Luxon's pre-Budget message focused on 'squeezed middle'

Christopher Luxon's pre-Budget speech saw the National leader focus on what he has been calling the "squeezed middle" and his "relentless focus" on results and outcomes for the economy.

He took aim at the $6 billion boost in the upcoming Budget, which is set to prioritise health and climate change, saying the Government "has no plan for the economy except to spend more money".

Luxon said National "cares deeply about the squeezed middle".

"The Government I lead will focus relentlessly on results – delivering better outcomes for each dollar spent," he said. "That means bringing back targets and accountability which this Government has dispensed with. We’ll celebrate successes, but we’ll also hold ourselves to account when things don’t work.

"It also means being pragmatic enough to know when more Wellington bureaucracy is not the solution. The best solutions often come from community organisations and businesses, and in that case Government’s role is to enable – not to dominate and to centralise.

"It means investing in what works, and constantly questioning whether taxpayers are benefiting."

National leader Christopher Luxon.

Luxon outlined his "five critical levers of prosperity" - education, infrastructure, technology and innovation, business environment and connections with the world.

"There’s a squeezed middle watching the cost of everything skyrocket while this Government seems to have forgotten about them entirely," Luxon said. "But I’m aspirational for New Zealand. I believe that with a fresh approach from government, we can realise New Zealand’s massive potential."

National wants to adjust the three bottom income tax thresholds to account for inflation, which they said would cost $1.7 billion. It would mean a person on an income of $150,000 and also $85,000 would save $1043 in tax, while a person earning around $45,000 would get $112 a year.

Finance Minister Grant Robertson criticised the policy, saying it would cost "at least $3 billion over the forecast period resulting in less money available to invest in key services like health, education and police".

National has also called to cut taxes for those in the top bracket. Luxon was asked on Q+A last month by host Jack Tame should National come into power, why a person who earns almost half a million dollars annually would need a tax cut of $18,000 a year.

"What we're talking about here is saying we have inflation in our economy, that is the number one problem that we have to deal with in New Zealand... we're saying very simply, why don't we just lift the taxation thresholds today so that everyone doesn't get caught in tax brackets?" Luxon said.