PM signals major Indo-Pacific pivot to counter ‘rupturing’ global order

Prime Minister Christopher Luxon has signalled a decisive shift in New Zealand’s foreignand economic outlook, placing the Indo-Pacific region at the centre of Aotearoa’s future strategy.

Speaking at the Auckland Business Chamber during his 2026 State of the Nation address on Monday, Luxon warned the global “rules-based system is rupturing big time”.

He says this is forcing countries like New Zealand to rethink how they protect prosperity and security.

Luxon outlined three "big shifts" he believes Aotearoa must make to navigate growing global uncertainty, competition, and security risks.

“Previously, we could count on countries respecting the UN Charter, the law of the sea, and the rules of global trade. But in an age of sharper competition, we're seeing a passion of countries respecting international law only when it suits them, and ignoring the rules when it doesn't,” Luxon says.

He said this reality makes Aotearoa’s geographic position in the Indo-Pacific more important than ever.

The Prime Minister pointed to last year’s ASEAN summit where New Zealand upgraded relations to a Comprehensive Strategic Partnership (CSP) as a key step in positioning Aotearoa as a connector between the Pacific and Asia.

With growing attention on the Pacific from major powers such as the United States and China, Luxon said long-standing foreign policy approaches are being tested.

Recent Lowy Institute analysis has argued that the Pacific’s "friends to all" stance many no longer be sustainable in an increasingly competitive region.

Prime Minister Christopher Luxon in Kuala Lumpur, Malaysia, on the final day of the 47th Association of Southeast Asian Nations (ASEAN) summit. Photo/PMN News/Ala Vailala

Luxon’s second shift focuses on security, saying national security can no longer be separated from economic protection.

He warned of rising risks from economic coercion, cyber attacks, foreign interference and organised crime, citing regional vulnerabilities highlighted by Lowy Institute research.

The study found existing regional security hubs like the Pacific Fusion Centre lack the authority to handle classified intelligence. It adds this leaves countries exposed to cyber threats and covert influence.

Lowy also points to transnational crime, including the seizure of four tonnes of methamphetamine in Fiji, as evidence that criminals are exploiting gaps in regional governance.

“Governments need to protect their people and their assets against economic coercion, foreign interference, cyber attacks and terrorism,” Luxon says. “In the Indo-Pacific region, our region, there's a rising risk of a dangerous miscalculation. A country can't have prosperity without security, not less when the tools of commerce themselves require protection.”

Luxon referenced last year’s tariff shocks and global uncertainty, which he said showed how quickly economic recovery can be derailed.

Prime Minister Christopher Luxon points to last year’s tariff shocks and global instability as a reminder of how fragile economic recovery can be. Photo/File

He signalled continued budget restraint, saying Aotearoa must get its finances in order to build long-term resilience.

“In the middle of last year, you'll remember when emerging green shoots were rapidly cut down by tariff shocks and global uncertainty, it felt like we were back at square one. That period was difficult, especially here in Auckland, but I remain of the view that we got the balance right,” Luxon says.

“The bottom line is New Zealand needs to get its finances in order if it is to achieve a long-term improvement in its economic prospects. That's why there'll be more savings in this year's budget and no room for extravagant election promises.”