Budget 2025 — Do you feel back on track yet?.

A speech by Craig Renney, Te Kauae Kaimahi | New Zealand Council of Trade Unions Economist, at last week’s Te Hautū Kahurangi | Tertiary Education Union annual conference.

During the last election campaign – you might have heard the phrase “It’s time to get the county back on track” uttered once or twice. After one year in government, the National Party put out a document saying that under its management it was “focused on delivering real, tangible results to improve the lives of all New Zealanders”.

How do you feel that is going? Do you feel back on track yet?

There are some numbers in the Budget that might back up your concerns. Every year under this government the number of people on Jobseekers has been forecast to rise. Cumulatively, there are 66,000 more people on Jobseekers over the period to June 2027 than forecast at the last election.

The average real increase in wages falls every year from the last forecast. The wage differences now mean that the median income earner on 40 hours a week will be $978.40 worse off than forecast last year. That tax cut you got in 2023 just disappeared. Again.

Economic growth is lower than forecast last year, and at the election. Not just next year – but every year until June 2028. The cumulative size of the gap between the PREFU 23 and this Budget is $39.5bn. That’s not in nominal dollars – that after adjustment for inflation meaning each of those lost dollars is real. According to Stats NZ there are 5,330,600 residents in March 2025. That’s $7,413 lost income each over the next four years – or $1,853 a year. Your tax cut in 2023 has just disappeared. Again.

Forecast growth in new business investment falls by two-thirds this year from 6.1% to just 2.1%. The government has lauded its claims to be delivering business investment and even provided a tax cut to businesses to support it (costing $6.6bn over the next four years). Despite all that, there is less business investment over the next three years than in the previous Budget, with 20% less investment growth over the next 3 years.

But don’t worry – it’s not all clouds. House prices keep rising again at an average of 6% a year from June this year. That’s more than twice the rate of wages. New Zealand’s housing market with an economy tacked on will commence normal service soon. Just as we stop building the very last of the few remaining Kāinga Ora houses. Over the next four years – probably our biggest issue – vote housing and urban development – has total investment by the government changing by $10,000 less.

If you work in:

- Agriculture, Biosecurity, Fisheries, Food safety (-$50m)

- Arts, Culture, Heritage (-$19m)

- Building and construction (-$188m)

- Courts (-$15m)

- Customs (-$50m)

- Environment (-$239m)

- Māori development (-$88m)

- Pacific Peoples (-$36m)

- Social Development (-$1.5bn)

- Sport and Recreation (-$15m)

You see only cuts.

Some changes in the Budget are harder to justify than others.

- We are spending $29m on new funding for Ministerial services and ministerial travel budgets. As a former Ministerial Advisor, I am slightly conflicted about that. But it is more than all the new money being made available to help elderly people with care needs move out of hospital – which is $24m

- Speaking of the elderly, much was made of the proposed rates relief package. The maximum amount claimable will rise by $15 a year. Or 29c a week. Don’t spend it all in one shop.

- We are spending $31.2m on more military-style academies – known as Bootcamps. Despite all the evidence – including conclusive evidence from the government – that they don’t work.

- And if a bootcamp doesn’t work for you, the government is providing a $15m support boost for private schools. Meanwhile, Early Childhood Centres – have to make do with a 2% real terms cut in funding. Because the family boost programme of the government was doing so well.

- A 6% Increase in the cost of student fees this year – on top of the 6% last year. At the same time as the threshold for student loan repayments is held indefinitely – netting the government a very tidy $65m in new money.

- The account that we hold Tenancy Bonds in has built up $180m extra due to higher interest on bonds held by the government. Great! But rather than invest that say in housing inspections or homeless programmes – it’s just been taken by the government. Tenants – The Crown thank you for your generosity during these hard times.

But all of this falls into contrast when we look at the changes in pay equity. $12.8bn of funding essentially stolen from low-income, female-dominated workforces.

Let me put that number into context. That is $360,576 an hour, every hour, taken from that group. Over the next four years. The Minister admitted that around 180,000 workers with claims would be impacted by this decision. $12.8bn therefore represents $71,111 per worker – truly life-changing amounts of money.

Yet it has been taken to make the governments accounts look better. Because the numbers didn’t work for its original tax plan in 2023, working people, and working women in particular, are paying the price.

Now fiscal policy and Budgets aren’t for everyone. You have to be a very special sort of snowflake to get excited by vote books. But to me a Budget is time capsule. It tells us what governments of the day thought were important at the time. Where its values lay. When you understand the numbers of the Budget – it’s like running your fingers over the braille of where ministers believe change should be delivered.

The message that this Budget will be sending people – and the message that it will leave behind – is simply that the government doesn’t understand the problems facing New Zealand. Parents will apparently welcome financially looking after their 18 and 19 year olds according to the Minister of Finance. Taking away government Kiwisaver contributions is an opportunity to save more for low-income workers. The name of the press release that sets out cuts to best start payments for 60,000 babies is called “increased support for families”.

Now we are nearly half-way through this term of office – Winston Peters notwithstanding. If we were truly back on track, would we feel as justifiably angry as many of us feel today? If we were truly back on track, would we be worried about thousands of New Zealanders leaving for a life overseas? Would we be as worried about the future that in front of us in this Budget?

Getting truly back on track might – just might – require us to change the driver instead.

[If you enjoyed Craig’s piece you would love his regular podcast – Locked Out!]