There are many stories to tell about Budget 2025. One of these is that we have a small social investment fund, but not a social investment approach across this budget. Government investment instead is in eye watering numbers across law and order and defence.
Last week, I asked the Minister for Social Investment (and Finance), Nicola Willis, if the $190 million Social Investment Fund would be funded by cuts to our sector across the rest of this Budget. She assured me it was ‘new money’.
So, in front of me is a list of numbers and arrows in my scrawled handwriting. As soon as Budget 2025 dropped, I rushed to look behind the curtain of the headline figures, scrolling through the estimates of appropriations. Spoiler – the $47.5 million a year Social Investment Fund is less than the decrease in funding to our sector I counted across other portfolios.
The Budget announcements and documents are split by portfolio, each with their own Minister. By my reckoning at least 19 of the 28 Ministers would say they are delivering for communities. The tangata whenua, community and voluntary sector works outside of these arbitrary boundaries and is poorly understood and historically underinvested in by Government. Last year we took a big hit with a wave of cuts across many portfolios, and we need to reflect on this year’s Budget in that context.
Yesterday I looked at the estimate of appropriations documents for each portfolio, or bucket of money. The budget shifts in housing seem particularly complex.
In addition to the impacts of changes to Pay Equity affecting many women in our sector, key information in Budget 2025 for communities includes:
- Community development funding from Internal Affairs is down $10 million this year. This is the removal of the Safer Communities Fund ($6 million), the Preventing and Countering Violent Extremism Fund ($1.6 million) and the Public Apology for Abuse in Care Fund ($2 million), and $0.5 million less in the Community and Volunteering Capability Fund.
- Māori wardens, Pasifika Wardens and the Māori women’s Welfare League funding increased by a total of $14 million over 4 years for and $6.5 million more this year for Hauora Māori services, but also big cuts to the Māori Development Fund ($10 million less this year), reduced funding for Whānau Ora ($8 million less this year), Māori climate resilience ($5 million less this year) and Tangata whenua-led whānau and community wellbeing initiatives funded by Justice ($0.4 million less this year).
- Reduced funding across the environment portfolio, including $0.8 million less this year in the Community Environment Fund.
- A reprieve for Oranga Tamariki funded services after significant cuts last year. This comes after the damning investigation by the Auditor-General and an announcement that they are to design and implement a refined commissioning approach in partnership with the Social Investment Agency.
- Disability Support Services received a cost-pressure increase of $3.5 million more this year and increased funding for early intervention support services ($0.7 million more this year) and environmental support services ($12 million more this year).
- A temporary and insufficient band aid of $15 million this year for foodbank infrastructure and food security, and $2 million in time limited funding to continue KickStart breakfast and funding KidsCan to provide jackets to children.
- Youth development initiative funding is down by $3 million this year.
- Community support services (MSD fund) is $13 million less this year.
- A $15 million reduction over 4 years to the Tū Manawa Fund and a note that Sport NZ commit to maintaining existing provision of funds to 2027/8 through over cost savings.
- A record low and below inflation 0.5% ECE cost adjustment. Read the Early Childhood Council’s media release on this here.
- Other shifts in education that include increased learning supports across a range of initiatives and stopping funding for study support centres.
- Pasifika skills, training and employment funding is down $6 million this year.
- Reduced investment in Well Child Tamariki Ora (return of $60 million in contingency over 4 years).
- Aged care sees a funding increase to support people to move from acute hospital care to community care.
- Emergency Housing funding to cease in December 2025. A new Flexible Fund for housing, but the removal of separate specific funds for Māori housing.
- No support for community organisations to deliver the Kiwisaver employer contribution increases, which go up to 3.5% on 1 April 2026 and 4% on 1 April 2027.
- No support for community organisations to support beneficiaries sanctioned to unpaid community work, starting later this month.
This is a complex picture, and not an inspiring one. I wanted to see if I could see the total investment across our sector. The Budget summary notes:
Approximately $5 billion per annum is spent by the government on grants and funds … As part of Budget 2025…Ministers reviewed the grants and funds in scope in line with the following principles: to consolidate and simplify the number of grants and funds; and to reduce or close grants and funds that are duplicative, lower value for money, or achieve their purpose with less funding. Some funds were closed, some were consolidated, and others reduced.
From Budget 2025 Summary of Initiatives p.3.
The table below on the same page shows an annual reduction of $89.8 million from the closure and scaling down of grants and funds. No further information is given on which funds they are without diving deep into the estimation documents of each portfolio (or vote), and if include any funds that are open to the for-profit sector.
It is the tangata whenua, community and voluntary sector seeing increased demand from whānau who are struggling, and this Budget will likely see that increase. Over the coming weeks, we will reflect further on these impacts, alongside the Community Constellation groups representing and working in different parts of our sector.
Next Budget – at the very least we should expect transparency about the level of investment in communities.
