Budget 2024: Inflation-Adjusted Spending Cuts in Health and Tertiary Education

As the Economic and Fiscal Update (EFU) in Budget 2024 (p.146) makes clear the current National Government is committed to cutting spending on health and education in real terms, that is, once inflation is taken into account, from 2024 to 2027. It never ceases to amaze and frustrate me that most of New Zealand's political journalists and commentators are apparently incapable of doing basic arithmetic.

Why does this matter? According to the EFU CPI inflation was 6.0% in 2023 and will be 3.4% in 2024. If you look at the figures in tables 5.3 and 5.4 and keep the rate of inflation in mind you will see why it is so important that inflation is taken into account.

 

6% of the $28,489 million ($28.5 billion) spent on health in 2023 is $1,709.34 million ($1.7 billion). This is how much extra money the government would have to spend on health in 2024 just in order to maintain the existing level of spending at this level. The previous government did allow roughly this amount for 2024 in its final budget, while the current Government is increasing nominal spending on health by $411 million in 2025, much less than the $1.03 billion required just to maintain the existing level of funding in real terms.

 

The previous Labour Government cut spending on tertiary education from $4,804 millions ($4.8 billion) in 2022 to $4,663 million ($4.7 billion) in 2023. Allowing for inflation of 6% in 2023 this amounted to a very large cut in real terms. 

 

Unfortunately, things don’t get any better with this Government. Keep in mind that to keep up with 3.4% inflation in 2024, there would need to be an extra $297.78 million spent on tertiary education in 2025. The $217 million nominal increase forecast for 2025 thus amounts to yet another cut in real terms for the tertiary sector. Having started the process of doing the arithmetic, you can run these numbers on your calculator factoring in the CPI inflation figures from Table 1.1 Economic Forecasts on p.10 of the EFU. 

 

The upshot is that this Government is misleading the public when it says that it is increasing expenditure on health and education – this is only true if the figures are not adjusted for inflation. Pity New Zealand’s journalists and the ‘commentariat’ haven’t bothered factoring inflation into their comments on the budget.

 

 

China’s rise and the United States’ response: implications for the global order and New Zealand / Aotearoa. Part I: Using Uneven and Combined Development Theory To Explain China’s Rise.

This is the title of my article providing an analysis and explanation of China's rise published in Kōtuitui: New Zealand Journal of Social Sciences Online. It can be read at: https://www.tandfonline.com/doi/full/10.1080/1177083X.2024.2328532

Abstract: Part One of this article provides a novel condensed Marxist account of China’s rapid economic growth which underpins its rising geopolitical and military power. In the vast literature on China’s rise, pro-market reforms and/or state policy-making and interventionism are emphasised as causes, depending on whether a neoliberal or neomercantilist perspective is adopted. Although these accounts contain important elements of truth, Marxist economic theory and the theory of uneven and combined development emphasise the central role played by China’s comparatively high rates of exploitation and profitability in fuelling rapid economic growth. This Marxist perspective informs a critical analysis of China’s hybrid neoliberal policy regime, regionally decentralised system of government, huge trade surpluses and foreign currency reserves, inflows of foreign direct investment, state investment in infrastructure, rising socio-economic inequality, poor social provision especially of public health care, popular support for and potential sources of opposition to the CCP regime, and military modernisation.

Will this be the first single-term National Government in New Zealand's political history?

I have provided a short response to Budget 2024 for Spinoff. The key questions I address are: Will Budget 2024 lay the foundation for another three-term National Government? Will this be the first single-term National-led Government in New Zealand's political history?

Spinoff Roundtable Consideration of the Sixth National-led Government's Budget 2024 

The Climate Change Policies of the Green Party of Aotearoa/New Zealand: An Eco-Socialist Analysis and Critical Evaluation

This article of mine was awarded the prize for the best research paper published in New Zealand Sociology during 2023. It feels like an honour given the high quality of other articles published by the journal.  

ABSTRACT:

Accelerating climate change and the ineffectiveness of governmental policy responses has led many to hope that Green parties will promote more effective policy measures.

This article focuses on the Green Party of Aotearoa (GPA) which has maintained continuous parliamentary representation since 1996, receiving from 5.2 to 11% of the vote in national elections from 1999 to 2020. It has been a support partner in Labour-led governments following the 2017 and 2020 elections.

 

Providing an account of how the GPA’s climate change policies have developed and shifted since the foundation of the party in 1990, it seeks to answer the following question: What are the strengths and weaknesses of the intellectual outlook and climate change policies of the GPA with respect to likely effectiveness in reducing carbon emissions and combatting climate change? 

 

The critical analysis required to answer this question operates on two levels. With respect to critical policy analysis, the focus is on the scale, scope, sequencing and pace of change. At a more fundamental level, the article explores the extent to which the GPA’s intellectual outlook and policy programme constitute an adequate response to the problems generated by neoliberalism, capitalism, class, and the disproportionate influence of business over government. It concludes that although the GPA’s climate change policies are better than those of the other parliamentary parties, these policies are problematic at both levels.

https://nzsociology.nz/index.php/nzs/previousissues_2023