Prime Minister Christopher Luxon has told his ministers to take any action necessary to improve competition in critical sectors such as banking, energy, and groceries.
In a speech outlining his 2025 economic growth plan, the National Party leader said “nothing is off the table” when it comes to tackling uncompetitive industries.
“Too often we see reports of Kiwis getting a raw deal because of a lack of competition. In banking, energy, retail, construction and groceries. I’m up for action,” he said.
Radical reforms on the table could include: forcing the supermarkets to divest their wholesale businesses, splitting the big energy companies into separate generation and retail arms, and slapping big banks with an excess profit tax.
Luxon didn’t specify any individual reforms, but said he agreed with the OECD’s view that “insufficient competition was an important factor” in New Zealand’s productivity problems.
After a year of deep recession, the Prime Minister wants to demonstrate to the public his government has a plan to guide the economy out of the slump and into a brighter future.
Last week, he gave Finance Minister Nicola Willis an additional portfolio, Economic Growth, which formalised her existing role as the Coalition’s chief economics minister.
On Thursday, in his first speech of the year, Luxon promised to deliver a range of reforms that would not just dig NZ out of recession but increase its potential growth rate — which is currently thought to be about 2.4%.
“I’m here today to talk about the economy; and almost nothing else,” he told attendees at a political rally in Auckland. “It’s been a massive year of change and reform and I am confident we are now on the road to recovery. But recovery isn’t enough. We have to go for growth”.
His plan includes well-signalled policy changes such as reforming the Resource Management Act, deregulating health and safety rules, and allowing more mining in New Zealand. But he also revealed two new policies.
Foreign investment magnet
Firstly, a new agency called Invest NZ will be established to attract and support foreign investors who want to pump capital into New Zealand. It will initially be part of NZ Trade and Enterprise, before eventually being spun out into a standalone agency.
The idea is modelled on similar agencies in Ireland and Singapore which help connect international investors with opportunities, government grants, and local expertise to facilitate investments.
It will be run by Trade (and now Investment) Minister Todd McClay who already shared some responsibility for attracting foreign investment. McLay said the new agency would “streamline the investment process and provide tailored support to foreign investors”.
The government hopes offshore investors will want to put their money into banking, road, renewable energy, and manufacturing projects in New Zealand.
Secondly, Luxon announced the Crown Research Institutes would be reformed into four Public Research Organisations focused on bio-economy, earth sciences, health and forensic sciences, and advanced technology.
Judith Collins, the Science, Innovation and Technology Minister, said this would help to maximise the value of $1.2 billion in government funding that goes into the science sector each year.
Luxon said in his speech he wanted to see more commercialisation of research being done in these institutes and greater financial incentives for the scientists developing new technologies.
46 Comments
Oi ! ... Luxon , what about healthcare .... we tip tens of $ billions annually into a British NHS designed system , and we're getting poor returns on it ...
... why aren't you looking at re-designing healthcare in NZ , to add extra competition in there , and to give Kiwis some ability to choose , rather than the current take it or leave it approach ...
ACC levies would never cover the bills that come with healthcare. Health is, and always will be, a black hole for money and is the precise reason why successive governments don't want to touch it with a 10ft barge pole. How do you try and get KPI's for an area (health) with growing demand, lack of infrastructure, the need for big spend on new hospitals let alone cost of care, and an ageing population? the answer they seem to b going with is: Finally bow to a well needed increase in pay for healthcare workers, try maintain the hospitals they have, and kick the can until the population bulge is no longer a problem by the slowly lessening numbers. So sad.
They've gotten rid of the Health Minister that was actually experienced (a former GP, assistant professor for Harvard Medical school). Replaced with Simeon Brown, a former BNZ banker and openly anti-abortion
I assume Reti was getting in the way of wide scale privatization of our health care sector, and thus "competition".
We already have a large private health system due to the decade-long under investment in what used to be a very good public system (presumably to keep taxes down over that period, which always seems like an attractive short-term option). Wealthy Kiwis have plenty of choice, but tough tiddy if you are not well off enough to afford insurance.
The last thing we want is a health system which resembles that of USA, the most inefficient system in the world.
This is already done by NZTE... but I guess the existing unit is called 'Invest New Zealand' and this new one will be 'Invest NZ', so it will be much better...
https://www.nzte.govt.nz/page/invest-or-raise-capital-with-nzte
Dan - get it right. People don't 'pump capital in' - thery put a foot in door, so they can take proxy out. Is that so difficult to understand? And nobody 'creates' wealth - our whole edifice is based on draw-down.
"I’m here today to talk about the economy; and almost nothing else,"
Yep. Sums this lot up. Short-term and ignorant. And they will fail - physics trumps ideology, every time.
Thank you for your in-depth appraisal.
Unfortunately, Dan seems to write to your level; to the kind of person who cannot think up his own moniker.
Anyone can google the Limits to Growth graph - its variants and updates. Anyone can see the multiple inflection-points happening NOW.
Which is the background atop which this article should have been painted. Tells us Luxon - and Trump, for that matter - are promising something they cannot deliver; their horse has bolted.
They'll build a private road to their newly built mega-bolthole community, with solar panels and wind turbines (positioned out of sight, of course) for power. Hey presto, foreign infrastructure investment!
As for the banking? They may open an expense account or two to pay the workers.
thats true, but look at Ireland, almost all major industry is foreign, and it pays alot of wages, alot of taxes (even at low rates) and invests in alot of infrastructure to support foreign owned growth. I'm not sure how NZ could pull that off however, we dont yeild access to any great market like Ireland does.
He can't even stop the party giving sweet land rezoning deals to donors. Probably the biggest barrier to setting up a big box store is finding land which isn't banked by competing duopolies or National MPs' mates.
Politicians should only flap their mouths about anything once they've got some real change underway. Every few years there is another enquiry into competition in groceries or fuel and nothing ever comes of it. If they really wanted to they could pass a bill within a matter of weeks under urgency; funny how fast things move when your donors are benefiting tens of millions of dollars.
"Radical reforms on the table could include: forcing the supermarkets to divest their wholesale businesses, splitting the big energy companies into separate generation and retail arms, and slapping big banks with an excess profit tax."
Why do I feel like these are going to come with a Monkeys Paw style twist?
Luxon: "It's not that public safety isn't important ... and it's not that health or education aren't important ... but as far as I'm concerned, going for growth is without a doubt priority number one."
He wasn't talking like that pre-election was he? He is speed running the dismantling of the government.
The likely outcome. Small gains to the few from huge costs to everyone: https://newsroom.co.nz/2025/01/22/govt-to-weaken-hauraki-gulf-protectio…
He is sorted though, so will probably retire somewhere nice overseas. Somewhere that has good healthcare.
Supermarkets; We need competition but we got a commissioner. Sigh.
Their stranglehold hurts supplies (especially potential suppliers) not just consumers.
Here is an idea for Mr Luxon to pick up off the table.
Break up the Duopoly. Maximum of fifty outlets in each group. (NW currently about 250). Give em a year and they can decide how best to do it. You would see some interesting stuff from the new independents.
Innovation will thrive in food production. Smaller outfits will blossom. Variety and local sites will become commonplace. My personal favourite is Gogigi. An Indian supermaket with I think six outlets.
Remember these huge outfits are not efficient. They make money from control.
In my insurer supply chain industry there is at least a billion per year being left on the table and funneled off over seas in profits or expenses due to the monopolistic practices of the current insurance monopoly / duopoly, whom exploit and suppress the local supplier rates to an extent that local supplier companies are being remunerated at 50% or less than that of US companies doing the same work.
That 50% that isn't going into kiwi businesses and kiwi employees pockets is also not going into local spending with all the wash down benefits that creates for the local business eco-system.
Rather than just focusing on exports etc I hope there is some focus on the lost revenue being caused by some of the highly concentrated industries we have here in NZ.
The government hopes offshore investors will want to put their money into banking, road, renewable energy, and manufacturing projects in New Zealand.
They will want a return on their investment. Why can the government not see that we need to establish and fund this ourselves instead of taking a short term gain of foreign investment for the longer term drain that is financial rentierism or economic extraction buy said foreign investors.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.