Hipkins targets Luxon's leadership woes while unveiling AI support for small business

Chris Hipkins arrived in Rotorua with a political gift wrapped in his opponent's own words. Two weeks earlier, Prime Minister Christopher Luxon had told local business owners they needed to "be adult" and shed their "parent-child mentality" of expecting government support. The remark, first reported by the Rotorua Daily Post, had landed badly—critics called it patronising and out of touch. Luxon apologised. Now Hipkins was here to drive the point home, and to announce Labour's answer to what he saw as the government's dismissal of small business concerns.

The Labour leader's message was direct: his party wanted to back small operators; the current government talked down to them. He noted that 97 percent of New Zealand businesses were small, calling them the "engine room" of the economy. They deserved real support, he said, not lectures. Labour's policy package, unveiled in Rotorua, included $2 million in annual funding for an AI small business fund, an expansion of the AI Advisory pilot to $3 million, and a $4 million annual increase to the Founder and Startup Support Programme. The total commitment came to $9 million. Hipkins framed artificial intelligence as a tool that could help smaller operators close the productivity gap with larger competitors and grow within New Zealand.

Dan Rosewarne, Labour's small business spokesman, elaborated on the thinking. Starting a business required more than a good idea, he said. Founders needed advice, guidance on building teams, and access to investment capital. The expanded Founder and Startup Support Programme was designed to move that needle—to help more people turn ideas into viable enterprises. The AI funding, similarly, aimed to level a playing field where small businesses often lacked the resources to adopt new technology that their larger rivals could afford.

But Hipkins had come to Rotorua for more than policy announcements. The National Party was in visible turmoil. Speculation had mounted that Luxon did not have the full backing of his own caucus and might face a leadership challenge. When media asked Hipkins about it, he seized the opening. "Once again, the National Party are busy fighting amongst themselves rather than tackling the issues that New Zealanders want to see them focused on," he said. Businesses were going into liquidation, he noted, and the government's energy was consumed by internal conflict.

Asked whether a change in National's leadership would improve Labour's electoral prospects, Hipkins argued the problem ran deeper than personnel. "It doesn't matter who leads the National Party," he said. "The National Party can only offer more of the same." He pointed to what he described as rising unemployment, business failures, and a shrinking economy—challenges that would confront any successor to Luxon. No change at the top, he suggested, could hide that record.

Luxon, meanwhile, was in damage-control mode. He posted on social media that division and disunity were a distraction with only 90 days until the election, and that the turmoil was unfair to New Zealanders and to National candidates and volunteers. He announced an urgent in-person caucus meeting in Wellington for the following morning. When he landed at Wellington Airport, he declined to answer questions about whether he would resign or whether he retained caucus support. He would address it tomorrow, he said.

The timing was brutal for the government. Labour was on the campaign trail offering concrete support for small business—$9 million in new funding, specific programs, a vision of partnership rather than paternalism. National was consumed by questions about whether its leader could survive the week. Hipkins had not invented the chaos; he had simply shown up to remind voters it was happening, and to offer an alternative.