Our Analysis
On Thursday 30 May the Government presented its 2024 Budget, saying that they were focussing on delivering promised tax cuts by cutting spending in other areas.
In this post, we closely review Budget 2024, aiming to find the small line items that matter to our sector, and to those that we serve, that don’t make the headlines. We, like many others in the sector, are grateful for the wins, and still processing the structural changes apparent in this first budget of the coalition Government.
In the lead-up, we heard arguments around if it was or wasn’t an austerity budget, or simply austere. Now that we have it, the impression for the NZCCSS tīma is that there were no surprises, few things for our sector be excited over, and far fewer “small wins” for us to share with you this year.
For every small reduction within the fine detail, we are conscious that often these are real people who have lost or will lose their jobs. We remain concerned at the impacts of unclear contracting for our service providers, and the reality that we will see many more losses for real people as these cuts roll out – needed or not.
What is the Budget?
The Budget is announced by the Government every year, usually in May. It outlines how much money the Government has, how it plans to get more (through either borrowing or cutting spending) and how it plans to spend it.
This is usually focussed on the following year but often looks ahead 2-3 years when funding will be spread out.
The Spinoff website has a great guide for ‘people who don’t do numbers’
Finance Minister Nicola Willis has said the Government’s aim is to reverse the operating deficit, which increased sharply during the COVID-19 pandemic. Currently at a deficit of $9.4billion, Treasury estimates this will hit $13.4b in 2025 before rebounding to return to a surplus in 2027/28.
This does not take into account our massive infrastructure deficit which was estimated by Te Waihanga | The Infrastructure Commission in 2021 to be $100b, likely to balloon to $200b within a few decades if more is not done now to address this. The Budget’s allocation of $1.2b for infrastructure is a small drop in a big ocean.
RNZ have created the graphic below to visually compare the amount of money being spent on different areas. It should be noted that nearly half of the Social Security and Welfare spend is for superannuation payments.
Digging Deeper
Our team has taken a deep dive, looking at budget initiatives relevant to our policy focus areas, to honouring Te Tiriti and to the wider social services sector:
- Kaumatua | Older people
- Tamariki | Children
- Our Sector
- Te Tiriti o Waitangi
To finish off our look at Budget 2024, we offer a selection of opinion and summary from across the motu.
Post Budget Perspectives
Kaumātua | Older People
Universal Superannuation continues to be the key spend in the budget for older New Zealanders.
We note, however, that contributions to the Superannuation capital fund (investment for future payments) have been reduced by nearly 50% in this Budget. This is concerning, especially given our ageing and growing population, and the long-term impact on future generations for reduced investment now.
Other announcements of interest to those engaging with older people:
- Older people will continue to receive free prescriptions
Although the $5 co-payment for prescription medicines will be reintroduced from July this year, those aged 65 and over will continue to receive free prescriptions. - More older people to access BreastScreen Aotearoa
The breast screening programme will be extended to include free mammograms for 70 to 74 year olds (currently available for those aged 45-69 only). - Promised funding of cancer drugs not delivered
A key election promise to fund 13 cancer drugs through Pharmac has not been delivered in this Budget, with the Government saying they will funnel money from reintroducing prescription charges into delivering this promise in coming years.
Our easy-to-read guide Te Kōrero mō ngā Kaumātua is an online resource designed to support understanding of older people in Aotearoa.
Tamariki & Whānau | Children & Families
Oranga Tamariki
Oranga Tamariki has had its budget decreased by $47 million with a total budget of $1.5 billion this year. Much of this saving has been found by ‘cutting contracted services, back-office functions and administration’. In addition, this lower amount takes into account that OT will no longer receive revenue from Whaikaha – Ministry for Disabled People.
Specifically, savings are highlighted in the budget under the heading ‘Contracting Service costs-This savings initiative returns funding from contracts with third-party providers’.
National promised to ‘target backroom jobs and protect front line services’ as it lobbied for savings across government.
We would argue that cutting contracted services IS a cut to the frontline, despite the Government assurances that these services would be protected. Without this funding, service providers expecting to recontract with Oranga Tamariki from 1 July will only be able to maintain their crucial frontline work if they have reserves able to be used to deliver existing level of services.
Education
Funding targeted at 5–12-year-olds continues to be delivered mainly through the education portfolio.
Many of these announcements are not new and were lobbied for strongly by National and its coalition partners. The headline here is $153 million for up to 50 charter schools when the operational grants that all of our schools rely on increases less than inflation (increasing only 2.5-3%).
Ka Ora, Ka Ako
Ka Ora, Ka Ako School lunches programme is being reviewed but maintains its current funding in Primary Schools until 2026. Savings of approximately $107 million are expected through changes to the High School programme. From next year, a new model will be established to feed students in years 7 and above to reduce costs with changes to the menu, suppliers and preparation of the lunches.
David Seymour announced earlier this month that some of the savings would be used for early childhood, sharing that “there will be a new targeted programme to provide food to 10,000 two-to-five-year-olds who attend low-equity, not-for-profit, community-based early learning services, funded using the cost savings found in the lunch programme”.
Free Period Products in schools continues
The budget does continue the Labour government’s introduction of free period products in schools with $2.9 million allocated to benefit up to 200,000 students.
Creatives in Schools programme ends
The Creatives in Schools programme, which had around $3 million in funding annually until 2028, has not been continued. The Budget documents stating that the ‘programme was set up in response to Covid-19 and was no longer needed’.
Family Boost and ending funding for two-year-olds
March 1st saw the extension of the 20 hours free Early Childhood Education to two-year-olds. But this budget replaces that initiative with the National Party’s flagship family policy, Family Boost.
Family Boost sees families with children in early childhood education, and who meet specific income levels receive up to $75 per week. The amount reduces as income increases and should reach roughly 100,000 families. Nicola Willis came under fire in the media around the small number of families entitled to the full rebate and in March announced, “I can confirm that based on official modelling around 21,000 families will be entitled to the full payment.”
Families that have two-year-olds were set to save around $130 per week with the 20 free hours extension.
Other announcements
Within this budget, new funding has been allocated to initiatives such as:
- High Needs Children Services (over $10m)
- Addressing Serious Youth Offending Programme ($7.3m)
- Fast Track Youth Offending Programme ($7.65m).
- An additional $3m (compared to 2023/24) has been included towards the extension of the Pay Equity Settlement for Social Workers in Community and Iwi Organisations.
- $11m has been budgeted to support delivery of a Crown response to the Royal Commission of Inquiry into Historical Abuse in State Care and in the Care of Faith-Based Institutions.
We can see funding for workstreams relating to the Homelessness Action Plan. We had understood this work was not progressing and have reached out to officials to clarify but have yet to hear back. We remain hopeful that this important mahi will continue.
Extra points to note
Below are some of the points we noted in our fine-tooth comb through the detail. We will be following closely to see what comes of these:
- Reduction in funding to the Commerce Commission to investigate business competition
- Reduction in funding to the Independent Consumer Advocacy Body – Small Electricity Users
- Reduction in Apprenticeship Boost funding
- Cuts to funding for advice on energy saving, support for energy hardship
Our latest guide Te Kōrero mō ngā Tamariki is an online resource focussing on middle childhood (5- to 12-year-olds) in Aotearoa.
Our Sector
Social Investment
The social investment model continues to be a focus for this Government, with $25m allocated over the next four years to support the implementation of this approach across the sector.
While still unclear in the detail, we can see some hopeful framing from the appropriation itself suggesting initial approach will look to providing advice and creating insights, tools, and practices to support sector-wide implementation of a social investment approach.
Whaikaha | Ministry of Disabled People
The increase of 1.1 billion over 5 years to address demand and cost pressures is much needed but is unlikely to meet the very real needs for the sector. Included in the Government’s budget papers was this useful factsheet.
Other high-level points to note
Across the budget, we also think these points are worth noting.
Should you want to know more, or where we found these lines, please don’t hesitate to get in touch.
- 25 more graduate Doctors per year
- New fund for Doctoral students (just over $1m)
- Large reduction in funding to Mana Mokopuna | Children and Young Persons Commission, relating to shift from establishment funding to operating funding
- Wide, small cuts to funding that relates to supporting access to financial and accommodation assistance
- Reductions to holistic services supporting reintegration and wellbeing for individuals and whānau via Corrections
- Reductions to the wider community funding streams delivered by the Department of Internal Affairs
- Funding to Justice to lead Te Aorerekura continues
- Cuts to bodies providing Social Worker monitoring and regulation – watch this space
Te Tiriti o Waitangi
As the protests around the country yesterday showed, there is a real concern that the Government is not doing enough to support tangata whenua throughout Aotearoa.
Nicola Willis argues that increased spending for key areas such as healthcare and education, and strengthening the economy will support everyone, including Māori – so targeted support is not required. This has been shown with the disestablishment of Te Aka Whai Ora | The Māori Health Authority and is further reflected in the Budget.
Te Matatini funding to continue
Approximately $19m per year for three years to continue to support the regional and national Kapa Haka festivals.
Removal of funding for Stats NZ to work with and for Māori
Stats NZ will no longer be funded to work for, and with, iwi, hapū and Māori to ensure tangata whenua are meaningfully included in our nationwide data.
Post Budget Perspectives
Budget 2024 “does not fulfil Te Tiriti obligations”
This piece from Julia Whaipooti (Te Kahui Tika Tangata | Human Rights Commission) focusses on inequality built into the system and suggests that while Te Matatini funding is for the performance of Māori culture, there is little to no investment in the lived experience of it.
Winners and Losers from Budget 2024
RNZ has put together this handy summary about the main additions and reductions in this year’s budget.
“Starving the future’s needs to pay for today’s politics”
Max Rashbrooke crunches the numbers for The Spinoff and warns of long-term consequences from this Budget.
“The economy’s worse than expected”
Bernard Hickey isn’t so sure that the cost of tax cuts is being covered by reduced spending elsewhere – he explores this, the cost of living and predicted inflation in a Budget 2024 special podcast with Toby Manhire.
Waiho i te toipoto, kaua i te toiroa
Let us keep close together, not wide apart
We welcome your feedback on any of our publications, email: [email protected]
Naku noa, na
The team at NZCCSS
