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RNZ News
23-05-2025
- Business
- RNZ News
'Bugger-all': Pasifika react to Budget 2025
Photo: RNZ / Samuel Rillstone Key points A Tongan community leader says New Zealand's 2025 Budget is "a disappointment" for Pasifika. Funding for the Ministry for Pacific Peoples (MPP) has decreased by nearly NZ$36 million over the next four years - equating to $9m annually. The ministry saw $26m cut from the previous year's budget. Two initiatives, the Dawn Raids reconciliation programme and the Tauola Business Fund, are being scrapped entirely. The Dawn Raids programme will close in two years saving $420,000 annually. At the same time, the closing of the Tauola Business Fund aimed to support Pacific businesses in New Zealand grow will save $3.5m a year. The Pacific Business Programme will remain, awarding contracts to firms that support Pasifika startups with networking and strategy. The government found NZ$2.7 billion a year through its changes to pay equity, cut its own contributions to KiwiSaver, told 18 and 19 year olds it would no longer pay them to sit on the couch, and introduced a new Investment Boost tax incentive, which is tipped to increase New Zealand's GDP by one percent over the next 20 years. Auckland Tongan community leader Pakilau Manase Lua said the government had targeted the country's most vulnerable. "The Budget overall is just a disappointment," he said. "It was very much a 'B' budget: business, blue National budget and bugger-all for everybody else." Tupu Aotearoa, aimed at reducing the proportion of Pacific peoples who are unemployed, has been slashed by $5.5m a year. Just over $5m remains in the fund, while the rest of the saving will be consolidated into other employment support providers. "Our Pasifika communities are the most vulnerable and as a Tongan, our Tongan communities are the most vulnerable of the lot," Pakilau said. "When you've got so many things that are being cut, you can understand why our communities are so desperate that they'll go to loan sharks, they'll go to pyramid schemes." However, while disappointing, Pakilau said it is in line with what he expected. "You've got a coalition Ministry of Pacific Peoples, you had [David] Seymour saying he wanted to blow it up, so I'm not surprised really." Deputy Labour leader and her party's spokesperson for Pacific peoples Carmel Sepuloni is also disappointed. "It just goes to show their lack of value for Ministry of Pacific Peoples and I think population agencies in general," she said. Sepuloni said she would have thought programmes, such as the Tauola Business Fund, would have been a priority for this government. "Pacific have the highest rates of unemployment, the economy is doing badly, New Zealanders have lost jobs en masse; and disproportionately that has effected Pacific communities." RNZ contacted the Pacific Peoples Minister Dr Shane Reti but was told he was not available for an interview. Finance Minister Nicola Willis told RNZ Morning Report that, while the Budget is responsible, it has something for every New Zealander . "More funding for learning support in our schools; more funding for our hospitals, for our doctors, for our health system. It's called more funding for our police," she said. "Some people like to pretend that more funding just comes from a magic money tree, but actually, we're a country that is borrowing heavily at the moment. "We're a country that has more than doubled its debt, that is in deficit. We do have to manage our books carefully. We've made sure that every single one of those dollars has been very purposed towards services that New Zealanders rely on." Amongst the cuts, a new fund for Pasifika Wardens is being set up at a cost of $250,000 each year. Pakilau said the funding allocated for it is not much. "I suppose it's a good idea, but in the long game it's going to make very little dent in the problems that we're having on the ground, to be honest." Meanwhile, New Zealand's aid commitment to the wider region will decline over the next three years. As a percentage of national income, overseas development assistance had fallen from 33 percent to 23 percent. Pacific aid researcher Dr Terence Wood said this may stop New Zealand from being able to meet international commitments. "The aid budget is still falling, although the government has spent a little bit of extra money to prevent the fall from being as rapid as it had seemed like it was going to be at the last budget," he said.
RNZ News
08-05-2025
- Business
- RNZ News
Christopher Luxon announces boost to capital spend in pre-Budget speech
Photo: RNZ / Samuel Rillstone Capital expenditure - new money set aside in the Budget to maintain or upgrade assets - will be higher than originally forecast when the government delivers its Budget in two weeks' time. In a speech to Business New Zealand on Thursday, the prime minister said the money, which would be split mostly across health, education, defence, and transport, will total $6.8 billion. It means the net capital allowance, once savings identified in the Budget have been accounted for, will increase from the $3.6b previously signalled, to $4b. Last week Finance Minister Nicola Willis cut the operating allowance by half to $1.3b. Christopher Luxon told the business audience the smaller operating allowance was the "right call because keeping our word matters". "I know there are some commentators calling for larger allowances and more spending. "They need to be honest that those decisions will mean more debt, more deficits, and an indefinite delay to New Zealand's return to surplus," Luxon said. Luxon said capital expenditure, including for frontline services like health and education, will be a priority in the 22 May Budget. "In health, education, law and order, defence, and transport my government is prioritising significant new investments. "Each of those areas are a priority for New Zealanders and they require more funding to deliver the quality services Kiwis expect. "But that comes with trade-offs," he said. "Spending more on everything, as some commentators have called for, would mean larger deficits, more debt, and ultimately fewer choices in future budgets as the cost of servicing our debt grows even larger and the prospect of returning to surplus evaporates." Luxon said capital investment would be critical to the country's "growth journey", but he noted that would not happen if "we invest more but continue to lag behind the global technological frontier". "In Budget 2025, we will be allocating the funding we need to give effect to the changes I announced earlier this year, including the establishment of three new Public Research Organisations. "I also know that following a review of the Research and Development Tax Incentive that kicked off last year, the business community has been looking for some certainty on the future of the programme. "That review was required in law, and the final report has not yet been tabled in Parliament," he said. "However, I can confirm today that we are retaining the RDTI in this year's Budget so businesses have the certainty they need to keep investing and keep going for growth." Luxon also announced funding would be provided in the Budget for the government's new Invest NZ agency, which was set up earlier this year to support foreigners wanting to invest here. Luxon said this month's Budget comes alongside a "challenging international backdrop". "Trade tensions overseas have seen growth forecasts revised down across the world, as exporters and consumers come under sustained pressure. "The sharp deterioration of financial markets in early April have somewhat recovered in recent days and weeks, but markets remain volatile." There are greenshoots too though, he said, with ANZ's initial estimate last week that "the smaller operating allowance would support interest rates being 5-10 basis points lower than otherwise." "Meanwhile, Treasury has estimated that with a tighter budget package, interest rates would be up to 30 basis points lower by the end of the forecast period. "For a family with a mortgage, or a farmer or entrepreneur taking on debt to grow their business, that means real financial relief and more opportunity to get ahead," Luxon said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Reuters
08-05-2025
- Business
- Reuters
New Zealand prime minister says government will boost net capital allowance in budget
WELLINGTON, May 8 (Reuters) - New Zealand Prime Minister Christopher Luxon said on Thursday the government plans to increase total capital expenditure allocated in its upcoming budget, boosting investment in health, education, defence and transport portfolios. "The net capital allowance is NZ$4 billion ($2.38 billion) compared to NZ$3.6 billion previously signalled in the Budget Policy Statement," Luxon said in a speech to BusinessNZ in Auckland. The government budget is scheduled for release on May 22. Last week, Finance Minister Nicola Willis said baseline spending in the budget would be reduced to NZ$1.3 billion from a forecast of NZ$2.4 billion. ($1 = 1.6829 New Zealand dollars)
