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2021 Budget: CTU welcomes progress, but more needed to address the challenges of Building Back Better

The Council of Trade Unions welcomes the Government’s investments in 2021 Budget released today.

“We particularly welcome the spending on improving income support which will reduce all poverty including child poverty. However, the Budget should have gone further to secure essential public services for New Zealanders, and to deliver on the Government’s commitment to build back better,” said CTU Economist Craig Renney who was at today’s Budget Lockup

“It was pleasing to see the investment in rail, in Māori housing, and in restoring the Training Incentive Allowance. These are signals that the Government is committed to moving in the right direction for working Kiwis and for those who want work. But they also need to make sure that they have funded the basics. Health purchasing (which excludes vaccines and MIQ spending) rose by well short of the amount necessary to keep up with the estimated $1.3bn of annual cost pressures. ECE funding rises by 1.2% – but inflation is forecast to be 2.4%, so it is a cut in real terms. There was nothing new for Kainga Ora to deliver additional state houses for the 25,000 applicants on the waiting list.”

“COVID has had a huge impact on all our lives. It has shown us how effective we can be when we are unified and stick together. The strength and resilience of the economy can be seen in the Budget in terms of relatively low forecast unemployment, low additional debt, and a return to surplus. The Government is to be congratulated on its management of the economy during COVID. However, this also underlies the ability that the Government has to tackle the historic underinvestment in the economy and public services. Lowering debt now means that opportunities to invest are being missed. Returning to surplus should not come at the cost of community need.”

“The need for on-going government support is clear. This presents an opportunity for the Government to invest in a long-term plan for the delivery of a more productive, sustainable, and inclusive society. This needs to include major investment in the physical and social infrastructure needed for a Just Transition to a low-emissions economy.”

“This budget leaves many of the biggest challenges for future years, but starts to make moves in the right direction. The CTU looks forward to working together with the Government to meet the challenges of Building Back Better,” Renney said. 

Download the CTU’s full budget analysis here.