A couple of years ago I told the Labour government, in an RNZ interview regarding university funding, that we couldn’t eat their ghost chips. I stand by that.
But it also means that, in the face of a government that is both “going for growth” and in charge of a once-in-a-lifetime science system reform process, I have no compunction saying in response to a budget that has NOTHING to compensate the science system for drastic cuts to funding both last year and this: Bro. Monique says you’re dumb.
Nicola Gaston is a professor in the department of physics at the University of Auckland and co-director of the MacDiarmid Institute
There are little nuggets scattered throughout the budget, but let’s be clear: they are small scale and will not relieve the crisis children and whānau are in today. Budget 2025 fails to deliver the bold investment required to build the foundation for a thriving future. The real challenge for the government is to match its investment rhetoric with being brave and investing comprehensively in services that we know improve lives.
There are clear indications that things are not OK. Lest we forget: recently Aotearoa scored towards the bottom in all child wellbeing rankings according to Unicef, there’s been a 35% increase in reports of concern for children in the last year, and there’s a worsening picture for children in rates of poverty, violence, education and mental health according to the Salvation Army’s State of the Nation Report.
We can’t keep waiting for investment, it is needed now in interventions for children and whānau at risk, poverty reduction, and fair pay that recognises the value the social sector workforce brings. Community must have a revitalised role with services devolved to community, iwi and hapū.
Governments choose where to invest. There are trade-offs. Once you improve the lives of whānau, you set the foundation for all our future.
Belinda Himiona is chief executive at Te Pai Ora SSPA (Social Service Providers Aotearoa)
Holly Bennett: Plenty of positive initiatives
Budget 2025 might have been light on “record levels of investment” but there is still plenty to explore. One of the flagship announcements – Investment Boost – will see businesses able to make an immediate 20% deduction of the cost of a new asset from taxable income. A welcome signal that government is actively considering how better policy, rather than more money, can make enduring change.
On the other side of the coin, the government has declared war on “tax cheats who deliberately evade their obligations”. With our national tax debt clocking in at $8.5bn, the government has allocated new funding of $35 million a year for IRD to undertake more tax compliance and collection activities. Equivalent to 0.4% of the debt balance, however, will it be enough?
One thing I didn’t see coming but fully support is the $28 million investment in overhauling how emergency services respond to mental distress. The intention is to move New Zealand’s mental distress 111 calls away from a police-led response to a “mental health response”. Of course the devil will be in the detail: how this vision will be operationalised will be the true marker of success.
Finally, I’m particularly enthused by the prime minister’s personal commitment to support start-up tech businesses. As a founder who is about to embark on my first capital raise for a SaaS (software as a service) platform, it’s a timely reminder that an ambitious, bold and properly funded idea executed in the private sector, rather than by state, is where we most often see the biggest drivers of change.
Holly Bennett (Te Arawa, Ngāti Whakaue, Ngāti Pikiao) is the managing director of lobbying firm Awhi and a former adviser to National ministers.
Oliver Hartwich: Budget 2025 raises serious questions about New Zealand’s financial future
Budget 2025 raises serious questions about New Zealand’s financial future. Although the government says it plans to balance the budget, its approach makes this difficult to believe.
By leaving out the Accident Compensation Corporation (ACC) from the main budget figures, the government isn’t showing the full financial picture. Even with optimistic forecasts, the government is still expecting to spend more money than it receives right up to 2029. This kind of accounting makes it hard for taxpayers to see clearly how much money the country is really spending.
On KiwiSaver, it makes sense to stop government contributions for higher earners. However, increasing the default contribution rate from 3% to 4% means both employees and employers pay more. At a time when the economy is struggling, this extra cost could make it harder for businesses to employ people and reduces individuals’ choices on how to spend their money.
Another concern is the finance minister’s suggestion that more KiwiSaver funds should be invested in New Zealand. Although well-intentioned, it goes against good investment practices. To keep people’s savings safe and growing, investing in many different countries is far better than putting most of it into New Zealand’s small economy.
Budget 2025 needs better financial management and smarter economic decisions to ensure New Zealand’s future prosperity.
Oliver Hartwich is the executive director of The New Zealand Initiative
Jo Monks: Commercial gain prioritised over science motivated by environmental goals
The science system funding plan outlined by the government in Budget 2025 sends a clear signal about prioritising investment in science that is likely to result in commercial gain over science motivated by environmental goals.
Key initiatives announced include the establishment of a “bioeconomy” organisation and promoting gene technology. The government’s focus has been rapidly shifting away from ecological and social science rooted in environmental health, and towards science that will make more money, over recent months.
While all investment in science is positive, the New Zealand Ecological Society is concerned that the commercial focus of today’s science funding announcement will result in further erosion of ecological science in Aotearoa. Meanwhile, strong investment in te taiao and applied ecological research has never been more important.
Dr Jo Monks is acting president of the New Zealand Ecological Society
Gabrielle Baker: Not much to benefit Māori
Feels like a great budget if you want to expand your business (Investment Boost), if you have too much money in your take-home pay cheque and need help to save it (KiwiSaver), or if you make your money building and planning hospitals.
I have a toxic relationship with budget days. I can’t wait to get into the details but, when I attempt it, I’m usually left bewildered. Same again this year. I did note down a couple of things though:
• With Vote Health there are proposed savings under “equity and evidence” and “performance monitoring”, which might give an indication of the perceived value of everyone getting good outcomes.
• Vote Disability Support Services requires time and patience to decipher because last year’s funding was all included in Vote Social Sector and Community Sector, and not under this new Vote. And, for some unclear reason the government plans to spend about $10m less in community-based supports – though spending increases slightly in the other disability support service categories.
Unsurprisingly, given the current climate, there is not much in this budget that will benefit Māori, outside very small investments in Māori wardens. Still, I would have liked to have been pleasantly surprised.
Gabrielle Baker (Ngāpuhi, Ngāti Kuri) is a consultant who has worked in Māori health policy for the past decade
Matthew Roskruge: A bland, arguably bleak, budget with little vision in the numbers
Budget 2025 was billed as a no-BS budget, and it delivered no-frills austerity. The government framed it as a “growth” budget, but there’s little vision in the numbers. The focus is on fiscal discipline, with new spending tightly contained and balanced by cuts and reprioritisations.
Headline winners include small businesses, with modest tax relief for capital investment, and the health sector, which receives a significant boost – especially for infrastructure and access. Defence also fared well, possibly reflecting US-aligned priorities and overdue investment.
But savings came at a cost. The cancellation of pay equity was a major loss, and emergency housing was scaled back. Māori were virtually invisible. Vote Māori was cut again, with funds pushed into general pools. There’s little here that speaks to Māori priorities or the Māori economy.
Education saw multiple tweaks – some welcome, like learning support and literacy – but little new money. A clear trend emerged around “tough on youth” policies: truancy services, youth justice, bootcamps, and cutting Jobseeker access for most 18 to 19-year-olds.
It’s a bland, arguably bleak, budget. NZ First and Act were surprisingly muted. The bigger question is whether this signals a longer-term turn to austerity – or just a tactical reset ahead of election year 2026.
Professor Matthew Roskruge (Te Atiawa, Ngāti Tama) is director of Te Au Rangahau, a Māori business research centre within Massey University’s business school.
Terry Baucher: A bold tax move, but not much love for low-income families
All budgets are a mix of the “The Good, the Bad and the Ugly” and this year is no different. (Though the pay equity reprioritisation probably counts as very fugly.)
From a tax perspective, the Investment Boost tax incentive announced is one of the bolder tax initiatives in recent years. From today, businesses of any size can fully deduct 20% of the value of new assets (or secondhand assets purchased from overseas) in the year of purchase. For example, if a company invested $200,000 in a new plant, $40,000 would be immediately deductible. The remaining $160,000 would be depreciated as normal. There is no cap on this allowance which is also welcome (and a little surprising).
On the other hand, Investment Boost doesn’t come cheap, with an expected cost of $1.7bn per year over the next four years to June 30, 2029 – and, as many women found out last week, a substantial part of that cost will fall on their future pay prospects.
The ghost of Sir Bill English appears
When he was finance minister Sir Bill English made many quite significant changes to KiwiSaver. (See here for a potted history.) The reduction in the government’s contribution to a maximum of $260.72 annually and removal in full for those earning over $180,000 annually is therefore straight out of Sir Bill’s playbook. On the other hand, the proposal to extend KiwiSaver eligibility to 16-17-year-olds is a good move.
Not much love for low-income families
Earlier this year a Treasury paper noted that 30% of all single-parent families faced an effective marginal tax rate of 50% or more. The budget contains changes to the Working for Families which (very) partially addresses this with a lift in the family income threshold from $42,700 to $44,900. However, this has been paid for by means testing the first year of the Best Start tax credit and lifting the Working for Families abatement rate from 27% to 27.5%. (Another very Sir Bill English-type move.)
To put that in context, if the Working for Families threshold had been adjusted for inflation since it was last set in June 2018, it would now be $54,650 or nearly $10,000 more. (Also worth noting that an additional $154m over four years was found to increase the abatement income threshold for SuperGold cardholders from $31,510 to $45,000. That’s welcome, but it’s interesting to compare this with the assistance given to younger families and workers whose taxes pay for NZ Super.)
Overall, a growth budget perhaps but one that relies on several sleight-of-hand moves and does next to nothing to address the problem of low-income families facing high effective marginal tax rates.
Terry Baucher is a tax specialist
Lara Greaves: Won’t somebody please think of the swing voters?
We have an election next year. As someone who studies public opinion, my thoughts focus on the swing voters.
The New Zealand Attitudes and Values Study has shown around 10% of major party voters swap between Labour and National across elections. The Election Study has shown these voters are more likely to be women, and under 40. Sadly, studies like this are few and far between, given cuts to research funding.
How might this budget land with swing voters? On the face of it, it is easy to see how cuts to pay equity settlements, Best Start and government Kiwisaver contributions could put these voters off. We have already seen Labour frame the budget as an attack on women.
To counter, I suspect National would point to spending in education and health. However, to cancel out the pay equity issue, is this and the growth focus enough? Will their favourite, the right track/wrong track indicator, turn around before Election 2026? And will voters feel a difference in their lives? I’ll be eagerly awaiting the post-budget polls and what next year brings.
Lara Greaves is an associate professor in politics at Victoria University of Wellington
Duncan Greive: Not much for the media sector to get excited about
After a week dominated by a c-bomb in a column, media minister Paul Goldsmith appeared at last Friday’s Voyager Media Awards with a joke about the kind of language he and prime minister Chris Luxon use when confronted with a problem: “flip. Or, if it’s really bad, flipping heck”. On an absolute basis, this year’s budget probably warrants a flipping heck, but when measured against expectations it barely rates a flip.
RNZ is the big loser, seeing $4.6m a year vanish from its annual funding. It’s a chunky sum, equivalent to 7% of its budget, but on some level it might be relieved it wasn’t considerably worse, given that it received a $26m annual boost in 2023. Any savings have largely been banked by the government, with only $1.6m diverted into “council, community and court reporting across New Zealand”, money which will be distributed by NZ On Air, and earmarked to mirror the Open Justice and Local Democracy schemes. These are “successful programmes with an emphasis on reporting, rather than opinion… so that more local frontline journalists can report on the things that matter to their audiences”, according to Goldsmith – a comment that seems much more like an opinion than reporting.
To put $1.6m a year in perspective, it is around 1% of the scale of the $577m over four years previously announced as topping up the screen production rebate. Some proportion of this will inevitably be taken up by streaming giants, who also will have been pleased to discover that the threat of a 3% digital services tax quietly vanished this week. While understandable given the continued belligerence on trade from the White House, it does tend to make local businesses feel like chumps for playing the last game, where you pay tax and employ people.
Goldsmith’s release ended with the faintest ray of hope, in noting that “New Zealand media, like media around the world, continue to face significant challenges. We need modern legislation, so the media sector is financially sustainable in the years to come. I am considering submissions from the recent consultation on media reform. I will have more information on next steps for media modernisation in the coming months.”
A statement that could have been written at any time in the past decade, and that local media might be forgiven for imagining will be appended to all future media minister releases until the heat death of the universe and/or the robots take over, whichever comes sooner.
Duncan Greive is founder of The Spinoff and a media commentator
Geof Nightingale: A tax bet on economic growth
Despite enormous pressure to steer a faster path to a budget surplus, Nicola Willis’s Budget 2025 contains a surprise tax bet on economic growth. Dubbed “Investment Boost”, the policy will allow accelerated tax depreciation for businesses that buy new assets from today, May 22, 2025. In the first year that a new asset is acquired, the depreciation deduction allowed will be increased by 20% of the cost of that new asset.
The government hopes that this will stimulate business investment, leading to productivity increases and faster economic growth. But it comes at a cost of forgone tax revenue of $1.7bn a year, and that contributes to a further delay in a return to budget surplus, pushing it out another year to 2029.
Other tax measures announced are modest but sensible changes that also contribute to growth. One removes the tax barriers to the use of offshore financing and investment in new infrastructure projects, and the other tweaks the taxation of employee share plans for start-up companies to support the use of equity as compensation for these cash-hungry companies.
The bet on economic growth is the right bet. Economic growth drives tax revenues. Due to the design of our tax system, tax revenues in a growing economy will grow faster than the rate of economic growth. And more tax revenues gives the government of the day choices: debt reduction, infrastructure, and better public services.
Whether these tax and other measures in Budget 2025 will improve our economic growth remains to be seen, but the objective is commendable.
Geof Nightingale is an independent tax adviser
Dr Pam MacNeill: Disability funding in the wrong direction
Framed as ‘improving care for disabled New Zealanders’, the government will increase funding for residential care of disabled people by $60m each year over the next four years, as part of Budget 2025. But are disabled Kiwis being supported by this measure, or are those who would commodify us the ones in receipt of government generosity?
While politicians may believe that modern day institutions are a cost-effective means by which to keep disability funding to a minimum, their proliferation ignores the long-term social and financial costs and consequences of isolation and exclusion. Just look at the staggering expenses associated with the penal system. Also consider the findings of abuse and neglect in institutional care made by the ombudsman and others, and those of the Royal Commission into Abuse in Care.
Disabled people must exert political pressure, through the media and by lobbying politicians, demanding the full rollout of Enabling Good Lives (EGL), which delivers a fairer system grounded in choice and control by disabled people, and the services we say we require. We’ve been waiting for this system of disability funding for many years now. Let’s hold politicians to account for delivering this at the next election.
Pam MacNeill is the managing director of Disability Responsiveness New Zealand