Budget 2019: Funding an industry to pick up the pieces at the bottom of the cliff


It’s difficult to see the budget as a wellbeing budget when the $1.9 billion for mental health services is overshadowed by the $2.3 billion for four (yes just four) submarine strike aircraft for the airforce. This wasteful defence spending is pandering to New Zealand First’s obsequiousness towards the US. It’s an unhealthy, expensive obsession. We are spending billions to support American global interests. The opposite of an independent foreign policy.

It’s also difficult to see the budget as a wellbeing budget when, most worryingly, spending on health, education and welfare benefits (aside from National Superannuation), as a percentage of GDP, are all expected to track down (yes down!) over the next few years.  For example per capita public health spending will decline from over $3,700 per person in 2020 to just over $3000 per person in 2023. Similar figures apply to education and the payment of welfare benefits.

And again it’s difficult to see this as a wellbeing budget when most of the billions being spent on wellbeing will be spent on an industry funded to pick up the pieces at the bottom of the cliff while the coalition government ignores the holes in the fence at the top. The biggest hole is the low incomes of families, particularly benefit-dependent families, who simply can’t build lives of dignity and self-respect on poverty incomes in a land of plenty.

We know that high levels of inequality result in such things as:

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  • Greater mental health problems
  • More domestic violence
  • Poorer educational outcomes
  • Poorer health outcomes
  • Greater addictions to alcohol, gambling etc

Budget 2019 funds services for the negative outcomes of inequality while refusing to materially increase the incomes of those hanging on in quiet desperation.

(The improvements in income for low income families in the budget are tokenistic and begrudging at best and do not deserve detailing here)

And many of the services funded in the budget will be paid for through private sector contracts which in a very specific way leads to greater inequality. Contractors will always pay the least they think they can get away with to their employees rather than the most they can afford while pocketing the profit.

The only transformation in the budget is a transformation in the meaning of transformation.



  1. Personally I think it would be unwise for an Island nation and extremely suspect of decision makers to leave an Anti Submarine Warfare suite out of its future fleet of Off Shore Patrol Vessels (OPV). With only 2x frigates and 4x P-8 submarine attack thingies. That’s just not enough ASW with 2 of the worlds largest submarine forces with in operational range of New Zealand’s future OPV force. In this situation having an independent Foreign policy would mean if any of them shot at one of our merchant fleet vessels we reserve the right to shoot back.

    Or Defence can suck it up, and leave all competence to the mercs and have the locals play at being a soldier. 1.4% of GDP on defence is the equivalent of – that import of foreign talent, not an independent foreign policy and not the abject failure of homegrown capacity in R&D, so you cannot transfer performance.

    Which is often quite different from public research funded by public funds.

    Anyway, governments, at least around here, also have they’re own agendas regarding money and violence, funding is typically given for furthering those agendas.

    At least until you have an obsessed Prime Minister pursuing fundamental research. Unless it is the a fundamental interest in the nuts and bolts things driving a Prime Minster, of course, but that’s extremely rare. Then it will be unlikely that we see any huge leaps in planing.

    Everything else has trade-offs. Where is the new revenue for additional operational spending? What is NOT operational spending can we borrow against to grow the GDP? Would it have been better to borrow against a state asset program and shift those funds into operational spending instead of robing defence to pay for teachers?

    If pushing money in when there aren’t good ideas that have worthwhile work waiting to be done, then you’ll be funding bad ideas, busywork or unnecessary experiments. That’s very likely the reason why R&D spending is the 2% it is now: It’s the point where the balance between diminishing returns and trade-offs makes the most sense.

  2. Glad you mentioned the military spending. A backward step. But this sort of spending will please some shareholders.

    New Zealand could show the leadership the world really needs, by focusing on coping with climate breakdown and extreme inequality and by promoting itself as a centre for conflict resolution.

    Also our military shouldn’t be buying robots from Israel.

    • Yea because we showed so much leadership in going nuclear free that 100s of other countries followed us right?

      Pragmatism beats ideology every day.

    • So you would happy that the NZDF can’t or won’t be to a similar Chapter 6 and half Peacekeeping/ Peace Stabilisation/ Peace Enforcements Mission like INTERFET in Timor-Leste in 99?

      But since you were an East Timor freedom supporter back in CHCH? I know you Lois as I was an East Timor freedom, but unlike you I can talk the talk and walk the walk as I have got to live with my East Timor experience 365days a year.

      As you are also a Free West Papua supporter and along with Mr Minto, sending Troops into West Papua isn’t going to be a walk in the park and going on my experience from ET and have been involved a couple of TEWT’s ( Tactical Exercise With Troops).

      The Indonesian Government and TNI aren’t going to give up West Papua very easily as their founding Father of the modern Indonesia booted the Dutch out of West Papua with a bit of help from the UN, JFK and Communist/ Socialists supporters in both in NZ and Australia.

      Then we have the long term effects of Climate Change and HADR? The NZDF has to maintain patrols over one sixth of the worlds ocean about 6.1m sq kms of water and be prepared to use lethal and non lethal force IOT defend, protect, deter, deny and delay against foreign fishing boats, NZ interests and protect NZ’s Sea Lanes Of Communications (SLOC’s) in which 95% of all exports and imports go by sea.

      Since the Free market experience from these Neo Lib/ Neo Con economic vandals in NZ has left NZ very vulnerable as all of NZ’s heavy manufacturing has gone he way of the dodo with the medium to light manufacturing very close to being on life support and almost all of NZ’s companies both private and SOE’s hold very little in way of spares as they rely on the standard industry practice of “just in time logistics” which is ok for a landlocked country, but not so great for a country at the ass end of the world and it’s closes neighbor is about 3-4 sailing days away.

  3. Defence is another area that had been largely neglected if we want to play our part in peace keeping and any other missions we need to upgrade our soldiers equipment. We were the laughing stock with our poor soldiers using outdated and sometimes dangerous equipment putting them at risks and not enabling them to carry out their duties etc. Unfortunately we have to invests.

  4. NZ Company tax revenue, $14.5b v Individual (Income) tax revenue $36b. Whose not paying their share?

  5. This is a normal persons guide to arseholism. I’d suggest going to see the documentary.
    I’d like to but I’m stuck in Banjo Country where the people here only generate AO/NZ’s export revenue. Nothing important like banking or accounting for finance companies or selling houses or selling luxury cars to egocentric schmucks or anything like that.
    John Walker – Assholes: A Theory

    As the Earth goes on fire, anyone who lives in + 50 c heat will, against all odds, migrate. What choice do they have? Die, I suppose?
    We need four aircraft carriers fully loaded with ground to air’s plus fighter bombers, plus nuclear carrying drones plus ocean going nuclear armed drones plus semi automatic hand held’s, plus pistols, shot guns, bow and arrows, slingshots and pop guns.
    The budget? Show them our latest budget? They’d all die laughing!
    John Walker above made it abundantly clear to this writer that we, us AO/NZ’ers, are bewitched by ‘arseholes’. We’ve been charmed by snakes.
    I think we’re in bigger trouble than we think and I’ve thought we’ve been in deep shit for awhile now.
    Seriously. It’s time to rewrite the game plan. In its entirety.
    Go to the ANZ, grab jonky by his little diddle, pop him in prison with a serial killer with a pony tail. ( Hey? think of the Instagram ratings? ) then deport all the foreign banksters. ( You honestly think that little $ervant $erpent’s deserted his masters at the Fed Reserve? Jonky will be reporting back to his Wall Street/NYC masters twice daily. I can hear his little mouse-voice whispering our secrets.
    Write off all mortgage debt.
    Re nationalise electricity, rail, etc.
    ( You’re going to think I’m crazy with this one. )
    Create a country wide analogue coms infrastructure to keep everybody in touch. Because all ‘they’ have to do is cut the cable from here to AU. Down goes the internet!
    Then, we’re fucked.
    But see? I’m old so when it all gets to be too much I can afford to ignore my health and just get drunk and/or high. I’ll be dead and likely eaten by someone ( If they’ve got good taste. ) long before it most certainly will get really, really, really, really serious.
    ( Pan fry with birds eye chillies, red curry paste and garlic. Don’t use salt or I’ll be as tough as paula bennett’s G string. Grate fresh ginger, a little turmeric and galangal, simmer and let sit. Steam long grain and brown rice,a squeeze of lemon, let that rest too, then enjoy the irony because I like resting. It’s called planning ahead, alright? Only common people are buried or cremated dahlings. )

  6. Agree wholeheartedly with this post.

    In real terms money is going down for social spending (in part due to demand from our immigration policies) while the budget figures are used to pretend that there is more money for more services, instead of less money per person for services and a tightening of services in real terms.

    It is ambulance at the bottom of the cliff.

  7. For a Greens government with a apparently Labour leader who thinks climate change is ‘our nuclear free moment’ seems like climate was completely missing from the budget. .

    What was missing from the budget? Almost anything green.

    What they should have announced…

    – tax on coal starting at 10% now rising to 100% in 5 years

    – no-registration tax as an incentives for electric vehicles

    – increase tax on imported vehicles with low fuel economy (start at 5%, raise 5% per year until it hits 50%)

    – increase R&D spending on methane emission reduction in agriculture

    – new agency tasked with transferring best farming practices (dairy, dry stock) to poorly performing farms, funded by existing meat industry levy

    – increase R&D spending on converting Taranaki economy to hydrogen production from alternative energy sources

    – mandate 100% renewable power production within 5 years

    – massive investment in energy efficiency (this is by almost a factor of 7x the best way to reduce emissions), including: phase out all incandescent bulbs, subsidise insulation (ceiling, underfloor), free energy efficiency audits from EECA (they used to do this until National canned it, and it was extremely successful),

    – all new houses built and renovations must have solar power and reuse rain water if able to

    – massive investment in rail, including: fully electrify all rail, new regional rail networks, new trains & lines in Wellington, tax all trucks travelling more than 100km (start at 5% per additional 50km rising to 100%), fourth line through Wiri, proper rail to West Auckland, Northland, East Coast

    – proper integrated public transport in cities – one ticket covering the whole network

    – new $300m regional funds for cycling & walking initiatives

    – end Public Private Partnerships in transport where they are demonstrably more expensive e.g. the stupid decision by the previous National government for Transmission Gully to be a PPP at 30% extra cost

    – minimal 40% green space in all cities to be kept

    – public food growing in cities to feed anyone who needs fresh food

    – Green waste being recycled at schools into compost and worm farms

    – Recycling depots at schools and public places everywhere for newspaper, bottles and cans

    – Make all manufacturers and sellers of non non organic packaging that does not decompose be responsible for their disposal of waste packaging that they sell/produce

  8. Agreed.

    In addition, John is right about too many ambulances at the bottom of the cliff we need better fences at the top .

    1. The welfare advisory group concluded strain on low income /beneficaries comes primarily from 70% of their income going on housing . Many of the child poverty /mental health /domestic violence and addiction issues comes from the financial desperation of these people who simply can’t get affordable housing and then struggle to pay for everything else.

    For real wellbeing we need the investment in housing first not just letting private contractors clean up the mess at the bottom of the cliff.

    2. There was also nothing for beneficaries ,other than bland promise to link to wages which will get people another $10 a week by 2021.Oh Rah Rah chaps .Pathetic.9 years of National indifference and now nothing from Labour is utterly soul destroying for our most vulnerable group.Sue Bradford slammed Labour on RNZ the morning after the budget .

    The welfare group recommended a 47 % rise to gain parity and has been completely ignored . There is supposed to be an increase to the amount beneficaries can earn , but there is no quantification of this in the budget ,see page 52/59.More PR candy floss .

    The amount currently allowed is $60 net per week on $200 benefit and has not been raised for 20 years .It should be around $150 net per week if it had been linked to the CPI.

    People don’t need ambulances when they have an affordable house and an income which affords some minimal dignity .

    Loved Countryboy’s Rant and well done John .

    Wellbeing for corporations who signed to the TPPA.
    Wellbeing for property owners who don’t pay a capital gains tax.
    Wellbeing for farmers who’s methane helps the planet cook faster .
    Wellbeing for large offshore digital companies that still don’t pay tax

    Bloody Classic Labour .

    I think we should change MMP so that instead of voting for an electorate and party vote you could have two party votes if you preferred .We could double the green vote overnight .

    Sorry Labour , I’m over it , its 2 green votes from me .

  9. “An independent foreign policy”, as John calls it, would cost NZ a multiple of $2.3 billion. Anyone ever looked up Switzerland’s military spending?

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