Luxon's headline-grabbing fortnight: Opportunity, small business, MMP

Christopher Luxon's leadership of the National Party is once again under question as a string of political controversies tests his ability to weather the scrutiny expected of a Prime Minister.

Luxon has called an urgent caucus meeting on his leadership for tomorrow morning, saying that the issue must come to a head at once ahead of November's election.

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Over roughly a fortnight, the PM hazily ruled out a potential coalition partner, apologised to small business owners, called his Foreign Minister's remarks "racist," and launched an MMP referendum policy on talkback radio that blindsided his own MPs.

Here is how it unfolded.

It started with the Opportunity Party, where at his post-Cabinet media conference on Monday, July 27, Luxon appeared to rule out any governing arrangement with TOP, which had been hovering just below the 5% threshold in a run of polls.

"Well, I'm just saying to you, they want to increase taxes," he responded. "We're a party of low tax. It wouldn't be surprising to any of you to say we don't think we want to do business with them ... we wouldn't be working with them."

He added: "When I look at the TOP policies, as I see them today, and in a very cursory glance, it looks like they just want to increase taxes — that's not what we want to do."

Luxon appeared to equivocate on his answer, telling reporters "we've got quite a long way to go to November 7th" before walking out of the press conference shortly after.

His office later confirmed to reporters that his comments served as a confirmation that National was ruling out going with Opportunity at the election.

Labour leader Chris Hipkins, speaking to media, said National looked rattled.

"It's clear that there was a lot of scrambling went on in the hour or two after that to figure out exactly what their position on it was," Hipkins said.

He added that he thought Luxon "got caught on the hoof and just made it up".

The bigger storm arrived that Wednesday when Foreign Minister and NZ First leader Winston Peters - responding to heckling from Chinese-born Green MP Lawrence Xu-Nan during a speech in the House - told him to leave the country.

"I know you just came here five minutes ago. Go back to your own country," Peters said.

"That's where they lie like a flatfish, but they don't lie like that here, all right? This is called democracy. This is called democracy, unlike what you're used to."

Peters characterised his comments as "defending New Zealand's democracy" and dismissed accusations of racism as "drivel."

China's embassy lodged formal diplomatic concerns with the Foreign Affairs Ministry, escalating the row into a matter involving New Zealand's largest trading partner.

Labour and the Greens called for Peters to be sacked as Foreign Minister. Asked if he thought Peters' comments were racist, Luxon said: "Yes, I do."

Despite that, the PM said he had confidence in Peters and wouldn't move to dismiss him.

"We're three months out from an election. Kiwis get to decide what happens next, and I just say to you, think very deeply about your vote," he said.

By the beginning of last week, a second controversy had caught up with Luxon, this one from a Rotorua Business Chamber event the previous Friday.

There, chamber chief executive Melanie Short had raised the challenge of businesses absorbing extra costs, asking "how long can we hang on?" Luxon's reply did not land.

"I think that's a negative view, to be honest," he told the room.

"If you're not retooling and radically disrupting your business, you ain't doing the job."

He drew on his corporate past, saying that as a chief executive based in North America "the last person I wanted to ever talk to as a CEO was the Government," and told the audience there was "a parent-child mentality" in Kiwi boardrooms.

On Monday afternoon, Luxon apologised for the remarks after originally standing by them in media interviews earlier that morning.

"I am sorry if my comments did not properly acknowledge the challenges that many small business owners are facing, and that I got that wrong," he said.

"I know many small business owners are doing it tough right now."

Luxon said he had reviewed the transcript before deciding to apologise. "I came in. I looked at the transcript. I thought, yeah, I could have expressed that better."

The following day, senior National ministers backed the apology while conceding the original remarks had stung.

Education Minister and speculated-about leadership contender Erica Stanford said the apology was necessary because the comments "caused a lot of hurt and upset among businesses who are doing it really tough."

"They've been hanging on with their fingernails for a number of years, and they stay up late at night, worried about having to pay their employees," Stanford told media.

"They are our people, and we back them."

Rotorua Business Chamber president Paul Ingram said the chamber welcomed the apology, but the "parent-child" line had not landed in a room full of resilient owners.

"I could hear a few groans and comments from behind me," Ingram said.

"It's a bit tough when you're already doing the very best you can."

Later in the week, former National leader Simon Bridges, now chief executive of the Auckland Business Chamber, used a NZ Herald opinion piece to say, "there are things Luxon doesn’t seem to understand about business and the economy in New Zealand."

Luxon has previously repeatedly drawn attention to his business and executive acumen as a strength while party leader and PM.

Last Wednesday brought bad economic news and a fresh line of attack.

Stats NZ figures showed unemployment had climbed to 5.6% in the June quarter, the highest in 11 years and worse than economists had forecast.

The same day, Luxon was defending his use of a Defence Force plane to fly from Whanganui to Auckland on July 23, after attending a National Party fundraising dinner.

“Look, I'm Prime Minister. I've got a busy job, I've got a big schedule," he said, The Post reported.

"Where I can't use a commercial flight, I'll use military assets - if and when it's appropriate."

Labour accused him of using the Air Force as a "personal taxi service" for campaigning.

Thursday, August 6, produced arguably the most chaotic episode of the fortnight.

Responding to questions on talkback radio, Luxon committed to holding a referendum on the MMP system if re-elected, a policy that appeared to catch his own MPs by surprise.

Luxon framed it as a routine check-in. "I actually think you know that is quite right to check in constitutionally and say, is this the system New Zealand you still want?" he said.

He tied the idea to his frustration with coalition management.

"I don't need some yahoo or numpty from some other party around that table," he said, but insisted there were no "numpties" among his current ministers.

In a social media post, Peters called the idea "inexplicable" and "a power grab."

Deputy leader Nicola Willis was unable to confirm the policy had caucus endorsement, saying only that she understood these were views Luxon held.

Friday brought better news for National and Luxon as the latest Taxpayers Union-Curia poll showed Labour down several points.

The poll showed the party tumbling to its lowest vote share since December 2024, and the existing National-led coalition in a position to govern once again. But Luxon's party would still be down as compared to their position at the last general election.

By Sunday, National's campaign chair Simeon Brown was on Q+A batting away questions about caucus unease after what the programme called "another bruising week."

Pressed repeatedly by interviewer Jack Tame on whether any MPs thought National had a better chance without Luxon, Brown would not engage with the premise.

"He's an absolute asset to our campaign," Brown said. "He's our prime minister, and he's working every single day, getting out there, listening to New Zealanders."

The fortnight closed with another apology, this one directed inward.

Speaking to RNZ's Morning Report yesterday, Luxon acknowledged he had left colleagues exposed over the MMP announcement.

"I did feel sorry for my caucus colleagues because I was making the announcement on ZB, and then they're in front of media going across the tiles in Parliament," he said.

But he maintained it was "quite common" for party leaders to make captains' calls.

Stanford, again stepping up to defend her leader, told reporters Luxon was "not only a great leader but a great friend," Stuff reported.

"He's already done that, and also clearly today through the media made it clear that he apologises to us as well," she said. "And, you know, that's what good leaders do."