May 20, 2011

The Budget and what it means for Maori

The Government delivered the budget yesterday. New Zealanders expected Bill English to deliver a strict budget, but yesterday’s dose of austerity went beyond reason. To be fair, the government is attempting to reduce the deficit and return to surplus within the next few years. However, the prescription the Nats put forward is damaging and visionless. Most New Zealanders will be worse off under this budget. Bill English has taken the knife to Working For Families, KiwiSaver, education (including student loans) and health. But what does it all mean for Maori?

Firstly, the Budget is not all bad news. Funding for community law centres will be increased and Whanau Ora will be boosted by $30m. Iwi will also have the opportunity to invest in State Assets (whether this will benefit Maori is open to debate) and there is $20m in new funding for Maori education. There is $25m in new funding for social services as well and $2m to support Maori engagement with the constitutional review.

Having said that, this is peanuts. Take Whanau Ora, one cannot deliver a high quality nationwide system with only $30m. $30m will deliver a half-caste shitty version in a couple of centres, but $30m will not deliver a nationwide revolutionary approach to social services. Take the funding for Maori education as well. The funding is spread across four years and will not address the causes of Maori underachievement. The funding is targeted at language initiatives and transport assistance. Nice to haves really. The funding should be addressing the structural causes of Maori underachievement, like whether or not Maori are suited to the learning environment adopted in most schools.

The big win for Maori, or more accurately iwi, is asset sales. The iwi leaders have made no secret of their intention to snap up shares in our SOE’s when the companies are floated. I personally think that there is more benefit for Maori in having SOE’s remain in government hands. However, I am aware that some would mount a compelling argument otherwise. The government intends to partially privatise Air New Zealand and four energy companies. Maori are big players in the energy sector, especially geothermal power, and I am sure iwi will not miss the chance to solidify their place at the top of the sector. Tainui has also, in the past at least, shown interest in Auckland Airport and Air New Zealand – two of New Zealand’s most important strategic assets. Tuku Morgan must be frothing at the mouth at the thought of the opportunity to get his hands on a small part of Air New Zealand.

In this post I also want to outline some of the big changes that will affect Maori. I’ll start with Working For Families:      

Working For Families

Working For Families cuts are not confined to high income earners. Middle and low income earners will be affected as well through a combination of lower thresholds, higher abatements and payment freezes. The changes will be phased in over seven years. A middle income family on $70,000 will be $20 worse off per week. The government provides a number of examples that show an increase in payments for low income families, however the figures do not take into account inflation. Families are actually facing a decrease in WFF payments in real terms. A large number of Maori whanau access WFF so any changes will adversely affect the standard of living for Maori. With the rising cost of living many Maori fail to balance the budget each week. With WFF cuts balancing the budget just got harder.  

Education and Health

Education and health are the big winners in today’s budget. Both will receive sub-inflation increases in funding, so in real terms both sectors are facing cuts. Yup, in this budget a sub-inflation increase counts as a win. Cuts to education and health will affect all New Zealanders, but especially Maori. Maori underachievement needs to be addressed, but there is little room in the budget to work towards improving education outcomes for Maori. Essentially, there is little in the budget beyond funding for operational costs. The PPTA claims schools will have to recover the cut in funding through an increase in fees and donations. This means low decile schools, i.e. schools with a significant Maori roll, will suffer as low income parents are less likely to pay donations or meet compulsory fees.

Maori access health care at a higher rate than other New Zealanders. Therefore, a deterioration in services will affect Maori disproportionately. DHB’s will be under further pressure to find areas to cut. I would speculate that some of the first areas to come under the knife will be health initiatives targeted at Maori. Why? Because Maori are not going to fight back.

Student Loans

Students who are in default for more than one year will have their access to student loans restricted. For example, Maori living overseas who, for practical reasons, are not servicing their student loans will not be able to return and access the student loan scheme. Furthermore, access to student loans for those over 55 will be restricted to course fees only and part-time students will no longer be able to access course related costs. This is discriminatory and unfair. Maori will be further discouraged from pursuing higher education. Thanks, National.  


The government intends to halve their contribution to your KiwiSaver account and tax employer contributions. The compulsory employee and employer contribution will also rise to 3%. This will deter many low and middle income earners who are feeling the pressure of the rising cost of living. Again, this will disproportionately affect Maori who tend to be low-income earners.

Public Service

The government has signalled an intention to trim almost $1b from the public service. Job insecurity permeates the public service at the moment and today’s budget will add further pressure to cut, cut, cut. Maori make up a significant proportion of the public sector and further job cuts will affect the Maori unemployment rate.

Overall though, Maori will be worse off under this budget. Maori will find it harder to access education, under WFF cuts Maori families will struggle to keep up with the rising cost of living and Maori will find it harder to access decent healthcare. Private debt among Maori will also increase as the KiwiSaver changes begin to take effect. Predictably, there is nothing in the budget to offset this.

Yesterday’s budget would have been the perfect time for the Maori Party to walk away from the supply and confidence agreement and send a message to the Maori electorate. The Maori Party desperately needs to steal the narrative from Hone. The Maori Party MUST steal Hone’s thunder. The party is becoming increasingly irrelevant and will remain so unless they do something in line with Maori interests. Voting for cuts, cuts and more cuts to government spending is not consistent with Maori interests. Should loyalty to the Nats come before what is good for Maori? Fuck no. But the Maori Party seem to think so. I am sick of this bullshit “best to be in government” fantasy that the Maori Party deploy whenever they do something dumb or something counter to what is good for MOST Maori. There is no harm in making a statement in an election year. There is nothing the Maori Party will achieve within the next six months as the Nats are suffering an unacceptable decline in redneck support. The Nats will not feed the perception that they are caving to the Maori Party. If the Maori Party voted against the budget they would have taken one step towards recovering the principled brand they once possessed. But no. The Maori Party have only themselves to blame. They destroyed their brand and seem resolute in not wanting to rebuild it.

If you’re Maori, book a ticket to Australia. Things just got a lot worse here. If things continue the way they are in New Zealand, then I’m out of here once I graduate. There is no future in New Zealand unless you’re Tuku Morgan or Graeme Hart.   


  1. I want Tainui to buy Air NZ just to watch National supporters go 'no, wait, that wasn't what we meant to happen...'

  2. I want Tainui to buy Air NZ just to watch National supporters go 'no, wait, that wasn't what we meant to happen...'

    Funniest thing I've read about the Budget yet. Thanks!

  3. tuku morgan is getting castrated -

    he cannot even tell the time let alone the truth

    besides what did air nz do to deserve the attention from morgan?
    he will bleed it dry - and hire in 3 qc - two are not sufficient at the momemnt costing thousands of bucks to avoid being accountable
    polly abraham

  4. A major positive is that the rating agencies are happy with the budget. Remember that the global economy is still in a fragile state and that NZ and Australia have been fortunate in keeping unemployment below 10% given the potential impact of the GFC.

  5. In a recession, government spending on social assistance needs to increase, or people will die. At the very least, the effect of poverty will linger, leading to increased health costs and severely influencing the ability of people to climb up the ladder when trends reverse and we go into a boom economy. The time to decrease surplus and replay loans is when everything is going well. I honestly feel like weeping right now. National is destroying this country.

  6. Are things really better in Australia? I note that $3.8 billion will be cut in the current year and that their budget also proposes much higher cuts further out. Stay here I reckon.



1. Anonymous comments will be rejected. Please use your real name or a pseudonym/moniker/etc...
2. No personal abuse. Defamatory comments will be rejected.
3. I'll reject any comment that isn't in good taste.