Budget 2025 predicts slower growth and higher unemployment, with youth unemployment at concerning levels.
Tax deductions for asset purchases may boost investment but add only 0.05% to GDP annually.
Cuts to KiwiSaver contributions, tertiary funding and housing support are expected to impact young people.
Growth Budget? Pull the other one. The only thing that’ll be growing after this Budget is the queue at the international departures gate.
The figures released with the Budget on Thursday show growth is now expected to be slower in 2026 than was forecast in December, unemployment is projected tostay higher for longer, and wage growth will be slower.
Where’s the plan to deal with this? Nowhere to be seen.
Don‘t get me wrong, as a business leader, the ability to deduct a bit of extra tax on new asset purchases is welcome and it might accelerate some investments. But it’s not going to move the needle. Even Treasury predicts it will only add 1% of GDP over the next 20 years. That’s 0.05% of GDP a year. Literally a rounding error for Statistics New Zealand.
That’s it? An extra 0.05% of GDP, a Waipawa’s worth of economic output a year. That’s the big plan we’ve been told to expect?
Mark me down as unimpressed.
Meanwhile, unemployment is taking a huge toll on our young people: 10.9% unemployment among 20-24-year-olds, 23.9% for 15-19-year-olds in the latest figures. Not because they’re lazy and “on the PlayStation” as Nicola Willis puts it. But because there aren‘t enough jobs.
Youth unemployment didn‘t spike by 50% in the past year and a half because young people suddenly got lazy, eh? It’s because the economy has lost over 30,000 jobs in that time, and the youngsters (along with Māori and Pasifika) always get the short end of the stick when there’s not enough jobs to go around.
Hassling young people who are stuck on the dole because there’s no jobs won‘t suddenly get them into work. Forcing 19-year-olds who have lost their job to ask their parents to support them and cutting their dole off regardless of whether their parents do or not is just mean.
And if they do get a job? Well, better hope it’s not in a female-dominated industry, eh? Because pay equity is out the window. $13b of payouts to underpaid workers, $300 a week – gone.
Oh, and your KiwiSaver contribution is going up, and Treasury expects the added employer contribution will ultimately come out of workers’ pay, too. But the Government contribution, that’s getting cut in half, which will mean tens of thousands less in your nest-egg when you retire.
Maybe rangatahi should get some more education, so they can get a higher-paying job? Ah, but tertiary tuition funding is being cut in the Budget, and fees are going up.
What about somewhere to live? Good luck. Money is being pulled out of house building and First Home loan assistance, and going into paying landlords in Auckland to convert their rentals over to social housing.
I don‘t buy this dumping on the younger generation that seems to be so popular with this Government and certain commentators. They’re not lazy or spoiled. They’re no worse than we were and, in many ways, they’re better – smart, inquisitive, and healthily sceptical.
The latest Budget predicts slower growth and rising youth unemployment. Photo / Marty Melville
But, I tell you what, they’ve got it harder than most of us had it. The Kiwi Dream that we used to all have a decent shot at achieving – a home of your own, a decent job paying enough for good quality of life – must seem light years away to today’s 20-year-olds. Not a goal, just a joke.
If you’re a young person, you’ve got to be asking yourself – ‘what am I staying here for?’
Not for the crumbling infrastructure and the underfunded health system.
Not for a Government that cares so little about the climate you’ll have to live in that it’s planning to invest in natural gas drilling.
No wonder our young people are leaving this country in record numbers. After this Budget, the planes to Aussie are going to be chocka with our country’s future, seeking a better chance across the sea.
I’m all for international travel and OEs. I mean, I’m on my middle-age OE right now. But if my kids and my young whānau go overseas, I want them to go because they have built a great foundation in Aotearoa and, now, they want to see the rest of the world. And I want them to want to come back home after their travels.
I don‘t want them to leave because the Government has as good as packed their bags for them and told them there’s no hope for them here if they stay.
