OPINIONBusinessMay 19, 2022

Budget 2022: The great Spinoff hot-take roundtable

Grant Robertson said his budget ‘builds the secure future that New Zealanders deserve’. But what do the experts think?

Gabrielle Baker: Proving the case for a Māori Health Authority?

OMG! The Māori Provider Development Scheme gets a funding increase for the first time since 1997! Until now it hadn’t even been keeping pace with inflation and getting it on the agenda as an investment priority has been hard despite two independent evaluations showing the need for investment. My quick calculation is that the $30 million over four years is doing only slightly more than retaining the value of the 1997 investment. But I’m still feeling good about giving support to the one part of the health system that consistently delivers for Māori whānau (and hope it is just the first stage of a longer-term plan to improve the scheme overall). 

In sorting through the rest of the budget, I couldn’t say it is perfect, but it is a move in the right direction. The Crown has known it needed to fix the primary healthcare funding formula for more than a decade and this year’s budget puts some money behind this – but the question now is how will this be done? Using a sample of Māori PHOs and providers, the Waitangi Tribunal claimants have calculated that Māori providers are underfunded about $20 million a year and have been since 2003. So the $168 million over four years will need to be targeted to fix the inequities that have become baked into the system. 

Unfortunately, oral health still remains a luxury most of us can’t afford. The budget does increase the value of the dental special needs grant from $300 to $1,000 which was long overdue, but I still can’t believe we have a publicly funded health system that in most instances doesn’t include dental care for adults. 

Gabrielle Baker (Ngāpuhi, Ngāti Kuri) is a consultant who has worked in Māori health policy for the past decade

Dennis Wesselbaum: The first ‘2023 election campaign budget’

In my opinion, the budget fails to deliver any of the goals set by the government and appears to be the first “2023 election campaign budget”.

Spending ($11.1) billions on health, including a major health reform that public health experts say will not improve outcomes, is hard to understand.

Additional spending ($2.9 billion) on tackling climate change impacts when the ETS is sufficient is another example of wasteful spending. Further, how can you reduce petrol prices on one hand but then talk about fighting climate change on the other hand?

If you wanted to complement the ETS, you should change the regulation of city design, change land and forest management, and invest in R&D and infrastructure.

On 176 pages, “economic growth” only appears four times and never in reference to spending goals. There is also no clear strategy on how to foster productivity.

The $350 payment is not enough to support low- and middle-income Kiwis and is much smaller compared to the effect of National’s proposed tax cut.

Overall, this is a frustrating budget, which fails to focus on making New Zealand more productive in the future by spending on education, infrastructure, and R&D. Instead, we get “feel-good” policies which do not survive closer scrutiny and more wasteful spending which will likely fuel inflation (which is inaccurately blamed only on international factors).

Dr Dennis Wesselbaum is a senior lecturer in the department of economics at the University of Otago

Grant Robertson, flanked by fellow ministers, on his way to parliament to deliver the 2022 budget (Photo: Hagen Hopkins/Getty Images

Joshua Hitchcock: Māori will continue to suffer

It is a sad reality that the annual $1bn targeted funding for Māori-specific initiatives that has been rolled out every budget for the last few years is both the best we are likely to experience and at the same time, woefully inadequate to reach the 2040 deadline of achieving equitable outcomes for Māori under the government’s He Kai Kei Aku Ringa strategy.

Services designed by Māori for Māori work, and they work better than anything designed in Wellington. Yet the $580m allocated towards Māori health out of a total health allocation of $12.8 billion is a drop in the bucket of the overall investment required to address the long-standing health inequities experienced by Māori.

It is a similar story for the Māori economy, where investment is minimal. Targeted capability services are estimated to reach around 100 Māori businesses a year – a number well short of the estimated 10,000 Māori-owned businesses or the 14,700 Māori who operate as sole traders.

I could go on, but really, what is the point? The opportunity is gone. An election year budget in 2023 is never going to deliver the investment required to achieve equitable outcomes for Māori. And we will continue to suffer because of it.

Joshua Hitchcock is a business adviser, accountant and writer on Māori law, policy and economic development

Christoph Schumacher: Bigger than ever, but not better

Households are struggling with the worst cost-of-living crisis in 30 years, real wages are not keeping up with rising inflation and mortgage rates are increasing. With this backdrop the government has announced a record budget increase of $6bn on top of the existing operational spending of $114bn, making it the biggest budget ever.

Does this mean that immediate help is here for the team of five million? Not necessarily. A big chunk of the extra health spending is going towards a debatable restructuring of the healthcare system rather than shortening waiting lists, particularly in mental health. Cost-of-living support amounts to $350 for lower-income earners but inflation is expected to rise further. The transport and fuel subsidies will only last for another two months yet $1.2bn will be spent on cleaning up transport including helping low- and middle-income families buy electric cars. There is a $100m business growth fund but that won’t fix the labour shortage that prevents many businesses’ recovery.

Budget 2022 is bigger than ever but does not comprehensively address the current cost-of-living crisis. While Grant Robertson looks towards tomorrow, many Kiwis want him to focus on today.

Christoph Schumacher is a professor of innovation and economics and director of the Knowledge Exchange Hub at Massey University

Cath Conn: Health spending must promote a healthy food system and green cities

A commitment of $13.2bn to health spending over four years is a significant commitment within the context of a new health system for New Zealand. However, it appears that the focus is still on maintaining the current health care “sickness” model.

While such spending is welcome – see for example the increased support for poor people to seek vital dental work – it does not tackle the major causes of morbidity and mortality in New Zealand today, or future health. These relate largely to what we eat and the cost and quality of food, our physical activity and stress levels, and our financial circumstances.

Looking into the future, our health and wellbeing will be shaped by the global environment, the degree to which we have a successful and equitable economy, and for many of us the quality of life in New Zealand’s cities.

For New Zealanders’ health to improve there is a need to adopt a precision agriculture leading to a healthy and cost-effective food system, green urban development promoting clean air, physical mobility and safe transport for all, equitable education and anti-poverty measures. These will be more impactful for society than spending on health care alone.

The Labour government may be concerned that New Zealand voters are not ready for radical social change. A stronger conversation, including that of investing in green cities, precision agriculture and a healthy and cost-effective food system, is needed.

Dr Cath Conn is a social scientist and the co-director of the AUT Child and Youth Health Research Centre

In the crossover podcast event of the year, Gone By Lunchtime’s Toby Manhire and When the Facts Change host Bernard Hickey joined forces to weigh up the budget. Listen below.

Follow When the Facts Change on Apple PodcastsSpotify or your favourite podcast provider.  And while you’re at it follow Gone By Lunchtime on Apple PodcastsSpotify or your favourite podcast provider too. 

Nicola Gaston: Financial support for research is steadily eroding

I wasn’t expecting any major news in the science space, given that the government is still working through Te Ara Paerangi, the process for reforming and reshaping our science and research sectors over the next few years. It is reasonable to assume that new money for new schemes – needed to match the government’s own longstanding goal of increasing funding to near the OECD average – will come at the end of that process, so there are no surprises there.

My concerns about science in this budget are therefore pretty basic: in the face of inflation, the financial support for research in New Zealand, across our universities and CRIs, is steadily eroding and has been doing so for some time. To bring this down to the human scale, perhaps a simple example is best: the Marsden Fund recently increased its level of funding for PhD research stipends by 25%, to a value of $35k per annum tax free, a welcome shift after many years of inflation having resulted in PhD researchers being paid less than the minimum wage.

However such increases, as necessary as they are, do mean that fewer researchers will be trained and less research will be done. This needs urgent attention – not new funding schemes, but simply across-the-board increases in bread-and-butter funding mechanisms that provide the oil needed for our research sector to keep running.

Nicola Gaston is co-director of The MacDiarmid Institute for Advanced Materials and Nanotechnology

Eric Crampton: Inflationary generosity and missed opportunities

When finance minister Robertson announced a $350 payment to lower-income earners, the number rang a strange bell.

I have been keeping an eye on the effects of inflation on taxes paid by lower-income earners.

Inflation since 2017/18, when Labour took office, had added $350 in tax to someone earning $19,000 by 2020/21 – and the impost will have grown since then.

Undoing past wrongs might have been too much to hope for. But Minister Robertson could have announced that tax thresholds would be indexed from 1 April 2023, so that inflation would not keep pushing lower-earners into higher tax bands. Instead, lower-income Kiwis get a one-off payment.

They miss out in another important way too.

The government expects to earn $1.4 billion by auctioning carbon credits in 2023.

Divided among 5.1 million Kiwis, that could have funded a carbon dividend of just over a thousand dollars for a family of four – or could have been targeted to give more to poorer households to help them prepare for a lower-carbon future.

It would have locked in political support for rising carbon prices.

Instead, Robertson will use it for corporate welfare and a political slush fund.

Some missed opportunities.

Dr Eric Crampton is chief economist with The New Zealand Initiative

Brooke Stanley Pao: A slap in the face for those struggling

The budget has addressed zero out of the seven key steps that we called on the government to take to close the gap between the cost of living and incomes for people on income support.

People on benefits face big deficits every week – they are hurting and the situation is urgent. The changes to emergency dental care and child support are well overdue and welcome, but it’s disappointing to see these changes won’t come into effect immediately. 

The announcements today, leaving out people on income support, are a slap in the face for some of the people in our community. It’s past time for the government to finally increase core benefit levels to the standard of liveable incomes and fully implement the recommendations of the Welfare Expert Advisory Group (WEAG).

Brooke Stanley Pao is the coordinator of Auckland Action Against Poverty (AAAP) and a spokesperson for Fairer Future

Lucy Stewart: Less research will be done, and fewer researchers will stay in NZ

Overall this is an uneventful if not mediocre budget for the research community. I’m pleased to see a meaningful boost to the Health Research Fund and commitments in the climate and RNA tech spaces – as we have seen with the development of mRNA vaccines against Covid, this is a promising area of technology which could bring rapid benefits if properly supported. It is also good to see that the Agriculture Emissions Reduction initiative explicitly includes mātauranga Māori in its mandate.

However, funding is otherwise flat or with increases that will barely cover inflation – particularly our premier blue sky research fund, the Marsden Fund. What this means in practical terms is that less research will be done and fewer researchers will be able to stay in Aotearoa. In particular there is nothing here that will particularly change circumstances for early career researchers. Researchers and research are not exempt from the effects of inflation and until (and unless) the Te Ara Paerangi process brings meaningful structural reform, this is just more of the same for researchers.

Dr Lucy Stewart is co-president of the New Zealand Association of Scientists

Liam Hehir: The low-spending spin isn’t going to work

This is was always going to be a very hard budget to manage politically given the narrative that’s firming up around government spending. A perception that the government has spendthrift ways has taken root right at the time that inflation has really started to bite voters in the back pocket.

A series of three one-off payments to middle-income earners is more creative than expected but at less than $120 per payment, they are not going to do much other than remind recipients that we are in the grip of a cost-of-living crisis.

As a result the government’s surrogates are out in force touting this as a relatively low-spending budget. This claim is apparently justified by reference to the cost blowouts associated with Covid spending in times now gone. This is a bit like trying to make a virtue out of drinking a whole bottle of wine in a single evening because you had two the night before.

It’s a slightly better spin than the usual tactic of comparing the government’s spend-up to National’s in 2012. But it’s not that much better. And it’s not likely to be any more effective.

Liam Hehir is a political commentator

Samantha Murton: Little to address critical GP shortage

While there are a few good things in today’s budget, like addressing the burden of diabetes for Pacific communities and lowering the bowel screening age for Māori and Pacific peoples, the concern over reducing numbers of specialist general practitioners has largely been ignored.   

We are facing a crisis in this country and the numbers just don’t look good; I’m worried we don’t have time now to make enough change. Most New Zealanders (4.8 million of them) see their GP first when they have a health issue: but we’re doing 14 million consultations a year dealing with complex medical conditions in the community. GPs work alongside many other professions, but we are desperately in need of more trained specialists to bolster the profession. There are 1,500 more training places for primary care work, which includes nurses, physiotherapists, pharmacists and optical services, but we need GPs.   

In our recent GP Future Workforce Requirements report, the college highlighted how 10 extra general practitioners per 100,000 people means about 30 people a year wouldn’t die from cancer, respiratory and cardiovascular issues, and having more GPs would save the economy $139.6 million in health savings ($150m per year in savings minus $10.4 million to train more GPs).  

Yet today we saw little to address those critical workforce shortages.   

Dr Samantha Murton is the president of the Royal New Zealand College of General Practitioners

Belinda Storey: Government continues to massively underinvest in climate

The Climate Emergency Response fund fails to address the extreme events and public emergencies that the climate is causing today. Budget 2022 focuses on mitigation and assumes adaption is something we can consider tomorrow. Given the scale of climate impacts, the government continues to massively underinvest in our understanding of how much our climate will change in the next few decades.

For example, the budget fails to address the pressing problem of inaccessibility of climate data caused by the flawed profit-driven Crown Research Institute (CRI) funding model. Fully funded CRIs could focus on research and make their data freely available for reporting entities (on climate-related disclosures), local government and entrepreneurs.

It is encouraging to see additional investment in healthcare. Climate change will impact our wellbeing, particularly the wellbeing of our most disadvantaged citizens.

It is also positive that the budget provides additional funding for public media, especially to combat misinformation. We have seen those spreading misinformation shift their focus from Covid vaccines to climate change. Climate change is a wicked problem and can’t be explained in a 15 seconds soundbite. Public media plays a vital role in advancing the national debate on climate solutions and can amplify voices that might otherwise be ignored.

Belinda Storey is the managing director of Climate Sigma

Andrew Lessells: Tinkering with a crisis is wellbeing for no one

Students are bearing the brunt of the cost-of-living crisis and budget 2022 makes no meaningful change to address this. A one-off, tokenistic $350 band aid doesn’t fix the broken student allowance system and doesn’t correct the systemic causes of student poverty. To add insult to injury, tertiary institutions are facing a real-terms funding cut that will result in more staff burnout, poorer support systems for students and larger class sizes. If the government truly believes in quality tertiary education, they need to fund it.

Coming out of Covid we had a chance to be bold, to truly support students. We know that students need a universal allowance, we know that Chris Hipkins needs to honour his promise to reintroduce the postgraduate allowance and we know that we need to resource our underpaid, overworked lecturers and support staff.

Unfortunately, budget 2022 is yet another example of the government claiming to care about wellbeing while presenting us with an ambulance at the bottom of the cliff. Students are at breaking point and leaving us out in the cold isn’t a solution.

Andrew Lessells is national president of the New Zealand Union of Students’ Associations

Susan St John: Little hint of meaningful action

In last year’s budget, the government acknowledged that the damage of the 1991 budget under Ruth Richardson was huge and that the pain inflicted on families had never been reversed. But today’s budget has little hint of meaningful action amid mounting evidence of social disintegration and poverty on a scale unimaginable in 1991.

The children in families on benefits continue to miss out on around $4,000 per year in Working for Families tax credits simply because their parents are so poor they need a benefit or part-benefit. Currently many must borrow, just to subsist. They fall further into that vicious poverty trap of repayments leading to less disposable income requiring even more borrowing. 

“Squeezed middle-income” families took another hit this April when the government tightened the targeting of Working for Families with a clawback of 27% over the unadjusted Working for Families threshold of $42,700. This budget offers these families an extra temporary payment of just $350.  

Realistic assistance for dental costs is more than welcome as is pass-through policy for sole parents fortunate enough to have meaningful child support payments. They will be better off next year and the few crumbs in budget 2022 are better than nothing. But these changes won’t touch the problem of destroyed balance sheets of the poorest people in New Zealand amid the growth in colossal untaxed wealth accumulations of the well-off. 

As the late Moana Jackson said, “incrementalism is stasis”. 

We can expect a continuance of reliance on the use of one-off grants from MSD and food parcels, shoes and raincoats from private charity. Imagine if we treated those on superannuation this way.

Not that all is well with older people. But the impact of the ageing population and the emergence of older-age poverty associated with lack of access to affordable housing is not mentioned in this budget. 

It is wrong to argue that there are fiscal constraints for more transformative action for families. The budget just tossed $2.6 billion of borrowed money into the NZ Superfund with no one batting an eye. The winter energy payment for better-off superannuitants continues unchallenged. We can and must do better for our children, not just because they have a right to adequate resources but also because an ageing population depends on young people to be well and productive and to actually stay in New Zealand. 

Susan St John is an associate professor, part-time director of the Retirement Policy and Research Centre at University of Auckland business school and a founding member of the Child Poverty Action Group

Aotearoa Collective for Public Transport Equity: No fare discount for tamariki

Budget 2022 is being lauded by some for keeping public transport fares at half price for community service card holders, but it is truly a missed opportunity to make public transport free altogether. Today’s announcement means that come August, tamariki and rangatahi will now be paying more than adults to use public transport – this isn’t tika. Free fares would cut emissions, make our cities more vibrant, and make public transport more accessible and affordable – all for less than the price of the fuel tax cut. We all deserve an affordable option to get to where we live, work and play.

Aotearoa Collective for Public Transport Equity is a collective of over 100 organisations and a dozen councils

Claire Achmad: Not enough for our community-based social services

Aotearoa’s community-based social services have worked tirelessly during Covid-19, helping families and whānau get through. These services are facing combined pressures of massive pay equity gaps, the need to grow the workforce, worker fatigue, and a rising demand in community need. 

We urgently need to see more consistent fair and sustainable funding into our community-based social services; sadly it’s MIA in this budget. The health system investments are much needed and should reduce disparity and improve equity. To holistically back these up, next year it’s crucial the government significantly invests in community-based social services, so that Aotearoa’s children, rangatahi, families and whānau experience better holistic hauora and wellbeing outcomes. 

Positively, this budget includes investment to grow some of the initiatives that our community-based social services deliver, and which are proven to work. This includes child mental health service Mana Ake, Family Start (an in-home visiting prevention programme), and integrated community responses to family violence. At a time when it’s imperative we strengthen whānau outcomes and wellbeing, these investments – as well as changes to child support and funding of dental services for low-income families – will make a difference. Of course, given the scale of the challenges, much more is needed to truly address the realities of Aotearoa’s socioeconomic challenges affecting families and whānau, including our child and youth mental health crisis, family poverty and need for liveable incomes, and the circumstances that lead to child abuse.

Dr Claire Achmad is the chief executive of Social Service Providers Aotearoa and a children’s advocate

Selah Hart: Will this be a future that our mokopuna deserve?

“He oranga mauroa” is how this year’s budget was labelled by Minister Peeni Henare in today’s social sector lock-up in parliament. A budget that builds out the next four years of investment with a big focus on wellbeing, not just from a physical health perspective, but by way of housing, targeted education, language revitalisation, and of course Whānau Ora.
In such a critical time, as the country embarks on a significant health reform, we unfortunately still only see a drop in the bucket across the total Vote Health. We know that it has taken significant work inside and continuous pressure and advocacy from outside to get to this point, as we continue to shift the dial in an attempt to close the health equity gap. “Is it enough?” you may ask. No, it will never be enough until Māori have been given the means, resources and power in decision making to live healthy prosperous lives for generations to come.
Selah Hart is CEO of Hāpai Te Hauora

Christine Rose: A missed opportunity for meaningful change

There has never been more hype, while the need for real action to address the climate and biodiversity crises has never been greater. Synthetic nitrogen fertiliser and the bloated dairy herd are driving climate change, polluting rivers and contaminating drinking water. But despite the “transformational” promises in the “climate emergency”, Budget 2022 and the Emissions Reduction Plan are both missed opportunities to phase out synthetic nitrogen fertiliser and reduce the dairy herd. This government has given a free pass to intensive dairy – New Zealand’s biggest climate polluter.

The government is providing $339 million for more research and hypothetical techno-fixes to address dairy’s climate pollution. When it comes to dealing with intensive dairy’s greenhouse gas emissions, we already have the solutions – fewer cows, more plant-based regenerative organic farming and a phase-out of synthetic nitrogen fertiliser. That’s what the government should be investing in. We’re five years into this Labour-led government – nature is in crisis and dairy pollution is at an all-time high.  This was the government’s opportunity to ensure meaningful change for the environment finally gets delivered this term – it appears they’ve missed it.

Christine Rose is a Greenpeace Aotearoa campaigner

Keep going!