Watch: 'State of the nation is fragile', Christopher Luxon says

Christopher Luxon has set out his vision for the country in his first State of the Nation address as Prime Minister, promising to be "straight up" with Kiwis about the country's "fragile" situation.

He hit out at the previous "broken and distracted" Labour government, saying New Zealanders had been "badly let down".

"It tied down our economy with unnecessary regulation, and saw farmers and businesses as something to be sneered at rather than celebrated," Luxon said.

"It delivered schools where kids learn less than their parents - if they turn up to school at all.

"Hospitals that take longer to see patients, and then longer to treat them for serious illnesses, like cancer and heart disease.

"A justice system which had a deliberate strategy to empty New Zealand's prisons, even as violent crime soared.

"And an economy, where inflation crushed wages, even as Kiwis are left paying more and more tax to fund Labour's wasteful spending."

Throughout the speech, Luxon referred to "tough choices" and kept coming back to welfare dependency, pointing to the additional 70,000 now on a Jobseeker unemployment benefit compared to 2017.

"That's like adding every man, woman and child in Napier onto the Jobseeker benefit in just six years."

Luxon's government would be targeting those who had been on welfare for many years, he said.

"We'll do everything we can to help people into work, but if they don't play ball, the free ride is over."

After laying out his vision for New Zealand's place in the Pacific, and what his government had already achieved, he returned to the issue of welfare.

"I won't apologise for making tough choices to support young people off welfare and into work, because 24 years languishing on welfare means no hope. It means no opportunity. It means no dignity from work."

This would require "tough love", he said.

"All Kiwis, of course, have a right to support when times are tough. But with that right also comes responsibility. The responsibility to look for a job, or to train for new opportunities.

"And if you don't - make no mistake - there will be consequences. Our government will support you - but there will be sanctions if you don't take that support seriously.

"Now that won't be popular with everyone - but we will do it, because I am not prepared to write off a whole generation of young Kiwis."

Conditions were "rough" due to the "economic mess" left behind by the Labour government, and New Zealanders were "voting with their feet", with a record net 44,500 New Zealanders leaving the country last year, he said.

"It is only through a strong economy that we can end the cost of living crisis, lift incomes and give those Kiwis a reason to stay in New Zealand.

"It is worth being straight with each other about the size of the challenge, because I know we can be so much better than this."

Luxon also highlighted changes to planning and resource consent laws, saying New Zealand had become an "obstruction economy... where doing anything or building anything means mountains of paperwork and years of dithering and delay".

There was a fine line to be walked between protecting the environment and building for the future, he said, repeating that "tough choices" needed to be made to improve the country's economic performance in the long term.

"That means a return to the orthodoxy of tight budgets, careful stewardship of public money, and a determined focus to keep or return the books to surplus."

Speaking to reporters after the speech, Luxon criticised the "big-budget, big-spending promises ... fiscals cliffs and financial chicanery" of the previous government, specifically mentioning major transport projects such as Get Wellington Moving and Auckland light rail.

Luxon said that the government was investigating private funding options for major transport projects.