Green Party accuses the government of secret cuts

9 minutes ago

Greens co-leader Chloe Swarbrick says the government has failed to separately fund higher KiwiSaver costs for a second year in a row.

Photo: RNZ / Mark Papalii

Prime Minister Christopher Luxon will be speaking to Morning Report about 7.50am. You can listen in the player above, om your RNZ app or on your local RNZ frequency.

The Green Party is turning John Key's "show me the money" attack line against National, accusing the government of "secret cuts" including to the health sector.

Co-leader Chloe Swarbrick says the government has failed to separately fund higher KiwiSaver costs for a second year in a row, which means the savings are being found elsewhere - and she wants to know where.

She last year pointed to a $633m to $714m bill the government would have to pay after raising default KiwiSaver contributions from 3 percent to 3.5 percent of a worker's salary - with a further increase to 4 percent set down for 1 April 2028.

This increased minimum contribution applies both to employees who have not opted out of the KiwiSaver scheme, and to their employers.

That includes the government, as a major employer of staff across the public sector including policy analysts, teachers, nurses, doctors, police, corrections staff and much more.

Finance Minister Nicola Willis at the time dismissed what Swarbrick was calling a "fiscal hole", saying this would be managed by individual agencies - with any additional funding required coming out of the 2026 Budget.

Swarbrick told RNZ the same thing had happened in this year's Budget, with one major difference - $154.8 million had been set aside over four years in education to fund the increase for teachers and teacher aides.

"It kind of actually acknowledged that we were completely correct," Swarbrick said.

"That is for a workforce with a headcount of around 90,000. We know that there is a far larger remaining in-scope workforce in the public service of around 280,000 more public servants, people who are directly employed by the government."

The Greens used the headcount of 375,000 central government employees, then excluded state-owned enterprises and the teaching workforce which would receive the specified funding, to arrive at an estimate of about $486m for the rest of the sector.

"We are looking at around $480 million, estimated - again noting that we don't have all of the information and data that the government does ... a fiscal hole of around half a billion dollars in the Budget," Swarbrick said.

Finance Minister Nicola Willis.

Photo: RNZ / Louis Dunham

However, Willis' office provided a statement saying there was "no hole in the government's accounts".

"The Budget funds increased employer KiwiSaver contribution costs for frontline education workers. As was stated when contributions were increased in last year's Budget, the cost of the increased employer contributions for other public sector employees will be met from within agency baselines.

"Agencies have planned and budgeted for this in their performance plans."

Her office also confirmed the government had not needed to fund the previous year's increased cost, saying "no funding was precommitted against this year's Budget for government agencies' KiwiSaver related costs".

Swarbrick acknowledged the costs could have been built into the last two Budgets, but said the money had to come from somewhere - and if it was coming from agency baselines that meant services being cut.

"The government made the decision to increase the KiwiSaver employer contribution rate in Budget 2025 - which, again, was the right thing to do - but it was not right to leave that unfunded. No other business gets to no business out there in this country gets to," Swarbrick said.

"That means that if it is not funded in the healthcare system, there are cuts that are happening right now to the healthcare system as a result of this KiwiSaver decision."

She pointed to Willis' previous commitments not to cut frontline health services.

"Sunlight is the best disinfectant, and what the minister can outline very clearly for New Zealanders is how much the government knows it is going to cost ... and it has to show New Zealanders how it is meeting those costs.

"If it's there, she can prove it, but if it is not she should stop pretending that the books are balancing on anything other than more secret cuts to come.

"Nicola Willis needs to show us the money."

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