National announces reversal of School Building Project cuts
National announces reversal of School Building Project cuts
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9:42 am, September 23rd, 2025 - 7 comments
Categories: Christopher Luxon, Economy, education, erica stanford, infrastructure, national, same old national, uncategorized -
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Clearly the news of the recent GDP reduction has spooked National and it is now desperately looking for ways to stimulate the economy, and in particular the building sector.
It is not only GDP that is struggling.
This recent RNZ article notes that since June 2023:
- The unemployment rate has increased from 3.7% to 5.2%,
- Employment growth has been slashed from 4.3% to 0.9%,
- Although inflation has cooled annual food inflation is still 5%,
- Retail volumes are lower,
- GDP is 1.2% smaller,
- Manufacturing activity is 5.8% smaller,
- Construction activity is 18% smaller with year end growth dropping from 6.6% to -12%,
- The OCR has dropped but only because the Reserve Bank is grappling with the crashing economy,
- The Government deficit is now about $10 billion compared to $7.2 billion previously,
- Comodity prices have increased but the Government has no responsiblity for this,
- Productivity has declined.
And they call National economic geniuses?
Luxon is clearly panicking. Which is why he recently engaged in some good old Keynesian fiscal stimulus although with a couple of twists.
Yesterday Luxon and Education Minister Erica Stanford announced that the government will invest $413 million to improve school infrastructure. Only $58 million is new funding however with the rest either taken out of the Education Ministry’s baseline ($80 million) or being an accelerated spend of existing budgets ($175 million).
No wonder senior school teachers have been offered salary increases below the rate of inflation and required to work greater hours. And just as well for the Government that Secondary School teachers can no longer seek pay parity.
Most of the fund will be spent on rural schools despite there being a clear need in Auckland.
Shortly after the election National engaged in the usual shock and awe campaign, announced an inquiry into the cost of school construction projects and put a number of projects on hold. Ever since then they have sough to dumb down the quality of school buildings even if this meant that operating costs would be higher in the long term.
The consequences were clear. Schools with urgent needs and on the verge of starting building projects suddenly found these were on hold. And construction companies suffered from the sudden blocking of the pipeline of work in this and other areas.
This is clearly a backdown although National will try and present it as something else. And the sleigh of hand with the funding is going to create problems in other areas.
How about the hospitals build programs they also cancelled to replace with that pathetic maintenance allocation like a finger in the dyke.
With the addition of quality imported materials everyone understands how to use and free reign to 'approved' builders, everything is sorted now.
Thanks Super Penk my what a busy dude.
Any journo have the guts to ask luxon/willis/bishop/brown etc when they expect a sector they wilfully collapsed to deliver again.
Too little too late. A plaster on a gaping wound.
Oh the myth that right-wingers are better managers of the economy. "Well, those National and Act people seem to have plenty of money so they must know what they're doing, I'm voting for them."
This is very small compared to what NZTA are about to fire out the door to designers and then constructors. There's several billion of RONS and RORS (Road of Regional Significance) that BECA, WSP, Jacobs, GHD, AECOM et al are going to have to bundle up with the main constructors (Vinci/HEB, FH, Downer, Webuild, Accionia etc).
There's no point telling this lot, but they will finally figure out that the state really can pump-prime an economy – after nearly choking it to death.
Once this lot is finished (2026?), many sectors of the economy and society will be moribund or reduced to skeletons of what they once were. Only a large inflow of foreign capital will be able to stop/reverse some of the downward slide and this will come at a premium because of the relatively higher sovereign risk, not in the least because of defunding and/or chronic underfunding & under-investment by government (incl. local) as a result of the current cost-cutting austerity crusade that too many have been captured by: the Right because of its ideological zeal to reduce taxes for the private sector & businesses (incl. foreign-owned ones) and diminish State influence & power, the Centre because the middle is feeling a squeeze and refuses to contemplate any distributive moves and just wants to protect their (property) assets to maintain its consumer-hedonistic lifestyle, and the Left because of the ongoing cost-of-living crisis for the lower & under-classes. Alternatively, future governments will have to borrow more, which is likely to come with penalties (i.e., down-grades) by international credit agencies (not to mention the political costs).
It reminds me of children playing with matches despite the warnings looking surprised when it burns down.
They were told what austerity would do but their backers must be rewarded so if that means fair pay gets the heave then so be it.
Trust ACT to figure out how to deliver that extra shafting on pay equity, they excel at that.
Typo alert. It's a little early for Xmas with talk of a sleigh in the last sentence.