(Bloomberg) -- New Zealand’s new government has a “single-minded” focus on slowing inflation so that interest rates can begin to fall, Prime Minister Christopher Luxon said in an interview during his first official visit abroad since taking office.

“My government in the first four weeks has been incredibly focused in dealing with the number one job that we have which is to tackle inflation and get it down below 3% again,” Luxon said in an interview with Bloomberg Television in Sydney on Wednesday. “So we can lower inflation, lower interest rates, and keep the economy growing.”

The Reserve Bank last month delivered an unexpectedly hawkish interest-rate outlook, signaling an increased risk of a hike and ruling out any cuts until 2025. The RBNZ highlighted mounting concerns that a wave of new migrants is pushing up rents and house prices.

“We’re in a place we’ve had 129,000 net migration into New Zealand over the last year,” Luxon said. 

“It’s an elevated level of immigration and something that I’d say is not sustainable ultimately,” he said. “We want to make sure immigration rules are consistent with our economic agenda but also that we have the infrastructure in place to support it.”

New Zealand has faced similar challenges to nations like Australia and Canada that have seen strong immigration and sticky inflation. Consumer prices rose 5.6% in the year through September and the RBNZ doesn’t see it returning to the 1-3% band it targets until the second half of 2024.

Luxon, in his first official trip abroad since being sworn in on Nov. 27, is meeting with his Australian counterpart Anthony Albanese, seeking to deepen engagement with New Zealand’s closest partner and only ally. 

“We really want to make sure there’s peace and stability in the broader Indo-Pacific region and you know it’s becoming an increasingly contested and competitive space in recent years,” he said. “It’s in all on our interest to make sure we maintain peace and stability.

Asked whether his new administration would look at joining the Aukus alliance with the US, UK and Australia as China’s regional sway increases, Luxon was non-committal.

“We’ll have those conversations and continue to need to understand where it’s going and what the opportunities may or may not be for New Zealand,” he said. 

Still, the new prime minister sought to deliver an optimistic outlook for his small trading nation of 5 million people.

“My message is very clear, New Zealand is under new management, we’re open for business, and we’re out in the world hustling because we want to build relationships with everybody,” he said.

--With assistance from Chris Bourke and Michael Heath.

(Adds comments on regional security, Aukus.)

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