Marking two years in Government
Good morning, everyone and thank you so much for coming out today.
It’s fantastic to be here in Wellington with so many National Party friends.
Today I want to speak to you about how National is fixing the basics, and how we’re building the future.
Back when we formed Government in 2023, we knew the job of cleaning up the mess and fixing the country would not be an overnight job.
It’s been two years of hard work – in Government, from businesses large and small, and from every New Zealander.
The slow pace of recovery and the sheer extent of the efforts taken to cushion economic conditions and promote growth reflect just how broken the fundamentals were when we entered office.
Inflation was at a record high, food inflation was staggering, mortgage repayments had skyrocketed, young people hoping to buy their first home couldn’t pay rent and save fast enough to keep up with runaway house prices. Wages had stagnated, taxpayers’ hard-earned money was being wasted on bureaucrats, consultants and ideological projects, and instead of exercising any restraint at all, Labour borrowed more and more money.
Public debt skyrocketed, up $120 billion.
The interest bill alone is now nearly $10 billion a year, which is more than the total cost of Police, Corrections, the Ministry of Justice, Customs and Defence added together.
Or put another way that’s the equivalent of five Dunedin hospitals that could be built each and every year.
I still meet families today paying 7 per cent or more on their mortgage, anxious to re-fix and save a little bit more of their own money.
Of course, now Labour is back with a capital gains tax because they can’t help themselves, but go after everything you own – your bach, your rental, or your small business.
And you can guarantee that between now and the election, they’ll be back for more – from landlords, from business owners, from motorists, and from farmers.
But enough about Labour and their failed economic policies of spend more, tax more, borrow more.
Our attitude – National’s attitude – has been to get stuck in to fix the basics.
Take law and order.
Between 2017 and 2023, violent crime rose 30 per cent, gang membership increased by 50 per cent, retail crime doubled, and ram raids quadrupled.
I recall in Opposition visiting a dairy where a little boy lived behind the shop with his parents.
He was traumatised because one night, while he was sleeping behind the counter, a car crashed right through the front window.
To him, it was a home invasion targeting the people who loved and protected him.
His parents were his whole world. That incident, one way or another, will stay with him for life.
His story wasn’t a one off.
Many New Zealanders have a story about their local dairy being robbed, or driving to work under Labour seeing shop windows smashed in by ram raiders the night before.
Thanks to Paul Goldsmith and Mark Mitchell, National has largely ended that era of lawlessness.
We have banned gang patches in public.
We have delivered tougher sentencing, so offenders do real time.
And more powers for Police, and more of them out on the beat.
The results?
38,000 fewer victims of violent crime.
Youth offending down by 16 per cent.
Ram raids down by 85 per cent.
But above all, fewer shattered dreams. Fewer lives torn apart by heartbreak and fear.
Whether you are at home, at work, or in the community, New Zealanders are safer today under National than Labour.
Let’s turn to education.
I am forever grateful for the state education I had – and forever determined that every Kiwi kid should have the chance to improve their circumstances, whatever their start in life.
Nothing is more important to me.
But when we entered office:
- More than half of our kids were not attending school regularly.
- 80 per cent of 13-year-olds were not where they should have been in Maths.
- Half of them were not where they needed to be in Reading.
- And the whole country was falling behind in international rankings for Reading, Maths and Science.
It’s why three years ago, I stood in this exact room and set out National’s plan to teach the basics brilliantly.
And we have delivered.
In just two short years, thanks to Erica Stanford, we have:
- Banned cell phones in classrooms.
- Mandated an hour of reading, an hour of writing and an hour of maths – every single day.
- Stopped building new open-plan classrooms.
- We’ve introduced a new structured approach to teaching literacy and numeracy that is already delivering results.
- And for students starting high school next year, NCEA will be gone.
Already, the number of new entrants achieving where they should be has gone from a dismal 36 per cent to 58 per cent. The number of students exceeding expectations has doubled - and we’ve only just started.
By fixing the basics, every child is getting a better shot at the life they deserve, with higher-paying jobs, and more opportunity, thanks to National.
Finally, the economy.
We’ve made a lot of progress.
We’ve stopped wasteful spending and inflation has more than halved.
Interest rates have been cut eight times.
The result is that someone re-fixing an average mortgage today could expect to save around $10,000 a year, compared to the end of 2023.
And recent weeks have seen a flurry of positive signs, from near-record tourism numbers from Australia, a rebound in business confidence, another month of growth in manufacturing, and exports going from strength to strength.
But it has been a difficult time for many families and businesses.
The middle of the year was particularly challenging.
Tariffs hit, confidence crashed, and while conditions are looking brighter today, it has taken months to climb out of the hole.
The country, rightly, wanted answers. So, we looked at the options.
In recent years, the standard response in New Zealand to shocks like that has been what I call “sugar-rush economics”.
At different times, governments have tried to lift immigration considerably, engineer much higher house prices, or inject billions of dollars of additional spending, ultimately funded through borrowing.
The reality is that those choices – intended to juice short-term economic activity – have provided an illusion of growth but often left us worse off over the long-term.
Our aging infrastructure has struggled to keep pace with a rapid rise in the population.
What families manage to save has become overexposed to housing instead of productive investment.
All the while a generation of young people were locked out of home ownership.
Meanwhile, government debt is at its highest level since the early 1990s.
Like everything in life, there’s a balance.
I want skilled migration that supports genuine economic growth.
And most economists are picking house prices will pick up a little in the next 12 months as interest rates continue to fall, providing some relief to those homeowners pushed into negative equity in recent years.
Debt also needs to be managed down carefully, while we continue to invest in the roads, schools, and hospitals the country badly needs.
In the months following the Budget, there were plenty of calls for emergency measures.
But we’re not going back to the sugar-rush economics of more people and more debt to make up for every economic crack and wobble.
The country can’t afford another cost-of-living payment, or another surge and crash in house prices.
We are sticking to the plan.
I understand that it’s hard going for some right now, as we experience a challenging, but ultimately healthy and essential pivot in the New Zealand economy.
Our focus is shifting the economic fundamentals, like exports, savings and investment, and a return to balanced budgets, so we don’t just recover, but make ourselves richer, and make sure Kiwis get ahead.
And in turn, that’s forcing a bigger conversation about our future and the choices we need to make so New Zealanders have a shot at a better life.
We’re still going to keep on fixing the basics, which is a big job.
But as I said right at the start, National is about fixing the basics and building the future.
The legacy of this Government can’t just be to shepherd the country through a challenging, but ultimately temporary, period of economic and social pain, left to us by Labour.
When I joined politics in 2020, it wasn’t because I wanted to clean up Labour’s mess.
I came to politics because I was obsessed with the extraordinary potential of this country, frustrated that it wasn’t being realised.
Kids growing up in Bishopdale, Christchurch, like I did, or here in the Hutt Valley, deserve to see New Zealand as the best place on earth for them to get a world-class education, start a career, buy a home and raise a family.
My story wouldn’t be possible without many generations of Kiwis before me, like my parents, my teachers, and so many other New Zealanders, making a collective commitment to my future.
We now owe that very same legacy to the next generation.
We owe them a country of hope, ambition, and opportunity.
We owe them a shot at an even better life than we had.
Renewing that legacy of service and sacrifice made by our parents and grandparents is why I’ve come to politics. It’s why, like you, I am a member of the National Party.
Because it is only the National Party that fights for personal responsibility, equality of opportunity, and reward for hard work.
And in difficult times, it’s only the National Party that will build the future.
Let me tell you about three of the bigger, long-term challenges we have to take on to make that happen.
First, is how we lift New Zealand’s standing in the world and fight for our share of trade and investment.
As Kiwis, we don’t always give ourselves enough credit for just how much we punch above our weight when we compete overseas.
Yes, that’s our athletes and our artists – but it’s also our farmers, growers, and start-ups, too. And a lot of the time, I’m lucky enough to be right there with them, as deals get signed and business gets done.
Walk into just about any supermarket in Shanghai, Seoul, or Singapore and you’ll see kiwifruit from the Bay of Plenty, wine from the Marlborough Sounds, and apples from Hawkes Bay.
We should be proud of that, and it’s positive that exports have grown under this Government by around $12 billion in the last two years.
But if we’re serious about shifting our economy up a gear, we have to keep working to lift our profile.
In 2022, Nanaia Mahuta, who was Labour’s Minister of Foreign Affairs at the time, said doing a trade deal with India wasn’t a priority.
Chris Hipkins doubled down, saying it would be impossible.
I couldn’t believe it.
New Zealand can’t be the country that doesn’t care.
And we can’t be the country that says it’s too hard to even try.
Eight months or so after negotiations began, we are getting very close to a trade deal with India.
Todd McClay was up there again this week.
And two weeks ago, his counterpart from India was down here.
The progress to date reflects a fundamental difference between National and Labour.
When I said in 2023 that we would get a trade deal done with India this term – I meant it.
And when Nanaia Mahuta and Chris Hipkins said trade with India wasn’t a priority – they meant that, too.
I want to get this deal done.
More trade means more jobs.
More trade means higher wages.
And more trade means more opportunity for every New Zealander.
We’ll get the deal done – and we won’t stop there.
Productivity is another big challenge. It’s been a problem for decades.
To give you a feel for it, Australia is 25 per cent wealthier than us, Ireland is twice as wealthy as us, and Singapore is three times wealthier than us.
And for those countries, greater productivity and more wealth mean higher incomes and better public services, like health and education.
We have to get richer as a country.
Getting to yes faster is a big part of the solution.
That’s why we’re doing Fast Track, so infrastructure, housing, and energy gets ticked off sooner, creating more jobs and lifting incomes.
It’s why Chris Penk is bringing in new earthquake rules, so buildings in towns and cities up and down New Zealand get brought back to life.
It's why Simon Watts is reforming the electricity sector, so we have more affordable, more abundant energy.
It’s why Chris Bishop is abolishing the whole RMA – coming to Parliament in the next few weeks.
And it’s why there’s a shake up coming for local government – watch this space.
The third challenge is lifting our levels of savings and investment as a country.
Since KiwiSaver was introduced in 2007, millions of New Zealanders have enrolled, made contributions, and watched their savings grow.
The scheme has changed a little over that time, but the basic features remain the same: contributions by employees, matched by employers, with withdrawal only permitted either at retirement or to get on the property ladder.
That approach has survived in my view because of an enduring political consensus that allowing New Zealanders to rely on superannuation alone in their retirement would be a mistake.
New Zealand Superannuation is an important part of our social safety net, supporting seniors to get by later in life, but let’s not pretend for a moment that it’s enough by itself to live a luxurious lifestyle.
And one day, when the age of superannuation does eventually increase, as has been National’s policy at the last three elections, I think everyone acknowledges that KiwiSaver will play an even bigger role in supporting New Zealanders’ retirements.
Supplementing superannuation payments through a combination of home ownership and durable long-term savings will always be important to deliver financial security in retirement.
National is committed to strengthening that vision, where KiwiSaver plays an even larger part in supporting New Zealanders’ future financial security.
It’s why, earlier this year, the Government agreed to lift KiwiSaver contributions for employers and employees from 3 per cent to 4 per cent.
Those changes are being phased in carefully, so businesses have time to adapt, but over the long-term they will mean larger KiwiSaver balances – whether you’re looking to retire or save for a deposit on your first home.
But even after those changes, KiwiSaver contributions remain much lower than the equivalent in Australia.
For Kiwis working here in New Zealand, that means smaller KiwiSaver balances and less financial security than friends or family working and saving in Brisbane, Sydney and Melbourne.
Smaller retirement balances present a challenge for the country as a whole, too, as we rely more on investment from offshore for the capital to fund the infrastructure, start-ups, and housing we need to grow our economy, create jobs and lift incomes.
If we’re serious about building the future, and I am, it’s time to increase our ambition for our individual retirement savings, and for our collective savings that can be invested in some of the transformational projects in our infrastructure pipeline.
So today I can announce that if elected next year, National will continue to increase contribution rates for employers and employees, so individual balances grow faster, whether you’re saving for retirement or a deposit on your first home.
Those additional increases will start from 1 April 2029, rising by 0.5 per cent per year until 1 April 2032, to a 6 per cent contribution rate for employers and employees.
This means National will double KiwiSaver contributions.
And it will mean a combined rate of 12 per cent, matching Australia.
For working New Zealanders saving for the future, that will make a big difference.
Let’s take a look at what that means for someone entering the workforce today.
A 21-year-old earning $65,000 per year today and making default contributions in line with the changes already delivered at this year’s Budget, could expect to retire with around $1 million in their KiwiSaver account by the time they turn 65.
Following National’s proposed changes, that same individual could expect their KiwiSaver balance to be around $400,000 larger – or around $1.4 million in total – assuming they increase their contributions to the planned higher default rates over time.
Of course, the actual increase in KiwiSaver balances at retirement will depend on someone’s individual circumstances, including their earnings, contribution rate, what sort of KiwiSaver fund they are in, and how close they are to retirement.
As is the case today, employees won’t be required to save 6 per cent of their pay-cheque, but if they do, their employer will be obliged to match them.
By not making it compulsory, families have the flexibility to reduce their contributions if they need to, especially during a difficult period, while keeping a real incentive to save more if and when they can, thanks to employer matching.
They’re not changes that will kick in overnight, but they are a step-change for the future, with greater financial security for you and your family.
But this is about more than financial security and national resilience.
This policy is about a promise we made together at the last election.
That if you’re a New Zealander who works hard, who works long days, and late nights, who gets the kids to school, and makes the right choices for your future, your family, and your community, then you deserve to get ahead.
At next year’s election, National will renew that fundamental promise.
That’s what this policy is about.
If you play your part, your employer should play theirs.
And when you build for your own future, National will back you every step of the way.
In closing, the last few years have been hard work for everyone, but National has been fixing the basics.
An end to the era of wasteful spending – supporting lower inflation and lower interest rates, to begin easing the cost of living.
Fewer ram raids, less crime, gang patches banned, and more police on the beat, making New Zealand’s streets safer.
Stronger achievement in our classrooms, and kids getting back to school to better set them up for life.
Now we’re building the future.
Growing the economy, to create more jobs and more opportunities for Kiwis, with more trade and higher productivity.
Spending your money carefully so we don’t burden our grandchildren with more debt.
Upgrading the roads, schools, and hospitals you rely on.
And supporting New Zealanders’ financial security for the long term, with greater levels of savings and investment.
With National, New Zealand’s best days are ahead of us.
More hope, more opportunity, and more ambition – so you, and your family, can get ahead.
Thank you.