Christopher Luxon
Minister, Ministerial Services
Minister, National Security and Intelligence
Prime Minister
Permanent linkKia ora, good afternoon, everyone. As you know, we’re now into the last sitting block for 2025 and it’s going to be certainly a sprint finish, with some big things to get through in the next couple of weeks.
I understand that for some families, of course, it’s still very hard going, and this time of the year in particular puts a lot of pressure on the household budget. There’s no denying the economy has been in a tough spot as we recover from the era of high inflation and high interest rates, but we are starting to see more and more data coming through that is showing things are picking up as the stimulus from lower interest rates continues to flow through the economy. Westpac reported that it’s been a strong start to the holiday shopping season, with spending on Westpac cards in the three months of September up 8 percent compared to the same time last year, and notable was the increase in discretionary spending areas, particularly on clothing and furnishings, up 11 percent. This trend is backed up by ANZ, which also reports that card spending for November is almost 4 percent up compared to the same time last year, and ANZ reports that there are no spending categories that are down on a year ago.
What this suggests is that consumers are starting to feel more confident, and we expect that confidence to keep picking up as homeowners refix onto lower mortgage interest rates. We expect that around 70 percent of all fixed mortgages will refix in the next 12 months, with most of them in the next six months, which will provide some welcome relief in the household budget.
Businesses are also feeling more confident. ANZ reported that business confidence jumped nine points last month, the highest level in 11 years, and the measure of businesses’ expected own activity also rose to the highest level in more than a decade. The good news is that our annual trade balance is now back in the black after four years of large trade deficits, which is great news for Kiwi exporters. And, as you know, the tourism sector is continuing to bounce back, with tourists arriving in greater numbers and spending more. International visitor numbers for the year to September are now at 88 percent of pre-pandemic levels, and spending by international visitors was up 5.3 percent to $12.3 billion in the year ending September. All of this is to say that while we’re still in recovery mode and there is a lot more for our Government to do, the data is beginning to show that New Zealand is in a better position than it was a year ago.
As a Government, we’ve been very focused on fixing the basics in the economy, ending the wasteful Government spending to support lower inflation and lower interest rates so that we begin easing the cost of living, and we’ll continue to fix the basics, but we’re also very focused on the long term and building out our future.
Tomorrow we will unveil our new pro-growth planning system to replace the Resource Management Act. Everyone knows that the RMA is broken. It is the root cause of many of New Zealand’s economic challenges. Frankly, it has held us back for 30 years, and it’s turned us into country that says no far too often. With our Government’s new planning system, there will be less talking and filling in forms and more building and more growing. To give you a sense of how radical our changes will be, officials estimate that up to 46 percent of consent and permit applications required under the current RMA could be removed under our new planning system. Based on 2023-24 volumes, that represents between 15,000 and 22,000 consents that would no longer be needed. Of course what it means is more houses, more wind farms, more supermarkets, and more roads. Homeowners will be able to build a deck or extend their home without unnecessary costs and delays. Farmers can spend more time on the farm and less time on paperwork.
Successive Governments have tried to make changes, which have ended up being completely unworkable or merely tinkering around their margins. What we’re proposing tomorrow will be a game changer. The full details of our reforms, of course, will be unveiled by Chris Bishop and Simon Court tomorrow, but in short, they will be truly transformational for New Zealand. And with that, we’re happy to take your questions.