Christopher Luxon says National will consider changes to KiwiSaver policy ahead of the election while making his lines clear on immigration — telling businesses he would be choosing "social stability" over their bottom lines.
Luxon used a pre-Budget speech in Auckland today to signal his party was considering a suite of reforms to the retirement savings scheme.
"Some commentators have recently recommended a further set of changes to support the long-term health of the scheme, several of which have also been recommended in the past by the Retirement Commissioner," he said to a business audience.
"National is considering those changes.
"We'll have more to say on our KiwiSaver policy soon."
The National Party has already pledged that if re-elected at November's election, it would lift default employer contribution rates.
Speaking as Prime Minister, Luxon also revealed new details about how the Government would spend money in this year's Budget, which would be released on May 28.
Emails revealed Christopher Luxon and Winston Peters butted heads over New Zealand’s Iran war stance. (Source: 1News)
He said Finance Minister Nicola Willis would be keeping a tighter lid on new day-to-day operational spending than earlier announced.
Luxon confirmed the net operating spending package would be $2.1 billion, about $300 million under the $2.4 billion allowance set in December's Budget Policy Statement.
He said it was the third year running that the Government had achieved savings across its agencies despite the ongoing fuel crisis. Asked how he would achieve those savings, Luxon said there would be further details in the Budget itself.
"We've been working really assiduously to move money from the back office to the front line services, and that's been redirecting the money that we're spending."
He would not be drawn on whether it meant there would be further public service job losses and cuts within agencies. "I expect, as I would in any other enterprise across New Zealand, that actually every dollar is being deployed optimally."
Meanwhile, the capital package would be a net $5.7 billion, larger than previously signalled. Luxon said spending would go to defence, infrastructure, schools and hospitals.
Luxon draws lines on immigration
On social cohesion, the Prime Minister had a direct message on immigration.
He said New Zealanders should expect "careful policy" on immigration from the National Party before the election. Luxon brought up what he described as "failed" immigration policies from North America and Europe in his speech.
"Failed immigration policies in Europe and North America have also stoked a politics of division online. Despite prudent policies and the natural advantages of geography, immigration now seems to be an emerging political issue in New Zealand, too.
New Zealand First deputy leader Shane Jones says parliamentary colleagues have suggested he tones down his public comments but he maintains he gets "cut-through" by using hyperbole. (Source: 1News)
"Holding our society together under those pressures will be challenging," he said.
Coalition partner NZ First has been agitating on the issue for months amid its opposition to the Government's India free trade agreement.
Luxon added today: "My message to the business community is that when it comes to immigration, when faced with a choice between social stability and your bottom line, I will choose the former every single time."
He said his approach would continue to prioritise "skilled, not unskilled" migrants, with higher English language requirements, tougher enforcement and tougher penalties.
The agreement means Indian exports will have 100% duty-free access to the NZ market. (Source: 1News)
He also defended migrants in his own electorate as hard-working community members.
"Kiwis who deserve better than being unfairly and unreasonably vilified," Luxon said.
"But that only works when we have a smart, targeted, and fair immigration system, that serves New Zealand’s interests.
"It’s worth acknowledging that at least some of the political fracturing evident in Europe in recent years is the result of politicians refusing to implement the preference of their voters on immigration."
PM frames Budget around four pillars
Luxon said New Zealand could no longer rely on its geographic isolation for protection, unveiling national security-driven plans and an election-year policy platform.
"This country has a fantastic future, but we've got to build a stronger homeland here in New Zealand," he told media.
He framed Budget 2026 around four pillars — international security, energy independence, social cohesion and financial security — arguing the country had for too long assumed an ocean and a quiet reputation were enough.
The PM revealed in his speech that the net operating package had come in below the $2.4 billion allowance set in the Budget Policy Statement in December.
"Responding to the current fuel crisis – a crisis of national resilience and economic security – through more spending would risk leaving New Zealand even more exposed.
"In that spirit, I can confirm that the Minister of Finance will once again keep new spending in the Budget below the operating allowance previously set in the Budget Policy Statement.
"This year I’m pleased to say that the net operating package in the Budget will be $2.1 billion, or around $300 million smaller than the $2.4 billion allowance set in December, despite the recent crisis.
"That’s achievable because, while we continue to invest in essential services, like health and education, for the third year running we have been able to achieve significant savings," the Prime Minister said in the pre-Budget speech.
He said recent crises acted as a "timely reminder" that a lot of money will need to be spent on infrastructure, defence, and other capital projects in the coming years.
"This year’s capital package will be larger than originally planned, at a net $5.7 billion. That doesn’t reflect a permanently higher rate of borrowing – we’ll need to get the balance right in the years ahead, as we rebuild our fiscal buffers," he said.
"To build modern and resilient infrastructure able to withstand an increasingly volatile world. To develop a defence force, which is fighting-fit, capable of keeping Kiwis safe and safeguarding our region from malign interference. And to invest in the schools and hospitals New Zealanders rely on to receive modern, responsive public services."
Luxon said his Government remained committed to returning the books to surplus by 2028/29 - using an OBEGALx measure - and putting debt on a downward path.
The PM described the world as moving from one ordered by rules to one ordered by power, where "stronger nations do as they please, and smaller countries have to adjust."
He cited Russia's invasion of Ukraine and China's expanding influence in the Indo-Pacific, and said the United States, which had supported the global order for 80 years, was now focused on its own interests.
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