Govt should defuse NZ's social timebomb – but won't
Even the tiny bit of the tax package directed to low-income people fell flat. Family Boost has significantly helped only a handful of families, while the increase of $25 per week (In Work Tax Credit) was denied all families on benefits, affecting about 200,000 of the very poorest children. In the recession, families that lost paid work also lost access to full Working for Families, an income cut for their children of about $100 per week.
No one worked out how the many spending cuts would be distributed, but they have hurt the poor the most. These changes are too numerous to itemise but include increased transport costs; the reintroduction of prescription charges; a disastrous school lunch system; rising rents, rates and insurance; fewer budget advisory services; cuts to foodbank funding and hardship grants; stripping away support programmes for the disabled; inadequately adjusted benefits and minimum wage; and reduced support for pay equity and the living wage.
The objective is to save money while ignoring the human cost. For example, a scathing report of the Auditor General confirms that Oranga Tamariki took a bulldozer to obeying the call for a 6.5 percent cut in existing social services with no regard to the extreme hurt caused to children and struggling parents. Budget 2025 has already indicated that Working for Families will continue to go backwards with not even inflation adjustments. The 2025 child and youth strategy report shows that over the year to June 2024 the number of children in material poverty continued to increase, there were more avoidable hospitalisations, immunisation rates for babies declined, and there was more food insecurity.
We can see the human costs all around us in homelessness, food insecurity, and ill health. Already we know we rank at the bottom among developed counties for child wellbeing and suicide rates. Abject distress existing alongside where homes sell for $20m-$40m is no longer uncommon, and neither are $6m helicopters of the very rich.
Changes in suicide rates (three-year average), ages 15 to 19 from 2018 to 2022 (or most recent four-year period available). Source: WHO mortality database
At the start of the year, Helen Robinson, CEO of the Auckland City Mission, had a clear warning: 'I am pleading with government for more support, otherwise what we and other food relief agencies in Auckland can provide, will dramatically decrease. This leaves more of Auckland hungry and those already there become more desperate. It is the total antithesis of a thriving city.'
The theory held by this Government is that by reducing the role of government and taxes, the private sector will flourish, and secure well-paid jobs will be created. Instead, as basic economic theory would predict, we have been handed a long and protracted recession with few signs of growth and prosperity. Budget 2025 signals more of the same.
It would be a mistake to wait for simplistic official inequality statistics before we act. Our current destination is a sharply divided country of extreme wealth and extreme poverty with an insecure middle class.
Underfunded and swamped social agencies cannot remove the relentless stress on the people who are invisible in the 'fiscally responsible' economic narrative. The fabricated bogeyman of outsized net government debt is at the core, as the Government pursues balanced budgets and small government-size targets.
A stage one economics student would know the deficit increases automatically in a recession to cushion the decline and stop the economy spiralling into something that looks more like a depression. But our safety nets of social welfare are performing very badly.
Rising unemployment has exposed the inadequacy of social protections. Working for Families, for instance, provides a very poor cushion for children. Many 'working' families do not have enough hours of work and face crippling poverty traps. Future security is undermined as more KiwiSavers cash in for hardship reasons. A record number of the talented young we need to drive the recovery and repair the frayed social fabric have already fled the country.
The Government is fond of comparing its Budget to that of a household. But what prudent household would deliberately undermine the earning capacity of family members?
The primary task for the Budget should be to look after people first, to allow them to meet their food, dental and health needs, education, housing and travel costs, to have a buffer of savings to cushion unexpected shocks and to prepare for old age.
In the social security part of the Budget, NZ Super for all at 65, no matter how rich or whether still in full-time well-paid work, dominates (gross $25 billion). It's a sore thumb standing out alongside much less generous, highly targeted benefits and working for families, paid parental leave, family boost, hardship provisions, accommodation supplement, winter energy and other payments and subsidies. Given the political will, research shows we can easily redirect at least $3b from very wealthy superannuitants to fixing other payments to greatly improve the wellbeing of the young. This will not be enough but it could be a first step to the wide rebalancing needed.
New Zealand has become a country of two halves whose paths rarely cross: a social time bomb with unimaginable consequences. It is a country beguiled by an egalitarian past that is no more.
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NZ Herald
30 minutes ago
- NZ Herald
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A former Temasek International managing director with a prior three-decades career spanning high-profile roles in Singapore's senior administrative service, Tan will explore how bipartisan approaches can unlock long-term investment, accelerate delivery and lift national productivity. The keynote address is billed as challenging delegates to think beyond political cycles and focus on the partnerships, policies, and funding strategies that can transform infrastructure outcomes for generations to come. 'As a nation, we have always viewed infrastructure as strategic to the country's economic growth, prosperity and well-being,' says Tan. 'This cuts across the political spectrum. 'There is broad-based recognition that sustained investment in core infrastructure such as roads, ports, airport and public housing have been an essential element of Singapore's competitive advantage. 'Singaporeans themselves expect no less.' Bishop and Labour's Infrastructure spokesperson, Kieran McAnulty, will later take the conference inside the in-depth discussions on cross-party collaboration taking place, which are critical to unlocking long-term infrastructure progress. On the international front, Tan will be tomorrow by followed by former Taoiseach (Prime Minister) of Ireland Leo Varadkar, who will take the stage to talk on excellence in delivery and ensuring equitable outcomes. He is billed as bringing a global perspective on how governments can deliver major infrastructure projects that not only meet performance targets but also ensure fairness and equity for communities. Leo Varadkar, former Taoiseach of Ireland Varadkar served as Taoiseach from 2017 to 2020 and from 2022 to 2024. Through the Project Ireland 2040 plan, investment in public infrastructure budget more than doubled during his time as Prime Minister from under €6b a year to more than €12b a year with major investments in transport, rural broadband, energy, climate action, healthcare and education. Other sessions will include presentations from Regional Development Minister Shane Jones and Labour leader Chris Hipkins. Infrastructure New Zealand's Strategy and Engagement Manager Katie Bradford, who is also the summit's MC, will host a range of panels throughout the two days. Bradford notes the symposium is an opportunity to explore practical, systems-based thinking for sustainable growth. 'Building Nations provides a platform for the industry to engage in and explore how we can do things differently, using our existing infrastructure more effectively and investing in the right assets to achieve a coherent vision for Aotearoa's infrastructure.' The 2025 programme also includes focused sessions on Treaty partnership, regional collaboration, and community inclusion. Panels will examine how the infrastructure sector can work in true partnership with Māori, unlock the potential of local government, and embed diversity and accessibility into infrastructure planning. Winners of the Building Nations Impact awards will be announced at a gala dinner tonight. ● Programme is at Singapore keeps its infrastructure in good health Andrew Tan has a message: 'Singapore transformed itself from a Third World to First World country by putting in place a first-class infrastructure that enhances our global hub status and connectivity with rest of the world, including our region.' The city state lacks both natural resources and a natural hinterland. The upshot is the Singaporean Government takes a long-term view towards infrastructure, starting with optimal land use to balance the needs of current versus future generations. 'We have developed long-term concept plans and master plans for the whole island, taking a 30-40 years' timeframe down to actionable five-year timeframes,' says Tan. 'The beauty is not in the planning but having a process that allows close co-ordination across government departments along with consultations with the private sector and civil society, to the final execution of these plans. This requires trust and confidence in the process, transparency and open communications, especially in land sales/allocation, bidding for projects and their evaluation.' Andrew Tan was formerly managing director with Temasek International; a global investment firm headquartered in Singapore. He joined as an operating partner in the Enterprise Development Group, and later as managing director of the new Strategy Office.' Singapore looks after its infrastructure. Photo / 123rf Prior to joining Temasek, Tan spent nearly three decades with the Singapore Administrative Service in senior positions across key agencies across defence and foreign affairs, environment and water resources and transport. He also served in the Prime Minister's Office as the principal private secretary to Senior Minister/Minister Mentor Lee Kuan Yew. He later became CEO of the National Environment Agency and founding director of the Centre for Liveable Cities, He was also CEO of the Maritime and Port Authority of Singapore (MPA). These days he holds a number or private sector roles. Tan makes the point the bulk of the funding for basic infrastructure in Singapore comes from the Government's budget. 'Over the decades, the Government has been able to generate surpluses as well as maintain healthy reserves. 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Rather than simply outright sales of land, the GLS allows the Government to shape the developments in line with its strategic objectives based on various planning parameters and built-in incentives. 'It has been used for urban renewal after our independence, later, positioning Singapore as a tourism hub, and business and financial hub in the 2000s, as well as heritage and conservation needs. This ensures that other than receiving revenues from land sales, land is optimised for the greater well-being of the country.' Through the Long-Term Planning Review (LTPR) led by the Urban Redevelopment Authority (URA), the Singapore Government engages the private sector and civil society to define the key features of how they envision Singapore in the future. In the recent review, for example, four themes emerged from public consultations - a Singapore that is Inclusive; Adaptable and Resilient; Sustainable, and Distinctive & Endearing. This feeds into the overall long-term strategies. 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NZ Herald
30 minutes ago
- NZ Herald
Energy crisis threatens NZ economy, time for gentailer reform
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NZ Herald
30 minutes ago
- NZ Herald
NZ's infrastructure challenge: From planning to delivery
The suite of policies, legislative reforms and delivery agencies now in place or emerging has laid the groundwork for a more strategic and responsive approach to our infrastructure needs. But policy is only the beginning. The Government – in fact both sides of the House – have heard the cry for a credible infrastructure pipeline and there have been lots of announcements. New Zealand's first Health Infrastructure Plan was released in April. The Draft National Infrastructure Plan, released for consultation last month, provides a long-term roadmap for investment, identifying priority areas and systemic gaps. City and Regional Deal discussions are underway with Auckland, Western Bay of Plenty and Otago Central Lakes, with the first deal to be agreed by the end of this year. The Government has also announced plans for major infrastructure projects, including 17 Roads of National Significance. There is also – rightly – a growing recognition of the need to make the most of what we have got and to invest in asset maintenance and renewal. Government is now talking about the need for asset management plans – and we should all be loudly supporting this. We need to make asset maintenance as sexy – if not sexier – than the big new projects. We must prioritise our infrastructure spend on looking after what we already have so that each of us can drop our kids off to warm, dry classrooms, driving on pothole-free roads (not flooded by water from leaky pipes) and have access to well-maintained hospitals. This is just as important as the big new projects and political announcements on long-term programmes to look after our assets should be celebrated. Sarah Sinclair. Photo / Supplied Government is now talking about the need for asset management plans – and we should all be loudly supporting this. We need to make asset maintenance as sexy – if not sexier – than the big new projects. Sarah Sinclair These developments mark a significant shift toward a more co-ordinated and proactive infrastructure system. But they are not, in themselves, sufficient to guarantee delivery. In June, MinterEllisonRuddWatts hosted Adrian Dwyer, chief executive of Infrastructure Partnerships Australia, along with other representatives from the construction and infrastructure sector in Australia. We heard that there is an opportunity right now to capitalise on the outgoing tide of infrastructure investment in the Australian transport sector to redirect skill and delivery capability to New Zealand. We have a window of opportunity to attract the capability and capacity of the Australian market but we need to move fast. So, what's required to move from planning to delivery? The focus must be on translating our project pipeline into execution getting projects off the drawing board and into the ground and on locking in asset maintenance and renewal programmes that make the most of what we already have - and both need to happen quickly. To achieve delivery momentum on infrastructure projects we need to focus on certainty and collaboration: Certainty to give the necessary confidence ... Of pipeline: There is no doubt that the sector needs a stable. long-term reliable pipeline with political consensus. We have heard from Australian sector participants that it is pipeline and political credibility that enables the market to plan and resource. Investors just need to know what is coming in the next five years and that they are 'real' projects. This should include the new capital projects as well as long-term asset maintenance and renewal programmes – so the whole supply chain can confidently invest in people, equipment, technology and other resources. Of funding: the credibility of the pipeline relies heavily on funding certainty - longer-term funding certainty is needed for projects and long-term maintenance programmes so businesses can invest in capability, technology and resources. And if we are serious about encouraging the private sector to bring ideas, then showing the pathway to how market-led proposals (previously known as unsolicited bids) are able to be funded – and how new funding tools will be used - would really show a commitment to encouraging innovative solutions. This requires a frank discussion of how, as a nation, we are prepared to pay. We can't announce projects without being clear as to how we are going to pay for them. There's no particular magic to this: we have to pay for the infrastructure we need, so what is the best and fairest way to do this? Is it through user charges, tolls, land sales, asset sales, targeted rates, levies, normal rates or national taxes? The chances are it will be a mix of these in a way that reflects the value to our communities and the benefits that infrastructure brings both directly and indirectly. Of regulation: For infrastructure delivery, regulatory certainty is essential. Investors and developers need to know what rules apply, how long approvals will take, and what conditions will be imposed. This circles back to bipartisan support as we need to achieve a degree of certainty that legislation will not be overturned every three years. Of risk: Projects can falter because of complex, risk-heavy procurements. One key lesson from Australia is that sustainable contractual frameworks and appropriate risk allocation attracts the market. Similarly, de-risking early has contributed to Canada's success. Collaboration Between political parties: Industry participants have long been calling for a bipartisan approach to infrastructure delivery. There are encouraging green shoots from both sides of the House as politicians appear to recognise this as a roadblock to attracting private investment (with their experience and resources), but more concrete agreement is required in the form of a finalised long-term infrastructure plans and announcements. Between central and local government: We also need better collaboration between central and local government. Regional deals are an opportunity to achieve consensus on infrastructure priorities and funding tools that will provide local benefits. Transparent criteria and public engagement will be key to building trust in these decisions. With the private sector and iwi: Attracting private capital (and most notably the experience and capability it brings) is simply essential to addressing New Zealand's infrastructure deficit. We need a fundamental mind shift towards embracing private capital, whether it be international or local. And let's think about how private capital can play a part in bundled long-term maintenance programmes as well as the big new projects. We need to leverage the capabilities and resources required to fulfil our infrastructure vision. In many cases, those will come from overseas (and that's okay). We must also build on the growing recognition of iwi as sophisticated investment partners who offer a strategic advantage and a quadruple bottom-line approach that has the long-term health and wellbeing of our country and communities at the heart of their investment decisions. With communities: Infrastructure projects do not exist in a vacuum. They are there to serve communities. Public engagement is not just a legal requirement — it's a strategic necessity. Community engagement and education will help accelerate our infrastructure build. We need to get the public on board with infrastructure spend and the need to invest in asset maintenance, moving from a fixation on upfront cost to a focus on long-term gain. Articulating and quantifying the social return of infrastructure will help with this. In procurement: New Zealand needs to be open to more collaborative procurement models. A more interactive and flexible procurement process has been a key enabler in maximising value and delivering outcomes in both Australia and Canada. From vision to reality New Zealand has made impressive strides in reforming its infrastructure system. The policy settings are sound, the institutions are evolving, and the appetite for delivery is strong. But the journey from vision to reality requires more than good intentions. We need to act now, with certainty and collaboration, to enable New Zealanders to live, work, and thrive. If we get the delivery right, the benefits will be felt for generations. MinterEllisonRuddWatts is an advertising sponsor of the Herald's Infrastructure report.
