6 Sep 2023

Chris Hipkins again aims to position Labour as 'fiscally prudent' in pitch to business community

8:53 pm on 6 September 2023
Prime Minister Chris Hipkins

Photo: RNZ / Angus Dreaver

Labour leader Chris Hipkins has made a pitch to business for why his party should be given the chance to govern for a third term, defending the state of the economy and Labour's plans for the future.

"My vision is for New Zealand to be the best and most successful little country in the world, and I believe we can be," Hipkins said.

Delivering the Bloomberg annual address in Auckland, Hipkins talked up the government's Covid-19 response as one of the best in the world. But in the discussion afterwards, he admitted other areas of government could now do with the same level of urgency.

His speech was not free of politics, calling out - while not naming - National for its tax cut proposal and climate change policy. He also offered an olive branch as leader of a party often painted as less business friendly than National, saying if Labour won re-election, business would "have a seat at the table".

Hipkins presented an optimistic view, saying New Zealand is "bursting with opportunity and talent... and while the current period is a tough one for many businesses [is] confident there are better days ahead".

"It's important we don't lose sight of our strengths, because those strengths form the foundation of a strong recovery," he told the audience.

In the face of accusations Labour has mismanaged the economy, Hipkins pointed to its growth since Covid-19, the low rate of unemployment and progress made with free trade deals.

"Add to this our success in reducing both child poverty and climate emissions over the last three years and you'd be forgiven for thinking everything's rosy.

"Of course it's not... in fact it's very tough," he conceded.

"But it's hard everywhere at the moment, and New Zealand is particularly exposed to some headwinds due to China's downturn."

Hipkins mounted the argument Labour would be the more responsible manager of the economy, when lined up against National and ACT.

"In a somewhat unusual reversal of positions, it's actually the Labour Party promising to be the more fiscally prudent this election," he said.

"I don't see now as the time for big and unaffordable tax cuts, which will add to inflation. It's also not right to be selling more than $5 billion of Kiwi assets off every year to do this."

Hipkins has already acknowledged income tax thresholds have not risen in line with wages so people were ending up in higher tax brackets, and was not ruling some movement in a third term. However, he said much more pressing demands for investment in crucial public services should take priority.

"The government's books are going to come under an enormous amount of pressure in the next three year term and we have to actually make sure that we're supporting people through that."

He also highlighted the demand from global consumers "in a market looking for climate leaders" and that being a "fast follower... could see us lose our competitive advantage".

"Failure to act on climate change is not only a moral failure, but economic sabotage in the new global economy.

"We won't turn our back on the climate crisis, or kick it to touch, but instead seize the economic opportunities inherent in it," Hipkins said.

On Covid, he said the Labour government was experiencing what was common in many other parts of the world.

"Most incumbent governments that have governed through the Covid-19 period have found that it gets a bit difficult the further away from the pandemic that you're getting... but I still believe we've got a very positive story to tell."

The pandemic response was "the largest undertaking any new New Zealand government has been asked to do in a generation", and one that was done "very successfully".

"If I think about some of the things that we did, and the timeframes in which we did them, they were spectacular examples of getting things done very, very quickly.

"So I think we need to take a bit of that sense of urgency to some of the other challenges that we're facing as a country."

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