NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

Despite decades of cost-cutting, Governments spend more than ever. How can we make sense of this? – The Conversation

By Ian Lovering
Other·
22 Jun, 2025 06:00 PM6 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Finance Minister Nicola Willis with (from left) Winston Peters, Chris Bishop, David Seymour and Prime Minister Christopher Luxon, on their way to the House for the reading of Budget 2025 at Parliament in Wellington. Photo / Mark Mitchell
Finance Minister Nicola Willis with (from left) Winston Peters, Chris Bishop, David Seymour and Prime Minister Christopher Luxon, on their way to the House for the reading of Budget 2025 at Parliament in Wellington. Photo / Mark Mitchell

Finance Minister Nicola Willis with (from left) Winston Peters, Chris Bishop, David Seymour and Prime Minister Christopher Luxon, on their way to the House for the reading of Budget 2025 at Parliament in Wellington. Photo / Mark Mitchell

Opinion by Ian Lovering
Ian Lovering is a lecturer in International Relations at Te Herenga Waka — Victoria University of Wellington.

THE FACTS

  • Recent controversies over the Ka Ora, Ka Ako school lunch programme highlight issues with food quality and delivery.
  • David Seymour replaced the school-based scheme with a centralised programme, claiming $130 million in taxpayer savings.
  • Austerity policies raise questions about who controls public spending decisions, emphasising corporate and bureaucratic control.

Recent controversies over New Zealand’s Ka Ora, Ka Ako school lunch programme have revolved around the apparent shortcomings of the food and its delivery. Stories of inedible meals, scalding packaging and general waste have dominated headlines.

But the story is also a window into the wider debate about the politics of “fiscal responsibility” and austerity politics.

As part of the mission to “cut waste” in government spending, Act leader and Associate Education Minister David Seymour replaced the school-based scheme with a centralised programme run by a catering corporation. The result was said to have delivered “saving for taxpayers” of $130 million – in line with the Government’s overall drive for efficiency and cost-cutting.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

While Finance Minister Nicola Willis dislikes the term “austerity”, her May Budget cut the Government’s operating allowance in half, to $1.3 billion. This came on top of Budget cuts last year of around $4b.

Similar policy doctrines have been subscribed to by Governments of all political persuasions for decades. As economic growth (and the tax revenue it brings) has been harder for OECD countries to achieve over the past 50 years, Governments have looked to make savings.

What is strange, though, is that despite decades of austerity policies reducing welfare and outsourcing public services to the most competitive corporate bidder, state spending has kept increasing.

New Zealand’s public expense as a percentage of GDP increased from 25.9% in 1972 to 35.9% in 2022. And this wasn’t unusual. The OECD as a whole saw an increase from 18.9% in 1972 to 29.9% in 2022.

Advertisement
Advertise with NZME.

How can we make sense of so-called austerity when, despite decades of cost-cutting, Governments spend more than ever?

Austerity and managerialism

In a recent paper, I argued that the politics of austerity is not only about how much Governments spend. It is also about who gets to decide how public money is used.

Austerity sounds like it is about spending less, finding efficiencies or living within your means. But ever-rising Budgets mean it is about more than that.

In particular, austerity is shaped by a centralising system that locks in corporate and bureaucratic control over public expenditure, while locking out people and communities affected by spending decisions. In other words, austerity is about democracy as much as economics.

We typically turn to the ideology of neoliberalism – “Rogernomics” being the New Zealand variant – to explain the history of this. The familiar story is of a revolutionary clique taking over a bloated post-war state, reorienting it towards the global market and making it run more like a business.

Depending on your political persuasion, the contradiction of austerity’s growing cost reflects either the short-sightedness of market utopianism or the stubbornness of the public sector to reform.

But while the 1980s neoliberal revolution was important, the roots of austerity’s managerial dimension go back further. And it was shaped less by a concern that spending was too high and more by a desire to centralise control over a growing Budget.

Many of the managerial techniques that have arrived in the public sector over the austerity years – such as results-based pay, corporate contracting, performance management or evaluation culture – have their origins in a budgetary revolution that took place in the 1960s at the US Department of Defence.

In the early 1960s, Defence Secretary Robert McNamara was frustrated with being nominally in charge of budgeting but having to mediate between the seemingly arbitrary demands of military leaders for more tanks, submarines or missiles.

In response, he called on the Rand Corporation, a US think tank and consultancy, to remake the Defence Department’s budgetary process to give the secretary greater capacity to plan.

Advertisement
Advertise with NZME.

The outcome was called the Planning Programming Budgeting System. Its goal was to create a “rational” Budget where policy objectives were clearly specified in quantified terms, the possible means to achieve them were fully costed, and performance indicators measuring progress were able to be reviewed.

This approach might have made sense for strategic military purposes. But what happens when you apply the same logic to planning public spending in healthcare, education, housing – or school lunches? The past 50 years have largely been a process of finding out.

What began as a set of techniques to help McNamara get control of military spending gradually diffused into social policy. These ideas travelled from the US and came to be known as the “New Public Management” framework that transformed state sectors all over the world.

What are Budgets for?

Dramatic moments of spending cuts – such as the 1991 “Mother of all Budgets” in New Zealand or Elon Musk’s recent Doge crusade in the US – stand out as major exercises in austerity. And fiscal responsibility is a firmly held conviction within mainstream political thinking.

Nevertheless, government spending has become a major component of OECD economies. If we are to make sense of austerity in this world of permanent mass expenditure, we need a broader idea of what public spending is about.

Budgets are classically thought to do three things. For economists, they are a tool of macroeconomic stabilisation: if growth goes down, “automatic stabilisers” inject public money into the economy to pick it back up.

Advertisement
Advertise with NZME.

For social reformers, the Budget is a means of progressively redistributing resources through tax and welfare systems. For accountants, the Budget is a means of cost accountability: it holds a record of public spending and signals a society’s future commitments.

But budgeting as described here also fulfils a fourth function – managerial planning. Decades of reform have made a significant portion of the state Budget a managerial instrument for the pursuit of policy objectives.

From this perspective, underlying common austerity rhetoric about eliminating waste, or achieving value for money, is a deeper political struggle over who decides how that public money is used.

To return to New Zealand’s school lunch programme, any savings achieved should not distract from the more significant democratic question of who should plan school lunches – and public spending more broadly.

Should it be the chief executives of corporatised public organisations and outsourced conglomerates managing to KPIs on nutritional values and price per meal, serving the directives of Government ministers? Or should it be those cooking, serving and eating the lunches?

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

Save

    Share this article

Latest from New Zealand

New Zealand

Two dead after crashes in Palmerston North and Dunedin

New Zealand

NZ's $32m satellite mission unresponsive, Space Minister silent

Herald NOW

Lorna Riley talks micro cruising, European airports and Fiji reefs with Ryan

Watch

Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Recommended for you

Vaccine decline threatens 95% target as hesitancy grows
Bay of Plenty Times

Vaccine decline threatens 95% target as hesitancy grows

West Indies bowled out for 27 - just beat NZ's record low
Sport

West Indies bowled out for 27 - just beat NZ's record low

Pentagon to begin using Elon Musk's controversial Grok chatbot
World

Pentagon to begin using Elon Musk's controversial Grok chatbot

Four confirmed dead in small plane crash at Southend airport
World

Four confirmed dead in small plane crash at Southend airport

NZ's $32m satellite mission unresponsive, Space Minister silent
New Zealand

NZ's $32m satellite mission unresponsive, Space Minister silent

Median house price falls in Auckland, increases in regions
Business

Median house price falls in Auckland, increases in regions



Latest from New Zealand

Two dead after crashes in Palmerston North and Dunedin
New Zealand

Two dead after crashes in Palmerston North and Dunedin

Police were called to the Palmerston North crash at 7.30pm last night.

14 Jul 09:44 PM
NZ's $32m satellite mission unresponsive, Space Minister silent
New Zealand

NZ's $32m satellite mission unresponsive, Space Minister silent

14 Jul 09:14 PM
Lorna Riley talks micro cruising, European airports and Fiji reefs with Ryan
Herald NOW

Lorna Riley talks micro cruising, European airports and Fiji reefs with Ryan

Watch
14 Jul 08:52 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP
search by queryly Advanced Search