Rein it in before it’s too late!

Opposition leader Christopher Luxon believes spending half a billion dollars centralising the health system and almost a billion on Three Waters, for example, is wasteful, contributes to inflation and makes it tougher for Kiwis to get ahead. Photo Engineering NZ
  • Christopher Luxon is National Party leader and the MP for Botany

It’s great to be back at Parliament for 2022 with our hard-working National Party team.

We’re re-charged and ready to continue to hold the Labour Government to account and focus on the issues that matter to Kiwis.

Over the Christmas break I spent quality time with my family and friends and I hope you all had the chance to do the same. I particularly enjoyed catching up with the Botany community at a family picnic day in Barry Curtis Park in early January, before travelling down the country to meet people and hear their views.

One of the biggest issues impacting many people in this country is inflation and the cost of living crisis. The rate of inflation is the highest it’s been in 30 years at 5.9 per cent, which means living costs are reaching an all-time high for Kiwis.

Wages are trailing well behind at only 2.4 per cent, so New Zealanders are effectively getting poorer.

This means Kiwis have fewer choices and need to make tough decisions. Families will need to decide what expenses are priorities for their household and how they will pay for things like school uniforms, stationery and all the other essential living costs such as fuel, rent and food.

One of the biggest drivers of this shift is a 68 per cent increase in government spending. Big spending pushes inflation higher, hitting us in the pocket twice through the inflation effect and forcing the Reserve Bank to continue hiking up interest rates, higher than would otherwise be necessary.

The Government also announced it would raise the minimum wage, which it has only had to do to keep up with the cost of living crisis it has created. It’s no coincidence that the increase is six per cent – almost exactly the same as inflation over the last 12 months. Despite this significant increase, minimum wage earners will be no better off than they were a year ago.

When faced with the economic scenario we have before us, it becomes really important to make decisions about the nice-to-do stuff and the necessity stuff – just like anyone does in their own household or business. A quick fix to alleviate the pressure would be axing the Auckland Regional Fuel Tax.

Petrol has just hit $3 a litre in Auckland. As inflation goes up, GST and all other tax intakes go up too. The regional fuel tax has raised over $500 million yet only half has been spent on roading projects. If this was removed immediately, it would give some much-needed breathing space in family budgets.

The Prime Minister and Deputy Prime Minister Grant Robertson will say this is an international problem and this is happening all around the world, but that doesn’t cut it. Australia has delivered in the same time a 3.5 per cent inflation increase whereas we are almost double that.

National knows we need to spend money, but in a targeted way that is beneficial for everyone. We encourage the Government to rethink their budget and act swiftly by focusing on the quality of spending and to be crystal clear about the outcomes. Spending half a billion dollars centralising the health system and almost a billion on Three Waters, for example, is wasteful, contributes to inflation and makes it tougher for Kiwis to get ahead.

The message is simple: the Government needs to rein in spending.