Budget cuts: Labour warns of reckless impact on families, community services

Labour's Finance spokesperson, Barbara Edmonds, says the Government's deep budget cuts are "dangerous and reckless," and warns that they will negatively impact Pacific communities and overstretch frontline services, which are already struggling with high demand and limited resources.

The Government's Budget operating allowance has decreased from $2.4 billion to just $1.3 billion.

In an interview on Pacific Mornings, Edmonds says, "A really easy example is today, we have senior doctors going on strike. They've been on strike since midnight last evening, and what we're seeing is that there are going to be deeper cuts to public services.”

She highlights growing concerns from community organisations.

“At the moment, a number of community providers are saying the Government slashed their budget, but the demand is really high. So, where are we going to send these people who need help?”

In a speech earlier this week, Finance Minister Nicola Willis reaffirmed the Government’s commitment to growth in this year’s Budget while addressing the reduction of the operating allowance.

“New Zealand is still recovering from the economic damage inflicted during the Covid period, and we’re now facing the headwinds of further global instability.

“There is a pressing need for greater investments in our health system, our education system, our defence force and other areas, and very little money to pay for those investments.”

Edmonds dismisses the Government’s claim that current financial pressures stem solely from Labour’s past borrowing during the Covid-19 pandemic.

Nicola Willis is the Minister of Finance, Minister for Economic Growth and Minister for Social Investment. Photo/Nicola Willis Facebook

Edmonds says Willis borrowed significantly last year to fund tax cuts.

"Last year in her budget, she borrowed more money than Grant Robertson ever did, except at the height of Covid… She borrowed $12 billion to pay for tax cuts.

“They had $2.9 billion for landlords, $216 million put aside for heated tobacco products. So she says there's no lolly scramble this year. Well, that's because she had it last year.”

Watch Barbara Edmonds' full interview below.

Edmonds is concerned about possible cuts to KiwiSaver employer contributions and Best Start payments, arguing that these would disproportionately affect lower-income and Pacific families.

"It'll be interesting to see where they go in a couple of weeks' time, whether they cut that even further.

“Next week, the Reserve Bank will come out with their financial stability report. That'll be providing some pretty clear signals of how they see the system in New Zealand, and sort of a sign of what may happen a couple of weeks later with the OCR decision.”

Budget 2024 saw a cut of $26 million for Pacific peoples. Photo/Treasury