Building back better?

Building back better?

Nobody anticipated the scale of extra spending in this year’s budget, but CTU economist Craig Renney asks where is the vision for building back better?

Budget 2021 brought the welcome surprise of an additional $3.3 billion of welfare spending to lift benefit rates by $32-55 per week.

The extension of the training incentive allowance, and an additional $914m to DHBs is also welcome.

Other sleeper hits included a $3b commitment to recycle future Emission Trading Scheme revenue, and the extension of Warmer Kiwi Homes to provide insulation for 47,700 more houses.

Home support receives $88.1m in new funding for paid travel and break time over 4 years, making a big difference for a low paid workforce.


But with the economy faring better than expected during the Covid crisis, there was an opportunity to do more in this budget.

Craig Renney cropped2 resized

CTU Economist Craig Renney

Contrary to last year’s dire predictions, the economy is in the 'Goldilocks Zone’. GDP is due to peak at 4.4% in 2023, unemployment due to fall to 4.2%, and inflation and interest rates are low.

Covid didn’t deliver the giant deficit or unemployment that was expected, which meant the Crown borrowed much less than anticipated, and had plenty of headroom to take on more debt without breaching the debt figure it was elected on last year.

With net core Crown debt below 40% of GDP on some measures, stratospherically lower than Australia, the US and other countries we compare ourselves to, our Finance Minister has chosen to be very prudent with his expenditure.


The budget failed to provide the basics in a few key areas. In health we needed $1.4b just to cover basic cost pressures. We think its short by hundreds of millions, almost guaranteeing DHBs will run deficits again next year, as waiting lists grow and wage increases are needed for health care workers.

In Early Childhood Education the Government announced $170m toward pay parity, and yet funding for services did not increase enough to meet the cost of inflation.

The Budget also showed the Government is set to miss its targets on child poverty. Welfare payment increases are predicted to lift another 33,000 children out of poverty. But on one measure, 190,000 children will still be in poverty by 2023.

Vote Justice received just a 1% increase for all items not related to legal aid. Given that its Hōkai Rangi Corrections strategy is supposed to take a wellbeing approach, is the Government willing to fund this or will it just continue with old-style custodial services?


Freed from the shackles of coalition, the Government had the opportunity to make important symbolic change with this budget.

And there was so much to like, welfare spending is welcome, the decision not to just pay down debt is fantastic.

But Budget 2021 didn’t articulate a clear plan for the economy, or a vision of the kind of country we want to be 10 years from now.

There is no shortage of things we could usefully be spending money on. In public transport, housing, infrastructure, we could be spending more to deliver on our aspirations.

We need a plan on how we can deliver public services and the sort of economy we want to see.

The CTU would really like to have that conversation with the Government.


Also in this issue:

"Thanks for making a difference"

We’ve been making sure your right to negotiate for pay increases is respected in the corridors of power and at the bargaining table.

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President's message

Welcome to this edition of Te Mahinga Ora, I hope you enjoy reading about the mahi your union has undertaken over the past three months.

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News in brief

A first for PSA Pasefika, a Budget 2021 update, news on our case against Inland Revenue, and more...

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Long road to fair pay and conditions for support workers

Our home support workers have some of the worst employment conditions in New Zealand, and the PSA is determined to help change that with a Fair Pay Agreement (FPA).

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Fair Pay Agreements – what are they all about?

All too often, employers compete for contracts by holding down pay and undermining conditions in an endless race to the bottom.

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One Public Service

Common terms and conditions for all

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Unsung heroes reach well-deserved pay settlement

Our members at ESR are some of the unsung heroes of New Zealand’s Covid response.

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A massive contribution

Our PSA Kaumātua is stepping down from his duties after a lifetime of mahi for our union and Māori workers.

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Fighting for a better life

Janice Panoho has been fighting for a better life for Māori since she joined the 1975 Land March and is still pursuing that goal in her new leadership role with the PSA.

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Protect yourself, protect your community

Many of our members in health and community services are among those to be receiving their Covid-19 vaccine as the rollout continues across Aotearoa.

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“We always have tamariki at heart”

Supporting tamariki and whānau to thrive is something we all want to strive for - but some of Aotearoa’s most needed workers are undervalued for this important mahi.

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Wearing purple for library workers

Library workers and their supporters wore purple on May 13, to mark the second anniversary of our library assistants pay equity claim.

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Social insurance - an idea worth discussing

A new scheme to cover a chunk of the wages of people who lose their jobs is an idea worth considering argues Sam Gribben of E tū.

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Ināia tonu nei: The time for climate action is now

The PSA welcomes the Climate Change Commission’s advice that workers and unions help design a strategy that ensures the costs of transitioning to a low-emissions Aotearoa are shared fairly.

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A giant whose shoulders we stand on

Elizabeth Orr was a leader in pay equity and equal pay in Aotearoa for more than 50 years.

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Leading the way

When asked what attracted her to the study of marine macro-algae, NIWA delegate Wendy Nelson joked about getting paid to go to the beach.

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Kia Kaha Te Reo Hangarau!

Technology is an essential tool in modern workplaces. Here are some kupu and phrases that could come in handy at work or at home

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Signing for solidarity

As we marked NZ Sign Language Week, Janet Stokes, one of our first Deaf delegates, told Te Mahinga Ora about her mahi for the union and Deaf community.

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Health and safety awards

Celebrating the exceptional work of our health and safety representatives across the public sector.

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"A perfect storm"

As the effects of Covid and rising authoritarianism ravage much of our region, UnionAID’s Michael Naylor asks us to dig deep for their appeal.

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Around & About

In this issue our photo page features the Nurses' Strike, Pink Shirt Day and much more

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