(Photo: Getty Images)
(Photo: Getty Images)

ĀteaMay 15, 2020

This government is not transformational. Neither was its budget

(Photo: Getty Images)
(Photo: Getty Images)

Budget 2020: Although it was called “Rebuilding Together”, it’s hard to see what exactly yesterday’s budget is rebuilding.

Budget 2020 was never going to be a transformational budget. Not for Māori. Not for Aotearoa New Zealand. It is easy to understand the disappointment of many across the country who hoped for something more and who have been advocating for us to adopt a different economic approach. This was a once-in-a-100-year opportunity to be bold, to implement a 21st-century new deal, to move away from the investment mindset of the 20th century that saw large infrastructure projects as the key to a prosperous society.

But this government is not a transformational government. Neither were the recent ones – such is the stigma attached to the last lot who tried their hand at it in the 1980s. Universality and incrementalism are the conditions of this government’s political mandate. It has to exist within the constrains that we, as a society, place upon them. New Zealand, simply put, does not want an economic transformation. The status quo benefits far too many of us to contemplate such a radical reshaping of our entire economic system.

The government’s budget process reflects this. Existing programmes are rolled over, year on year. Health, education, social welfare and law and order take up the bulk of the spending and we are left to rely on the universal application of support services to address inequitable outcomes and to celebrate the small, incremental changes that can be made at the margins.

But universality and incrementalism do not work for Māori. We have been using these two tools for the past 35 years and inequality still persists in our society. Even a proportionate response is no longer sufficient. What Māori communities need is a disproportionately positive response and questions remain as to whether this can be achieved through the increased investment in health, social services and education announced in budget 2020.

What, then, to make of budget 2020? In 2019 an additional $480 million of new spending over four years for Māori initiatives was announced, amounting to 3.2% of the total new spending allocation of $15.15bn. The specific announcement of Māori initiatives came about following the chorus of criticism of the government following the 2018 budget, which focused on mainstreaming Māori support services.

It was widely acknowledged around te ao Māori that budget 2019 was a good first step towards the provision of more direct support to Māori communities. The $920 million of Māori-specific initiatives announced in budget 2020 represents a large increase on last year, but this funding needs to be assessed against a much higher total of new spending initiatives. To date, $43.2bn worth of new spending has been announced as part of budget 2020 – made up of $13.2bn in core government spending over the next four years and $30bn of the $50bn Covid-19 Response and Recovery Fund. The additional $920m for Māori-specific initiatives represents just 2.1% of that spend.

At the heart of budget 2020 is the establishment of the $50bn Covid Response and Recovery Fund. Approximately $30bn of this fund has already been allocated towards wage subsidies, business loans and assistance, investment in “shovel-ready” infrastructure, trades and apprenticeship training, and the environmental jobs package. The $1.1bn investment into Papatūānuku through the environmental jobs package is one of the highlights of this budget and it represents a great next step in the process of restoring and preserving our natural environment. The additional $400 million of funding for Māori education, te reo, and kōhanga reo addresses the critical funding shortfall that the sector has been experiencing for generations. Whānau Ora receives a much-needed top-up of $136m to support its Covid-19 response and the extra $33m to expand the Vision Matauranga Fund is a good step towards developing the scientific and innovative potential of Māori knowledge.

It is not all good news. Te Puni Kōkiri takes a hit, with the Māori development allocation reduced from $427m to $382m. Factoring in a one-off allocation of $21m in last year’s budget for the Taranaki Māori Trust Board, this represents a reduction in funding of $24m, resulting from a $14m underspend in the commissioning of Whānau Ora outcomes and a $10m underspend in programmes designed to accelerate Māori development. The additional $3bn in spending for “shovel-ready” infrastructure projects has already set alarm bells off for many Māori communities, with fast-track RMA processes on the cards to ensure these projects can start immediately. And while the increased allocations for He Poutama Rangatahi and Māori apprenticeships should be applauded, the focus here appears to be too heavily weighted towards the building and construction, agriculture and manufacturing sectors. Gone is any reference to the future of work and the concept of training and retraining a workforce for the demands of the 21st-century workplace where technology, design, science and innovation skills are not only highly valuable, but in high demand around the world.

Step outside the Māori-specific initiatives and budget 2020 can been seen in a different light as well. The status quo has been well and truly preserved. This was not a welfare budget. It does nothing to fundamentally address climate change. The 100,000 homes we needed just two years ago to rebalance the housing market has been reduced to 8,000. The Department of Corrections continues to build new prisons. There is minimal investment in tech, science and innovation. Tertiary education continues to create financial hardship on students and the student loan system strains under the ever-increasing debt burden that young New Zealanders carry into their adult lives. The recommendations of the Waitangi Tribunal continue to be ignored and we can probably forget about the devolution of the funding available for support services to hapū and iwi – despite the mechanism for this existing in a number of Treaty of Waitangi settlements.

Twenty billion of the $50bn Covid-19 Response and Recovery Fund remains unallocated. Perhaps, as a treat, we can get a little of the transformation that our society desperately requires in order to ensure we can provide a fair and equitable experience for everyone who resides here.

Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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