Operating spending on new initiatives in the Budget will be $2.1 billion \u2013 about $300 million less than the $2.4b allowance set in December.<\/p>\n
\u201cWe are getting the books in order while continuing to invest in the essentials \u2013 health, education, defence, law and order and infrastructure. That requires ongoing reprioritisation, because the alternative is more borrowing or higher taxes \u2013 and ultimately a weaker economy,\u201d Luxon said.<\/p>\n
The Prime Minister confirmed the Government remained committed to returning the books to surplus by 2028\/29 and putting debt on a downward trajectory towards 40% of GDP.<\/p>\n
\u201cIt\u2019s not always just about the quantity of money you\u2019re spending, it\u2019s about how you spend that money that matters,\u201d he said to media after the speech.<\/p>\n
This year\u2019s Budget will be unveiled on May 28.<\/p>\n
In a wide-ranging speech on geopolitical tensions and New Zealand\u2019s place in the world, Luxon spoke about how unsettled the world is and forces in global politics that none of us can control.<\/p>\n
Prime Minister Christopher Luxon make a speech to BusinessNZ at the Pullman Hotel in Auckland, New Zealand on May 13, 2026. Photo \/ Jason Dorday<\/p>\n
\u201cBut here\u2019s what we can control: how prepared we are, how resilient we are and how well we stick together,\u201d he said to the 250 attendees.<\/p>\n
Immigration, energy security and strong bilateral relationships will be priorities for National, Luxon said.<\/p>\n
\u201cIn a more volatile world, some of our traditional friends and partners seem to be doing the same \u2013 forging new partnerships shaped by many of the values we hold dear, and their own support for the rules-based international order.<\/p>\n
\u201cThe multilateral values and institutions that have underpinned our prosperity may be under strain, but they haven\u2019t perished. We must evolve and remake them.\u201d<\/p>\n
\u2018Careful\u2019 immigration policy<\/p>\n
Immigration is fast becoming a major election issue.<\/p>\n
Luxon said National will have a \u201ccareful\u201d immigration policy heading into the election and he was aware immigration issues can fracture communities and social cohesion.<\/p>\n
\u201cMy 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.\u201d<\/p>\n
Speaking to media after the speech, Luxon said he has stepped into the immigration discussion because social cohesion around the world was breaking down.<\/p>\n
\u201cWhen you look at what are the drivers around the world, around what\u2019s driving lower levels of social cohesion and trust in institutions, a lot of it\u2019s coming back from immigration, globalisation, technology,\u201d he said.<\/p>\n
\u201cIn the context of immigration, the point I was trying to make is that we are a country that should be very proud of our immigrant community but equally, the reason it works in New Zealand, unlike it does in other countries, is because we have a smart, targeted and fair system.<\/p>\n
\u201cThese are Kiwis who have left everything they know, chosen to come to this country, they work incredibly hard, they send their kids to school, they don\u2019t go on welfare and they are fantastic Kiwis and they\u2019ve made a great contribution.\u201d<\/p>\n
And on energy independence: \u201cNew Zealand\u2019s energy vulnerability is no longer a theoretical risk; it is a live crisis on full display in the Strait of Hormuz every single day.<\/p>\n
\u201cOn too many occasions, private capital, eager to bolster domestic energy production, has been pushed to the sidelines by overzealous planners and politicians in recent years.<\/p>\n
\u201cSeveral high-profile projects are now getting underway, thanks to our reforms like fast-track, which I expect will continue to grow in popularity by leaps and bounds.<\/p>\n
\u201cThe reality is that when faced with energy shock after energy shock, it\u2019s very hard to justify backing the skink over the solar farm.\u201d<\/p>\n
In a hint of what\u2019s to come in the Budget, Luxon said it\u2019ll be about \u201csecuring New Zealand\u2019s future\u201d.<\/p>\n
On the allowance being $300m smaller than the $2.4b allowance set in December, he said it was achievable.<\/p>\n
\u201cWhile we continue to invest in essential services, like health and education, for the third year running, we have been able to achieve significant savings across Government.<\/p>\n
\u201cAt the same time, while we continue to prioritise a return to surplus, the recent crisis has acted as a timely reminder that significant levels of capital investment will be required in the coming years.\u201d<\/p>\n
Finance Minister Nicola Willis has repeatedly said she would retain a focus of \u201ctight control\u201d on spending and an operating allowance of $2.4b.<\/p>\n
Any spending will be on health, education, defence, law and order, with other departments likely to be told to find further \u201csavings\u201d.<\/p>\n
In a rare pre-budget leak, New Zealand First leader Winston Peters last week revealed the Government would scrap fees-free tertiary study for final year students.<\/p>\n