connected to work, to training, or to education.” And that’s the message very strongly to our young people as well. There are a lot of high-paying jobs out there in the world that I want to bring to New Zealand. That requires our kids to go to school. More than half of them don’t, or didn’t when we came to power. You know, we’re changing that. We expect them to participate in work, training, or education.
Given there’s about 10,000 fewer jobs this August compared to last year for that 15 to 19-year-old age bracket—that’s quite a lot of jobs—do you sort of appreciate it will be really tough for these young people potentially to find work and find suitable work?
Look, I’ve gone up and down the country. I just encourage you—I was in the South Island last week. I was in Christchurch. They had—on Friday. You know, they’re having a really—you know, having a huge amount of growth happening there. I’ve been up in Dargaville, I’ve been up to Hawke’s Bay. Go talk to folk in our horticultural industry. There are jobs across the country. What we’re saying to young people is: we either want you to get connected into that first job straight out of school, or otherwise go on and do the education and training you need. But just setting up an expectation that it’s OK just to drift on to an unemployment benefit or to jobseeker is not right. We’re not doing the right thing by New Zealand for the long term and we’re not doing the right thing by those individuals either.
Do you genuinely see, though, young people moving to Hawke’s Bay, for example, to work in horticulture and staying there, given those jobs are often quite seasonal? MSD did already try this when we tried to convince people to move to Hawke’s Bay specifically for fruit picking. Do you really, realistically see this occurring?
I really think you should probably go out and actually talk to some of the kiwifruit packhouses. Go up to Dargaville where I was with the kumara industry recently. 95 percent of those players there, they’re desperate for young people to join their businesses. What it requires for—and that’s why work is so valuable. You know, you show up on time. You work hard. You’re part of a team. You learn about building a work ethic. All of those good things that we know work is good for. But I’m sorry, we have to stop the expectation that it’s just OK at 18 to 19 to drift on to a benefit. I’m not giving up on kids or saying—consigning them to say, “That’s your lot in life”. That’s not right. It’s just not right.
Based on that rationale though, you know, the Government defunded or limited money for Māori trades training by $20 million. So you’re wanting young people to go out and get jobs—the Māori unemployment rate for rangatahi is significantly lower—so reconcile why you’d make decisions around defunding things that would get young people into jobs.
Well, we’re doing other things where we’re actually trying to expand and put our polytechnics back into regional control, as you’ve seen, with the reforms that we wanted to unwind Te Pūkenga, to make sure that we actually put our polytechnics out into the regions so that they can actually bridge and connect people into work. You know, we continue to make good investments in that space. We’ll continue to do so.
You’re seeing us go really strongly at making sure we can teach our kids, you know, between primary and intermediate, the basics of numeracy and literacy and do the basics incredibly well. We’ve made a decision to replace the NCEA so that we actually have work-ready students coming out of university—out of—out of school so they can connect with jobs. But if there’s further work that they need to do in terms of study or education to get themselves work-ready, we want to be encouraging that. You know, in 20 years’ time, we want to be having a very different conversation in this country about people realising their potential and being able to access high-paying jobs because they are prepared and they are skilled and they’re trained and ready to go.
Well, look, that’s an employment matter for the bank to talk through. It’s a question that should be directed to them. They, as the board of the bank, hold the contract, employment contract, with the CEO or the Governor in this case. We need to respect employment law but that’s a matter for the bank.
Well, again, I’m just saying to you there’s an employment contract between the governor and the bank board. They are the people that need to answer that and you should direct your questions to them.
Well, I have a lot of thoughts on a lot of things but I’d just say to you I don’t—I don’t sign off on a contract like that. That is something that is signed off by the board and the governor in the employment contract, and that’s an issue that ultimately the board of the bank is responsible for.
Prime Minister, on the benefit changes, sorry, are you expecting them to actually have any net fiscal impact on the Crown, given you’re giving these $1,000 bonuses?
Are you expecting them to actually save money for MSD, given you are giving these $1,000 bonuses and given there will be a new level of monitoring and means testing that has to be administrated? Will you—will we actually save money at all as a tax—
Look, I mean, some of the—I think the estimates are that we might save, you know, $39 to $40 million a year on the—on the proportion of 18 to 19-year-olds that are going to be impacted by this. Remember, some aren’t because their parents have very low incomes, they may have kids of their own, or their parental support and relationship with their parents has broken down.
The other piece is, yes, there’s a cost associated with the $1,000 bonus. But I think you’ve got to think about it a bit in social investment terms, which is that, you know, we’re paying maybe an 18 to 19-year-old $14,000 a year, a 20 to 22-year-old, you know, $16,000 a year. If they’re forecasted to be on welfare for 18 years over the course of their lifetime, when you think about the value of all of that, making this—you know, what we’re trying to change is actually the trajectory of where those lives are going so they’re not just consigned into a life of welfare, they actually get connected to work and more opportunity as a result.
Well, as I said, those are the component parts. But as I said, ultimately, this is not about the savings. This is actually about setting up a different expectation for under-25s to say, “Hey, listen, in this country, we care about you”. We’re not prepared—maybe previous
Governments have been happy to do that, just to write you off and consign you to a welfare list. That ain’t going to happen.
What is your Government trying to achieve with the changes to fair trading laws that have sort of frustrated the sector groups and caused them to write to Nicola Willis and Scott Simpson?
Look, I’m not going to comment on that now because I know it’s ongoing conversation that’s still happening as that’s working through our system. I know there’s meetings happening with different sector groups around that policy right now.
Well, there obviously will be in due course, but there’s a proposal on the table which is actually still getting, you know, engagement with stakeholders, which I’ll let that continue to play out.
No, no, I expect sector groups to give us the input that we need to do to make sure we make better regulation and better legislation. That’s a requirement that we have, and it’s important that we actually get that feedback as well. So I’m going to let those conversations take place between Ministers and different sector groups as they build it out.
The Taxpayers’ Union worries that the design of the benefit policy might disincentivise some low-income parents from working so that they drop below the cap. Have you received any advice on that and are you worried that some parents that are only just above the cap will quit their jobs so that their kids get the benefit and [Inaudible]—
I would hope that’s not the case. I think parents—I think we’ve got to call them to responsibility. They want their kids to do well, they want their kids to do better than they did, and that’s what our expectation would be. I don’t think that would be, you know, the right behaviour and I don’t think that will happen, frankly.
Treasury did warn of some, they said, “perverse incentives” in its design at the Budget. They warned of that in part of the Budget documents. Did you get any briefings on that, or do you have any thoughts about how those potential perverse incentives have been modified or adapted?
We get advice all the time but we’ve got a policy here, which is actually we’re sending a message very clearly to 18 to 19-year-olds: you need to be connected to work, employment, or training. Simple as that. We care about you, we love you, but we don’t want you being consigned to a life on welfare. That doesn’t work anymore in New Zealand.
Well, what we’ve done here is we’ve said we’ve picked a number of $65,000, which is actually the income cut out, I think, on the living support payment so obviously, very low-income families are excluded. We’ve also said, look, if there is a parental breakdown, there’ll be what’s called a parental support gap assessment and test. If that relationship is broken down between that young person and their parents and is verified as such, then that obviously exempts them. And obviously, if they have their own children, they’re exempted as well.
So, you know, not every 18 to 19-year-old’s going to be captured by that but we have to start to change the culture and the message very clearly, which is that we care about you. And it’s not good enough just to consign a whole bunch of people on to welfare for 18 years, which is the forecast that you’ve seen. So let’s do something different about it. Let’s actually call parents to account to say: you do everything you can to get your young person connected to work, employment, or training. Young people yourself, take personal responsibility to think about where—your trajectory of your life, you want it to go. And we as a Government are playing our part in that process as well. So I appreciate there’ll be lots of different views about it. I get it. We’ve taken advice from lots of different people on it. But at the end of the day, we want our under-25s to understand that this is what we want for them, is work.
Not off the top of my head here today. But there’s about 15,000, you’re right, that are 18 to 19-year-olds. I think there’s about 9,000 each year that come into the system, potentially. There’s about 4,300 that we estimate will be impacted by this and about 4,700 that wouldn’t be impacted based off parental income, based off, you know, they have kids of their own, etc.
It sort of seems in some way a bit of—because the cap’s quite low, it seems almost a bit of a sad irony that a lot of people who will be eligible for this will already be in benefit-dependent households.
Yeah, well what we’re saying is that’s why we’ve set the cutoff at $65,000 to say, look, the reality is if you’re coming from very low-income families—that’s why we’ve had to put that limit in place, which I think is appropriate. But, you know, actually people would argue it’s quite a low limit too, you know, and as a result, the message very clearly is, to all parents is: play your part and get your young person out, connected to work or training or education. We’re playing our part by saying, “Look, that’s just not a natural pathway that you just get to drift on into welfare and we leave you there for 18 years. Not going to happen. We want to do everything we can to support you into good jobs and into a future.”
$65,000. It’s the cutoff limit for the living support payments, essentially. That’s where the income support—income cutoff point is on living support payment, from memory.
Well, we chose that. It’s the number that we chose. We just said, look, you know, for very low-income families below that sort of level of income, that’s really challenging. We acknowledge that. But equally, we’re saying going forward, we expect as many parents as possible to play their role in getting a young person connected to work.
—Government policies are basically deliberately driving up the level of homelessness in New Zealand around trying to access emergency housing and stuff like that. What would be your response?
Look, I think the Labour-Greens legacy of that last Government was abject failure on housing. You had perverse situations where you saw house prices go up 30 percent in a year, you saw rents go up $180 per week, you had a four-fold increase in people on the state HOUSE waitlist, and you actually had a perverse situation where $1 billion dollars was being spent, and 32 percent I think rise in homelessness, and people in motel emergency accommodation. You know, this is a Government that has actually stabilised house price growth, actually lowered rents paid out, taken 6,000 people off the state house wait list, and moved 2,200 kids out of, you know, dark, damp motel rooms into proper houses. And you’ve also seen us make an effort in recent times to say, with Tama Pataka’s work and Chris Bishop’s work, to say, what more can we do on homelessness?
Well, I expect it’s been—I’ve heard the anecdotals. We don’t have good data on it. It’s not something that we have regular good or quality data around the reporting of it. But, you know, that’s why I’ve—you know, Chris Bishop and Tama Potaka have met with, you know, different sector leaders to sort of say, “What more can we be doing?” And, you know, recently, they’ve announced, you know, five things that they’re doing.
No, we just think that’s a fair limit, you know, and that actually—you know, we acknowledge there are very low-income families and coming from very challenging situations. People would argue it’s a pretty low number as it currently stands. And I think, you know, we’re saying: look, for young people who come from very low-income families, for young people who actually may have a breakdown with the relationship with their parent, and for young people who actually may have their own kids, you know, they’re going to be exempted from this.
Mate, I don’t know. I’m responsible for a lot of things in New Zealand but that is not one of the things I’m responsible for, and I don’t know the details or the background to any of that.
I was just asked for my views as a CEO, a former CEO, how I would manage staff and relationships, and what I explained to him was in most of the jobs that I’ve had, I’ve made sure all my team that report to me and all my senior leadership team get what we call 360-degree feedback from below, around, and above them in terms of the management and their own employees. And we spend a lot of time building out and sharing that feedback with them so they can get better and, you know, sorting that out.
Just following up on Russell’s question around the tapering off, you know, this is how Working for Families works. Every dollar you earn above the threshold, you earn a little bit less entitlement. It’s to avoid a perverse incentive where if you earn $64,999 today, your child gets the full entitlement; if you earn one more dollar tomorrow, the child loses all of it. It’s quite a big step up in terms of the obligation that you as the parent need to provide to help take care of your children while they look for employment, which isn’t always an instant process. Why not taper it?
Sure. Look, in this case we just chose that number and we said that’s aligned with the income cutout point on living support payments, which is, you know—which we thought, you know, was not an unreasonable way to do it. I appreciate there’s lots of different ways you can design it. We want it to be simple, we want it to be clear, and I want actually all parents to be focused on their kids getting into work. And yes, we’ve put a limit in there of an income limit but, you know, even if you’re below that limit, you want to make sure your young person’s going to do better than you. That’s as simple as it needs to be in New Zealand.
Look, again, our message here is very clear, is that, you know, we’ve seen these boats intercepted. We have been—we’ve been reassured that all the passengers and protesters are actually safe. There’s a reason for why we have had a long-term advisory. Do not go to Gaza. It is a war zone, so do not go. But despite that, these three individuals have chosen to go. We’ve had a consular partner check out and meet with the three individuals concerned in Tel Aviv. We’ll continue to offer consular support in the days ahead. We’ve conveyed very strongly to the Israeli Government that the safety of these Kiwis is paramount. But I’m not going to go commenting on the individual cases, obviously, for privacy reasons, which is a standing position that we have around consular cases.
Prime Minister, the Greens say that there are National Party MPs who want the Government to go further on Israel. Are you aware of that, and what would be your position?
Prime Minister, just on the Manawanui, do you think $6 million is enough considering the impact the sinking has had on local communities and the environment?
Look, what we did simply there—it wasn’t a negotiation. We asked the Samoan Government to come to us with what they thought would be appropriate and in good faith we signed up for that. That’s the amount of money of NZ$6 million. They obviously now will work out how they disperse that into the communities that were impacted around not being able to fish, for example, over the course of that period while we were extracting fuel off the ship. So, you know, it’s—I think we’ve been—you know, we just—we just actually, basically said, “No, we’re going to front with whatever they actually want us—you know, what they ask for”, and that’s what they did.
Our latest defence announcement, last week from Minister Collins. Does it jeopardise New Zealand’s involvement with the Ocean of Peace Declaration, seeing that a heavy part of it is demilitarisation in the Pacific region?
No, not at all. You know, what you’re seeing all around the world is, you know, international—you know, countries internationally, and also you’ve seen it here in New Zealand, increasing and stepping up our defence spending significantly. We don’t want to see militarisation across the Pacific or anywhere in the world, frankly, but we need to acknowledge that we need to make sure that we’ve got militaries that are functioning and are well-positioned for the future.
All that Minister Collins is talking about, which I fully support, is the fact that we want—as that expenditure increases, we want New Zealand companies and our own defence industry locally here to grow and to be able to participate in that—in that—in that activity. You know New Zealand, you know, defence companies are highly innovative. Think about the work around boats and uncrewed aircraft. The example was when I was in the UK checking out our training of those Ukrainian soldiers with Kia Starmer, SYOS, you know, a New Zealand company, had done a deal with unmanned, you know, vehicles with the UK Ministry of Defence. All we’re wanting to do is if we’re going to spend $12 billion in the next four years, we want to make sure that we can build an industry off it and actually make sure that New Zealand companies do well off the back of it.
Prime Minister, you’ve got some social media companies telling the Government to taihoa on banning social media for under-16-year-olds. What do you have to say to those companies on their position?
Look, I mean, our policy—we’re doing the policy work right now. We’re looking at what other countries around the world are doing. We’ll have more to say about that, hopefully, by the end of the year. Definitely, our plan is to have something in place before the end of the term. We think it’s important for the reasons that I’ve talked about before, is that we have regulations in the physical world. We need regulations in the virtual world. We really want to make sure that we’re doing everything we can to protect our kids online. And so I appreciate, technically, there will be a whole bunch of technicalities around age verification. You’re seeing different countries wrestle with that as they are developing their policies. We’re staying close to all those developments. We’ll have more to say about it in due course.
I think there’s strong evidence for under-16s to say it can be really harmful. I think about the amount of cyberbullying that we’ve seen. One of the—one of the things that I’ve— that people play about with me as I move around the country, particularly in schools, is that, you know, there’s a lot less cyberbullying happening when we banned the mobile phones across schools. I think that’s a good thing. So I think we can find a way to actually say we’re gonna protect our kids under the age of 16. We’re gonna then—and make sure that we have the limits in place in the virtual world that we put in place in the physical world.
Anthony Albanese says there’s no question that Australia’s decision to recognise Palestine, along with other countries, has helped with the Gaza peace plan being developed by the Trump administration and finding legs, that they’ve kind of pushed things along. Is he right?
Well, look, I mean, we’ll all have our different views on that. There’s good people on all sides of the recognition debate. But the recognition, put it to one side. The main event is actually making sure we get to a ceasefire, and what you’ve seen with President Trump’s 20-point peace plan is a lot of the stuff that we’ve been advocating for very strongly. Hamas must release hostages. Israel must pull back its military actions. We must get to a ceasefire. So I would just say to you, you know, we came to our position. Many of our friends have the same position. Some of them don’t have that same position. But the reality is recognition I don’t think is the main event. The main event is getting the parties to the table to have a negotiation on a ceasefire.
The Winston Peters’ argument and New Zealand’s argument has been that those countries recognizing Palestine has actually been counterproductive, that it’s led to a worse outcome in Gaza. If we’re now seeing a peace plan move ahead, does that mean the New Zealand argument was wrong?
No, I just would argue to you I don’t think recognition has an influence on that. I think what is having an influence on that is the humanitarian catastrophe that we’ve all been watching over the course of the evenings, and it’s just unacceptable and it has to stop and the killing has to stop. And so you’ve seen the regional players come together with the US, with President Trump, proposing a peace plan. Let’s hope it sticks. I mean, it needs to stick. The killing has to stop. I’d just say to you I personally think recognition is a side event. The main event is actually getting to a ceasefire, and actually it required President Trump to actually make that move to actually put that plan out there that looks like it’s going to be accepted at this point. There’s a long way to go, obviously. We hope that all the parties take that opportunity up that he’s created.
My personal view is that the recognition—you can form your own view on recognition but what we have been advocating for—and we work with our like-minded countries who have recognised and haven’t recognised as you’ve seen us continue to call out, you know, grossly disproportionate actions from Israel, Hamas, a terrorist organisation, not being prepared to release hostages. And you’ve seen President Trump come forward with a 20-point peace plan that has seemed to have got those tables—those parties to a table. Now let’s make sure that they follow through and actually we get hostages released and we see military hostilities cease.
Prime Minister, do you have concerns that ministries or Government agencies may reduce their services, their frontline services, in order to pay for your increase to Crown board fees?
Government agencies spend billions of dollars or hundreds of millions of dollars. What we’re talking about for Crown agencies to get good calibre directors in place—so let’s be clear: we’re not remunerating them on a market base at all. We’re just making sure the relativity is slightly better than what it has historically been or has become in recent years. A good director and a good board can save the New Zealand taxpayer and the New Zealand Government hundreds of millions of dollars by making good decisions. And so by actually us just making sure we can set those rates in a way that is more—you know, makes it less of an issue where we can actually attract good talent into those jobs, which is needed—we acknowledge fully it’s nowhere near the market rates that you get in the private sector but we’re just trying to make sure that it’s in a format that actually makes it attractive to take on those jobs.
I can say, you know, we want our agencies every single day tilling their budgets in its totality because not every dollar is perfectly deployed and so we expect them to get more value for money out of the same amount of money each and every year.
A good example is this. So, you know, here in New Zealand it used to be acceptable to have $1.2 million to build a classroom, to provide a classroom out into education. By saying, “Sorry, you’re going to do standardised buildings”, we move it from 20 to 65 percent, we drop the cost to $620,000 already. Now we can do twice as many classrooms with the same amount of money. Now, that option was available to Chris Hipkins over six years. They didn’t take it. He was the Education Minister. We happened to deploy that money in a much better way with better management and therefore better results. That’s an example of what I’m talking about. That mentality of saying, I have $100, how am I going to spend that money more effectively, more efficiently, each and every day, says to me that actually they can more than comfortably accommodate through their baselines any increases in director fees.
The families of the three detainees in Israel are calling for sanctions. They say not enough has been done to support Palestinians. What’s your response?
We have imposed sanctions. We’ve imposed sanctions on Israeli settlers. We’ve imposed sanctions on Ministers of the Netanyahu Government. And, you know, we also don’t have a tremendous amount of trade so there’s not much trade to deal with. And importantly, we’ve had export controls in place since 2003. So, you know, we have imposed sanctions. We have called out Israel’s grossly disproportionate response. But we’ve also called out Hamas as a terrorist organisation that massacred 1,200 innocent people almost two years ago, took 251 people hostages, and refuses to release the ones they still hold on to two years down the road. Absolutely unacceptable, too.
Well, it’s not for me to determine that but, you know, we also have—there’s arguments on both sides of that. You’re going into a war zone and you want to keep people safe. There’s 40 boats and 500 people. You could argue you’re trying to keep people safe. Equally, we’ve made it crystal clear to New Zealanders over the last few years: do not go to
Gaza. It’s a war zone. You know, it’s not about you. We’re there to try and make sure that we actually get to a peace, we get to a ceasefire, that the humanitarian catastrophe and the killing stops, and that’s what we’re focused on as a Government and that’s where we should be focused on. So, you know, again, there’s arguments on both sides of that one. All right, thanks, team. See you.