We already know that National’s big economic plan this budget is a tax swap from working Kiwis to the rich that will not affect growth but will increase inequality. There’s some money for science and Kiwirail, which is good but only partially reverses the cuts that National imposed last year. The two big items in the budget that the Nats have control over (assuming no cuts to benefits or super) are education and health. The increases in these two sectors are the things to watch.
We know that both sectors are already under stress. People are being turned away from university when they try to upskill themselves, the teachers are facing a protracted negiotation and strike to get small pay rises, and early childhood education is for the chop. In health, preventative healthcare services are being cut left, right, and centre to free up funds for more elective surgeries. As writers here warned in the past, Tony Ryall’s cutting effective and cost-effective services to deliver more ‘countable’ services – a triumph of statistics and PR over good health practice.
The budgets for education and health are so massive that even staying still, providing the same level of service next year as this, requires a large amount of money to counteract inflation, population growth, and, for health, the aging population.
The CTU’s economist, Bill Rosenberg, has calculated that to tread water health needs $555 million more. I can’t attempt an analysis as sophisticated as his for education but roughly: last year’s budget was $11.3 billion. Add 2% to undo last year’s inflation, and 1.8% for expected roll increase. That’s 3.8%. I can’t find out easily how much of the education sector’s expenses incur GST but let’s take a low estimate of a quarter. That’s a further 0.5%. Meaning that education needs another 4.3% or $485 million to just supply the same services it did last year.
Will education and health get the money they need to maintain their services (or, ideally, improve them) or will we see cuts to these core public services?