11 Dec 2023

Watch: PM Christopher Luxon speaks after Cabinet meeting

4:00 pm on 11 December 2023

Prime Minister Christopher Luxon and Workplace Relations and Safety Minister Brooke van Velden have confirmed the government's commitments to repeal fair pay agreements by Christmas and extend the availability of 90-day trial periods

It comes as the government continues on its plan to continue to progress through the ceremonial business of Parliament, while also moving ahead with actions on its 100-day plan.

"A big focus of our government's 100-day plan is on steps to help rebuild our economy and in particular to back the belief that if you work hard you should be able to get ahead in this country, and that is a quintessential New Zealand promise that has been broken these past few years," Luxon said at Monday's post-Cabinet briefing.

"A strong economy is how we end the cost of living crisis, it is also how we get to afford to invest in the public services that matter so much to all of us like world-class healthcare, education, and policing that keeps our community safe."

Luxon said small and medium enterprises powered the country, but the previous government made hiring staff "way too difficult and too expensive, and it disincentivised employers from taking risks".

"We want to make it easier for Kiwis to find their first job, we want to make it easier for Kiwis to find their next job, we want to make it easier for Kiwis to get off the benefit and move into work, because we believe if you can work, you should. You should work."

Van Velden said she today could "confirm that the government is delivering on its commitments to repeal fair pay agreements by Christmas, and extend the availability of 90-day trial periods for all employers".

ACT Deputy Leader Brooke van Velden

Brooke van Velden Photo: RNZ / Cole Eastham-Farrelly

"I am proud to say we are doing what New Zealanders voted for, to bring about real change. As a government we are focused on boosting productivity, becoming more competitive and creating a healthy economy. That's why we are preventing more bureaucracy from being piled on businesses, and backing them to grow."

She said it was in the best interests of employers and employees to appoint the right person for the job, and by adopting ACT MP Todd Stephenson's Member's Bill on 90-day trials, the government can progress quickly to "give certainty to businesses ... without the risk of a costly dismissal process".

The 90-day trials would not affect other aspects of employment relations like the requirement to act in good faith or pay, conditions, leave or health and safety, she said.

Fair Pay Agreements would have undermined the flexible labour market "which has been a pillar of New Zealand's economic success for the past three decades", van Velden said.

"These agreements were a blunt tool that could be initiated by a union and a small number of employees, yet they applied to every employee and every employer within coverage."

She says it would have added costs to businesses, whether they could afford it or not.

"There are already ways for employees and unions representing their members to negotiation terms and conditions."

"Repealing the legislation will have no impact on the current employment terms for workers because no fair pay agreements have been finalised, to date."

Luxon said a core belief of the coalition government was that when businesses thrive, the economy thrives, "and it's only actually with a strong economy that we can lift wages, that we can create opportunities and we can help New Zealanders get ahead".


After his comments this morning that immigration settings were "way too loose", Luxon said that was about having had the borders shut down then moving to it being "released very very quickly, with not enough checks and balances in place, and as a result we've ended up with 118,000 net migration".

"We want immigration to this country, we want the best and the brightest to be able to come here, we want skilled workers to be able to come here, but we've got to make sure that is linked up to an economic agenda where we've got genuine skills shortages."

He said it was about making sure there is rigour in application of inviting migrants to the country, but "when you've got 60,000 more people on an unemployment benefit at a time of relatively low unemployment and lots of worker shortages, we've got to work much much harder about getting people off welfare and into work."

He pointed to the decision not to put nurses on the immigration green list despite New Zealand being 4500 nurses short.

"It was too slow and it was too restrictive for a period of time but now you've got the complete opposite where there's actually not enough checks and balances on the accredited work programme, and that's what we've got to put back in place again."

Asked if the government would look to set a long-term migration plan or strategy with a cap, Luxon says it's tempting to put a number on it, but actually no government can realistically do that.

"With our economic cycles being quite variable, the skills shortages that we need, it's a very dymanic sort of setup. All I'm foreshadwing to you is that actually the current levels of 118,000 net migration are not sustainable for New Zealand in the long term.

"We have to work harder at getting people off welfare into work, and using the 60,000 people who actually want to work, and should be working working, and we should make sure that immigration is very very tightly linked to our economic agenda and the vacancies that we have and the gaps that we have."


Luxon said it was good to see MBIE get on top of the leak of the Cabinet paper last week proactively.

He would not call the second leak - of a Treasury paper on the decision to not do regulatory impact statements on pieces of legislation that are being repealed - a "big leak" because it was information that would have been released anyway.

Asked if the leaks showed malicious intent, he said he and his government had found and commented on "incredible professionalism" across the public service.

"In all of my interactions with the public service, we see incredible people who are deeply professional, deeply focused on delivering for New Zealand and New Zealanders ... I think we should be very proud of the public service."

He said he expected the public service to be politically neutral but that he did not care about the leaks and the government needed to keep moving forwards.

While he had been "super impressed" by the public service, he did not think they were well directed by the previous government and there was "more clarity, I'd say to you, than any previous government" about what his planned to do.

Trade and foreign policy

Asked about foreign policy, Luxon said he China-US relationship had not been a priority for the government in its first two weeks and New Zealand has its own independent foreign policy.

He said he wanted to see a much deeper trading relationship with Singapore particularly, and there's a number of other ways that trade can be turned on with India.

"We are up for all of those opportunities but you've got to be out there hustling, building relationships, thinking about the opportunities and how they might be best presented."

He confirmed Todd McClay will be visiting India before Christmas and will meet with his counterpart there.

Leader of the House Chris Bishop confirmed a fortnight ago this would include putting Parliament into urgency to pass four bills repealing previous government policies through all stages, and progressing the reintroduction of 90-day trials to all businesses to the select committee stage, all by Christmas.

The projects up for repeal or cancellation included the Reserve Bank's employment mandate, Fair Pay Agreements, the replacements for the Resource Management ACT, and the clean car discount or ute tax.

Luxon this morning also spoke about the need to better control net migration, saying Labour had kept the borders closed when employers were looking for workers, then "opened the floodgates" as the economy started to slow.

It followed news that Australia's government was set to unveil a new migration strategy to help address pressures on housing and infrastructure. The strategy was unveiled this afternoon.

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