Mixed bag in Budget 2020

Packages for Māori ($900 million (m)) and Pasifika ($193m) focused initiatives are a comparatively small part of the $50 billion (bn) budget. While these initiatives represent new and much need funding, they will not address the enduring inequities in health, education, housing, and social services experienced by Māori and Pasifika. There is still room in the kitty from the unallocated funding to make some transformational change in these areas, and future spending announcements will be scrutinised carefully. 

Housing

The big housing announcement of Budget 2020 was the pledge to build 6,000 new state houses and 2,000 transitional houses in partnership with housing providers over the next four years. This is in addition to the 6,400 state houses announced in 2018, and 1,000 transitional houses announced February this year. 

Housing has been a critical public issue and a political hot potato for several years, with successive governments failing to address the unaffordable housing crisis. The state house waiting list is currently at 15,000, trebling since 2017. While the additional investment is welcome and there is a clear need, the failure of the ambitious targets of KiwiBuild leave questions as to how the Government will meet this pledge.

Additional housing support includes $100m of rent subsidy, and a $56m boost to the Warmer Kiwi Homes programme. The boost will fund insulation and/or heating retrofits on an additional 9,000 homes. On top of this, the proportion of costs will be increased for low-income households, from 67 percent to 90 percent.

Health

At first glance, there are no real surprises in Budget 2020 in the health budget – the headline numbers focus on the substantial increase in funding to District Health Boards (DHBs) announced pre-Budget day ($3.93 billion). There is new funding for implementing the Maternal Action Plan ($120m) and publicly funded medicines ($160m), as well as continuation of funding announced last year to support New Zealanders with disabilities to live good lives ($832.5m). Last year’s focus on mental health was missing in the announcements, a surprising omission given the relationship between mental wellbeing and sudden change in employment status.

But the 124 page Vote Health overview hides substantial increases in funding for preventing and reducing homelessness, and primary health care initiatives. These initiatives include a free consultation (including eye check) for SuperGold Card holders, and a boost to funding for Primary Health Organisations (PHOs). This funding ensures reduced patient co-payments can be retained, and contributes to primary health care access. In addition, mental health funding has increased by $40 million (m) with an additional $15m allocated as part of the COVID-19 response package.

Health equity is the loser in this year’s budget though. While a further $136 million over two years for Māori providers via the increase in Whānau Ora funding is welcome, the Te Ao Auahatanga Hauora Māori fund to improve Māori health outcomes remains woefully underfunded, and there was no new health funding for Pasifika.

Social services

The three headline figures for social service funding were for family and sexual violence services ($183m), disability support services, such as vocational and community programmes ($43.3m), and for Heartland Services, hubs in provincial or rural areas acting as focal points for government and non-government agency services ($19.8m).  There is also additional funding to response services for victims of elder abuse, as sadly the need for these services continues to rise.

There are several funding initiatives for refugees as part of the budget, including funding for refugee family reunification ($22.2m), increasing visa processing capacity for refugee and protected person claims ($5.4m), and extending the Community Organisation Refugee Sponsorship resettlement pilot for three more years ($5.6m).

While there were two packages of support for social sector services and community groups announced as part of the COVID-19 response to meet increased demand ($27m and $30m), there does not appear to be any further funding in the budget. These services and groups will inevitably face ongoing demands as unemployment and child poverty increases, and whānau and communities remain vulnerable and in distress. It remains to be seen how the Government will address the increased demand over time.

Education

An additional 200,000 vulnerable children will be receiving lunch at school under this budget, a commitment to reducing Child Poverty that is welcome. Other education initiatives include $79.7m for learning support, including extra support for English as Second Language (ESOL) and the Student High Health Needs Fund. However, there is no funding to support teachers facing increasingly complex student needs in schools, including mental health concerns and family violence issues.

Kōhanga reo receives a much needed boost with $200m in additional funding over the next four years, including $93.4m to meet staffing pressures. Te Reo Māori revitalisation also received $200m, making a total $400m increase in funding for Māori language education. The Associate Minister of Education, Hon Jenny Salesa, says Pasifika education initiatives of up to $80m will be announced in the near future.

School operations grants and school property funding both see small increases in this budget. The School Investment Package, announced in December last year, sees $400m capital funding for over 2,000 schools. Schools’ and Kura operations grants rise by 1.6 percent, with additional funding for heat, light, and water. There’s allocation for a 3.5 percent pay increase for Early Childhood Education (ECE) teacher’s pay, and a mild increase in ECE subsidies, and one-off funding of $3.4m for pay equity claims.