Luxon says Kiwis 'very clearly' see economy turning, defends Willis

Prime Minister Christopher Luxon has painted an optimistic picture heading into election year, saying "hopeful" New Zealanders are telling him they "very clearly" see a strengthening economy.

In an end-of-year interview with 1News Political Editor Maiki Sherman, the PM reflected on two years in office and defended Finance Minister Nicola Willis amid criticism of her handling of the economy and pushing out the return to surplus.

Watch the 1News Political Editor's interview with the PM on TVNZ+

Asked about his biggest achievement this year, Luxon pointed to getting the economy moving in the "right direction" and claimed Kiwis were feeling it ahead of election year.

"The Kiwis that I talk to every week are saying very clearly, look, we can see the economy strengthening. We can see things are turning and they are hopeful, and I can see that more New Zealanders are starting to feel that, and that's a good thing," he said.

"I want to make sure that's what happens over the course of the coming year."

This week's GDP data release for the September quarter will reveal more about the state of the economy and whether the Prime Minister is correct in his assessment.

Figures for the three months ending in June surprised many with a sharp 0.9% contraction, indicating lagging growth.

"It's been a really challenging time for New Zealand," Luxon said. "There's no doubt about it. As I've said this year, it's been a bit of a two-speed recovery. Of course, we'd love it to come through quicker, faster.

"For people, I'm aware that they've been through the mill with respect to Covid [and] they've been through a recession, which has been really difficult and challenging."

When asked if Willis would remain as finance minister heading into the election, Luxon said: "Absolutely."

He added: "We've dealt with some really challenging trading environments, and so she's doing a very good job and a very challenging set of circumstances, and working [her] way through it, I think, very, very well.

"I just see how hard she works. I see what she's been doing to get the spending under control, to be able to actually free up $44 billion."

A campaign against Willis was launched by the Taxpayers Union, a right-wing lobby group, last week, attacking her for not going further and faster on balancing the books.

Treasury's Half-Year Economic and Fiscal Update, due for release on Tuesday, will reveal the latest forecasts and show how much more it will take to return to surplus.

On housing, the PM dismissed Labour criticism over the number of builds, saying his government had reduced the state house waiting list by 5000 people and moved thousands out of emergency motel accommodation.

Luxon also reiterated Housing Minister Chris Bishop's call-out to renters, urging tenants to negotiate with landlords after hearing stories of people taking "$50 to $100 off a week".

"If you're someone out there in the world today who's renting a house, I'd just say to you, go back to your landlord, renegotiate your rates," he said.

"I've heard a lot of stories of New Zealanders who've done exactly that and taken $50 to $100 off a week off their rents, which is fantastic."

Regional data has suggested static or declining average rents in major centres.

Meanwhile, Luxon said a focus on the country's position globally has been his personal highlight of 2025, despite a year marked by economic challenges and job losses.

"For me personally, one of the big highlights is actually raising New Zealand's relevance internationally," Luxon said, pointing to work on a free trade deal with India and managing trade tensions with US President Donald Trump.

"They're all different personalities, and it's no different from your personal relationships and how you make friends.

"My job is actually to build a really strong relationship with everybody, and to make sure that we're registering with them, and I'm advancing New Zealand's interests.

"But it is really special, it's one of the things that's a real highlight of the job. Because there are leaders wrestling with many sort of the same challenges that I wrestle with. And actually, there can be quite good sessions where you are talking about, at a human level, at a very personal level, about what's going on for them as leaders as well."

When asked, the PM declined to rule out a Cabinet reshuffle early next year, saying he would make changes whenever needed rather than at set times.

"I don't feel obligated to do it at a certain time of the year. It's just about making sure I've got the right casting in place and the right people with the right challenge," he said.

When pressed on whether Bishop would remain in the portfolio, Luxon said he was "doing a great job" but repeated that he would always make changes if necessary.

"Everyone's performing well until I decide they're not," he said.

The PM also said he would announce the election date in the new year, saying it would give people clarity and allow the government to focus on governing.

"I actually think it does give people quite good clarity as to what is happening. It gives everyone certainty, and then we can get on with the business of governing," he said.

Luxon said he would make the decision over summer, taking time to "think through some of those issues".

When asked, the Prime Minister said he has not yet decided whether to attend Waitangi Day commemorations at Waitangi next year, saying he enjoyed visiting Ngāi Tahu last year and valued getting "a perspective beyond just Waitangi".

"Sometimes I feel Waitangi and all the drama and the soap opera that goes with it is counterproductive to what we're trying to do as a country," he said.

The PM said he had attended Waitangi in previous years in opposition and before entering politics, but would decide over summer whether to go.

Maiki Sherman's end-of-year interview with the PM - Watch on TVNZ+