Winners make gains at the expense of the strugglers

Thursday, 22 May 2025

Janet Wilson is a regular opinion contributor and a freelance journalist who has also worked in communications, including with the National Party.

OPINION: It was a Budget that, for all Nicola Willis’ efforts to talk it down, promised much, while delivering little. Fiscal repair and economic growth, a pledge to increase spending in core services while getting to that holy grail of a faster return to surplus were her avowed Budget 2025 goals.

Did she achieve it?

No, she didn’t. All Budgets are an inventory of winners and losers, but 2025’s was particularly so.

The winners – more pensioners getting a rates rebate, businesses getting an accelerated tax rebate – were more than offset by the losers. Most notably teenagers effectively being cut loose from the country’s welfare safety net.

Making mums and dads responsible for their unemployed 18 and 19 year olds will no doubt elicit nods of approval in the rural and urban heartland, but how effective this move will prove to be is debatable.

Means-testing parents to gauge their ability to support their adolescent kids will no doubt reveal that most of them are in no position to do that – which is why they applied for Jobseeker in the first place.

Is that going to get them “off the couch playing PlayStation all day” as Willis told the lock-up? Probably not in the first instance, as the policy won’t be introduced until 2027.

But it suggests Budget 2025 won’t be one that’s defined by growth so much as growth-at-someone-else’s-expense.

Before Thursday’s announcement, though, came the crumbs which Willis dropped, Hansel-and-Gretel-like, in the weeks leading up to today. The most contentious of which was the $577 million over four years for increased film and television production rebates and the $100 million to the Elevate venture capital fund.

Willis may well have thought that giving a leg-up to mid-sized start-ups and more than doubling the government’s film rebate subsidy thereby allegedly “saving” it in the process were the kind of centrist business-friendly policies that win over the middle vote.

Except when it’s judged against the pearl-clutching debacle that was the pay equity row it becomes a particularly cruel game of winners and losers.

Up the ladder of fortune go the tech-bros and production companies, down slide teachers, nurses, and carers. The former are collectively $667 million better off, while the latter are potentially $12.8 billion – the figure Willis says was set aside to fight the claims – worse off.

And while it was a Budget crippled with rising deficits and a lower tax take in the face of increasing geopolitical uncertainty, it also lacked ambition.

Increasing Kiwisaver employer and employee contributions from 3% to 4% was in line with the Retirement Commission’s review recommendations, but it’s illustrative of the increasing risk-averseness Governments acquire once in power.

Even if Willis was concerned about the cost of employer contributions eating into businesses bottom lines, gradually increasing employee contributions from 4%, to 6%, to even 8%, would have been a much more meaningful contribution to the fiscal car-crash the country faces as superannuitants’ numbers swell over the coming years.

Meanwhile, halving the Government’s contribution to $260.72 a year seems overly parsimonious when you consider the present $521 yearly contribution only costs $1.1 billion. But it epitomises the sea of red sloshing around the Government’s books – red that’s set to stay that way for the next four years at least.

Which means that Willis had no option but to put peas under walnut shells – it’s just who gets the peas and who doesn’t which delineates the Government’s priorities. Unsurprisingly that includes business and the middle classes. Willis’ contention in the media lockup that this Budget would benefit working families is the kind of bald-faced poppycock that all politicians indulge in when trying to get their policies over the line.

In fact, nothing could be further from the truth.

And while Budget 2025 adhered to Willis’ promise to increase spending in health, education, law and order and defence, there was little if anything for the strugglers – a voting niche whose numbers have surged recently. Giving households that earn less than $100,000 an average extra $14 a fortnight is well intentioned but it’s nothing like relief when butter is at $10 for a 500-gram pack.

Rather than providing relief to those most in need amongst us, Budget 2025 only seeks to further entrench the inequity around us while leaving no-one satisfied.

The books may have been balanced, but at a price for a coalition that will soon consider its electoral chances in 2026. Because Budget 2025 has created a determined voting bloc of anti-Right protesters, as the hundreds of protesters who gathered in front of Parliament during the Budget announcement attest.

They’re the middle-class – once a voting bloc National purported to represent – many of whom can no longer contest their cases, whose ranks have increased with the addition of parents of unemployed teens.

Together, their antipathy towards the Government has made its chances of re-election in 2026 just that much harder.

This column has been amended to remove an incorrect reference to the savings expected from changes to Jobseeker eligibility for 18 and 19-year-olds. The figure is estimated to be roughly $80m a year, not $1.7b over four years as originally stated. The correction was made at 5.45pm on May 23.