National leader Christopher Luxon clarifies stance on Government spending after previously calling for more business support

Christopher Luxon is criticising the Government for its pandemic spending calling much of it "wasteful" and "dumb". 

The National leader joined AM on Wednesday to discuss his Party's calls for a national inquiry into decisions the Reserve Bank of New Zealand took during the COVID-19 pandemic. Luxon said the inquiry should look into how a "tidal wave of cash" injected into the economy has caused the current cost of living crisis. 

"The Reserve Bank and the Government took unprecedented steps in 2020 and 2021 to pump money into the financial system," he said on Tuesday.

"The massive and ongoing monetary and fiscal response unleashed a tidal wave of cash into New Zealand's economy," 

But on Wednesday AM co-host Melissa Chan-Green questioned Luxon on his stance, pointing to a Facebook post from 2021 where he called for more support for businesses. 

Chan-Green asked whether he had changed his mind about extra support being needed. 

"No, we're really supportive of the COVID support for businesses," Luxon responded. "But what we're talking about in government spending is, there's a lot of dumb stuff happening. There's a lot of wasteful spending going on, there's a lot of spending with no outcomes. 

"So when you think about several billion dollars being spent on Three Waters when you spent close to $1b on restructuring health care when you think about $330 million merging TVNZ and Radio NZ, those are things that we just wouldn't be doing and we wouldn't be spending money on."

Luxon went on to slam the Government for its spending on healthcare saying even though billions of dollars have been spent on the industry "not a single health metric has improved in the last five years". 

"We're spending a lot of money on building up bureaucracy here in Wellington. We've added 14,000 more bureaucrats… that money should be spent on frontline nurses, doctors, teachers, ICU beds, other things," he said. 

"We've spent $50 to $60 billion on COVID, and we don't really have an upgraded healthcare system as a consequence of that. That's where our focus would be."

Luxon said the Government is too focused on spending announcements rather than actually getting things done. 

"It's about the fact this Government really confuses spending announcements with actually getting things done and actual outcomes and in the middle of something called delivery and implementation and execution," he told AM.

"There's a lot of money just being sprayed around at the moment, building bureaucracy, adding middle management, not in frontline services and we want to improve outcomes. 

The Reserve Bank has previously criticised suggestions the Government's COVID-19 spending is to blame for New Zealand's inflation. 

Reserve Bank Governor Adrian Orr told AM in May blaming Government for inflation was "too simplistic" and incorrect. 

"I think that's far too simplistic and in fact wrong in a sense," Orr said when asked whether his job was made harder by the Government's spending. 

"Government fiscal policies are both about long-term infrastructure and all of the challenges, it is about making sure the current level of services can be supplied. " 

The Government has also hit back at the suggestion, saying the current spike in inflation is because of supply constraints in the post-COVID economy and disruption from the war in Ukraine. 

Watch the full interview with Christopher Luxon above.