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Watch: PM blames recession on Labour, says they should spend a 'generation' out of power

Raphael Franks,
Publish Date
Thu, 21 Mar 2024, 2:11PM

Watch: PM blames recession on Labour, says they should spend a 'generation' out of power

Raphael Franks,
Publish Date
Thu, 21 Mar 2024, 2:11PM

The Prime Minister is this afternoon addressing a rural audience reflecting on his coalition Government’s first 100 days in office and outlining the road ahead.

Christopher Luxon has also addressed a turbulent week in politics: with today’s announcement the country is back in recession, comments by his Deputy Prime Minister Winston Peters on co-governance and controversy about the use of a song during his state of the nation event last weekend.

Luxon spoke at the opening of a new farm machinery warehouse in South Auckland, where he was also expected to address infrastructure projects under a fast-tracked approval process.

Stats NZ this morning revealed the country had entered recession with Gross Domestic Product (GDP) falling 0.1 per cent in the December 2023 quarter compared with the September quarter.

Economists traditionally define a recession as two successive quarters in which the economy contracts.

The economy shrank despite record migration levels and population growth. GDP per capita fell 0.7 per cent in the last three months of the year, Stats NZ said today.

Real gross national disposable income fell 1.4 per cent.

In his speech to business figures, Luxon blamed today’s GDP result on the previous Labour government.

“Sadly, the previous government has borrowed more. We’ve got to face up to that. We’ve got nothing to show for it. We’ve got a big fiscal repair job to do,” Luxon said.

Of the prospect of the public voting in a Labour Government again, Luxon said “you shouldn’t do so for a generation”.

The National-led Government’s budget would balance “a number of things”, Luxon said, saying a culture of fiscal discipline would be built through multiple budgets.

The PM also addressed the public service job cuts announced today with hundreds of roles to be cut across the Ministry for Primary Industries (MPI) and Ministry of Health. Luxon said many roles being cut were already vacant and pivoted to talking about the increased number of staff within the public service hired under Labour.

Act leader David Seymour had said the job cuts were “good”, but the PM would not be drawn on whether he agreed with those comments.

On reports of a foreign agency running a spy operation out of New Zealand’s Government Communications Security Bureau for years without the government knowing, Luxon said that was a historical event. He said the Government was in a good space with Minister Judith Collins in charge of GCSB.

The PM went on to say the previous Government had been “at war with farmers”.

“What I’d say to you is, you’re not villains. We want to back farmers big time. There’s nothing more economically important to us.”

Yesterday, Luxon faced questions from Opposition parties during Parliament’s Question Time, copping criticism for prioritising tax cuts for landlords over people with disabilities.

Labour leader Chris Hipkins asked Luxon why Cabinet had agreed to reinstate interest deductibility for properties without boosting disability support funding.

Luxon disagreed with Hipkins’ representation and said his Government was currently going through the Budget process and would be assessing the funding for the Ministry for Disabled People.

He was also pressed on what he had done to reduce the cost of living.

Green Party co-leader Chlöe Swarbrick asked him to name one action his Government had taken to support people facing higher prices.

Luxon’s first example was the ditching of the Auckland regional fuel tax, which he later conceded wouldn’t lead to lower fuel prices in the city until July.

She then asked whether landlords and high-income individuals or low-income people benefited the most from the Government’s proposed tax cuts.

Luxon said Swarbrick would have to wait until the Budget and maintained low- and middle-income people deserved breakthrough tax relief.

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.

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