Category: Economy

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Reverse Robin Hood Budget steals from working people

Source: Team effort to rescue teens

Budget 2025 takes $12.8bn from low-income, female dominated workforces to prop up the Government’s failed economic policies, said NZCTU Te Kauae Kaimahi Economist Craig Renney.

“The Government has promised this would be a growth budget, yet it has effectively cut the wages of low-income women workers. We know that one of the best ways to stimulate economic growth is by lifting wages – the Government is doing the opposite,” said Renney.

“The figures released today also showed that the number of people on Jobseekers Support is rising, and higher than forecast just last year. Real wage growth is lower than forecast last year – the Treasury itself says the Budget “lowers wage growth”. This is a Budget that is taking working people backwards.

“The Budget delivers more cuts to investment, including real terms cuts to early childhood education funding. New funding for learning support is largely being delivered by cutting funding from other programmes in education. Māori Development programmes have been cut significantly, as has funding from our media, culture, and heritage institutions.

“Promises made in health aren’t provided with new funding and the destruction of the pay equity process will mean we will continue to lose health workers to Australia, putting further stress on the system.

“Forecasts show we will continue to miss our child poverty targets over the next four years, and we will see thousands of families loose essential income due to cuts to Best Start and Working for Families. The Government is taking money from unemployed 18- and 19-year-olds, while investing nothing in action on climate change.

“Overall, this is a Budget that works by taking away from some of the poorest people in New Zealand, to fund tax cuts for multinationals, increased investment in corrections, the failed charter schools project, and more spending on defence.

“This is a Budget with its priorities all wrong – and working people will be paying the price,” said Renney. 

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Billions missing from health budget

Source: Team effort to rescue teens

New analysis from the New Zealand Council of Trade Unions Te Kauae Kaimahi shows that the health service is likely to be underfunded by between $1.2bn to $2bn at the Budget.

“We have examined the spending decisions and announcements of the Minister of Health over the past few months. These demonstrate a pattern of making a new service promise but not providing any new funding for that new service,” said NZCTU Economist Craig Renney.

“That means the commitments have to be paid out of the existing budget, which is already under huge pressure. These sneaky cuts add up to $1.2bn across 4 years.

“At Budget 2024 the government provided $1.370bn for cost pressures. This has been calculated by the Treasury as simply covering the cost of existing services. The $1.2bn of new spending are all new services on top. If they come from the ‘cost pressure’ payment above, that acts as a direct cut to existing health services.

“Assuming the Treasury cost pressure costs are right, health needs $1.713bn just to stand still at Budget 2025 in direct new funding – and likely a figure closer to $2bn once the unknown costs are added.

 “If this money is coming from pay equity funding, it would be the equivalent of those low-income health workers paying for the new service themselves.

“In opposition, National said that it would “prioritise increases in funding for health and education to account for inflation.” The government now appears to be robbing the very funding set aside for inflation in health to pay for its new priorities, breaking their pre-election promise,” said Renney.

New Announcements
Commitment Annual Amount ($m)
After Hours Care 41
Cancer Medicines 151
Hawkes Bay Endoscopy 0.4
GP Practices 95
Private Sector Support[1] 50
Practice Nurses 6
  343.4                4-year total ($m) 1,223.80

The government has also made the following announcements and has not provided any costing information with those announcements. These costs are likely in the hundreds of millions, but we simply have no current idea about if the government will provide any further resources for them.

Unknown

  • Bonding of Doctors
  • 100 Overseas Doctors
  • 400 graduate registered nurses
  • New Digital Telehealth Service
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Unemployment data shows real weakness behind the headline rate

Source:

Unemployment data released today by Statistics New Zealand shows ongoing weakness in the labour market, with falling employment, falling hours of work, and nearly half of all workers getting a pay rise less than inflation, said NZCTU Te Kauae Kaimahi Economist Craig Renney.

“While the unemployment rate number stayed at 5.1%, the number of people working full-time fell by 45,000 while the number working part-time increased by 25,000. People can’t find all the work they need to get by,” said Renney.

“This data demonstrates that there are now 37,000 more unemployed people than at the last election. Māori unemployment is now at 10.5% and Pacific unemployment is at 10.8%. Employment fell in manufacturing, construction, retail, education, and health care. There are now nearly 3 million fewer hours being worked in the economy.

“The weakness of current economic growth is also being reflected in the wage data. Total weekly gross earnings rose by less than inflation at 2.4% annually. 41% of workers saw no pay rise at all. It’s clear that workers are struggling to get the wage increases they need to keep up with the cost of living.

“Youth unemployment continues to rise. There are now 70,700 15–24-year-olds unemployed and 96,600 are not in employment, education or training. There is no plan to help these younger workers, and they are bearing the brunt of employment change.

“Without changes to the Government’s economic approach, things will likely get worse. In 2022 New Zealand was sixth in the OECD rankings for unemployment. We are now 18th.

“The Budget this month will likely see forecasts of unemployment rising in the future. It’s time to change course and deliver policies that ensure good work and fair pay for all,” said Renney.