The Prime Minister is defending the decision not to set up a new compensation scheme for survivors of abuse in state care, which is at odds with a major recommendation of the Royal Commission of Inquiry and his own commitment last year.
Instead, the coalition is injecting almost $775 million into the existing redress system over the next four years.
He said the government looked at the pros and cons of a new system, and there were a "couple of issues with it".
"It takes time to put a new redress system in place. It costs a lot of money, and you've got to be able to guarantee that you can get a better result than what you're doing right now."
Luxon said survivors had waited a "tremendous amount" and a "long period of time".
"We actually feel moving quickly in order to get redress to them is actually really important.
"So what we've done is taken the current system and made improvements to the current system rather than introduced a new system."
He said a new system was considered but given the time it would take and the costs associated, and "when you're dealing with survivors that frankly have been waiting a very, very long time, it's more important that we get moving to give people clarity as they move forward".
Making the announcement in Auckland on Friday, Stanford said she was honest with the Redress Design Group that the new compensation scheme they were calling for was "more ambitious and more unique" than the government was willing to do.
She said they acknowledged that, and a conversation was had about which aspects could be addressed under the improved system.
"That's what we've tried to do today... making sure we're increasing payments and topping up those who in the past haven't been redressed as well."
Opposition reacts
Labour leader Chris Hipkins said the government completely ignored the recommendation for survivors to be involved in designing a new redress system.
He said involving the survivors in the process was "vital".
"These are people who have had their lives, in many cases, ruined by state abuse. They should be involved in the discussions around how to put that right.
"I think cutting their voices out of the process is absolutely reprehensible."
Hipkins said it showed the apology delivered by the government last year was "hollow".
"They said they weren't going to repeat the mistakes of the past, and yet, that's exactly what they've done."
Labour leader Chris Hipkins said he wanted to be clear that he did not support the government's decision. Photo: RNZ / Samuel Rillstone
He wouldn't say whether the money was enough, saying that was always going to be a "contentious issue".
"But the government is on the back foot right from the get go, by ignoring the Royal Commission's recommendation that the new redress system needs to be more independent."
He said getting the Ministry of Social Development to administer the redress system wasn't going to "win the confidence of survivors".
"They've already lost confidence in the existing redress system, and I think that, frankly, they're going to see this as a bit of a slap in the face."
He also criticised Minister for the Government's Response to the Royal Commission, Erica Stanford, for ignoring his offer to "take the politics off the table" on the issue.
"They chose not to take us up on that. I want to be very clear, we weren't involved in any way in this, and I don't support it."
The Green Party said it was "appalled" by the amount of money set aside as redress for survivors of abuse in state care, and that it left "little justice for survivors".
Co-leader Marama Davidson said it falls "severely short of real redress" and "our survivors deserve so much better".
She referenced the Prime Minister's apology last year, but said "an apology is empty air without action".
"The government has failed survivors by repeating the mistakes of old that resulted in the abuse and trauma detailed by the Royal Commission."
She said the government had "completely missed" an opportunity to "learn and do better as a country".
Davidson said the government had offered survivors "well below what they deserve" adding "insult to injury".
"The government is not only failing to heal the wounds of our past but is risking opening up new ones without real redress and a repeat of old mistakes."
Te Pāti Māori called the announcement "state-sanctioned damage control".
Co-leader Debbie Ngarewa-Packer said a "stolen childhood" was not healed, and "trauma will not be lifted by a $30,000 cheque".
"This may be a step, but that's not justice.
"Survivors have fought to be heard, and now the government, instead of listening to what it is that they ask for, they've offered a band aid for broken lives. And I think this is what's really disgusting."
She said survivors had been "really clear" the whole way through, that this wasn't only "about money".
The government had an opportunity to show "real leadership in addressing and lifting this trauma" and it had fallen "desperately shy".
Ngarewa-Packer said the fact survivors hadn't been involved in the process was "probably the worst thing out of it".
She reflected on the day of the apology in Parliament, and the "amazing amount of goodwill" from survivors.
"They want the truth acknowledged and the healing has to be prioritised and the state held to account. And this is not the way to do that."
