Social agencies don’t want debt focus to create core service cuts

By CathNews New Zealand

February 17th, 2026

Russell Street/ Wikimedia Commons

The Government’s focus on debt should not be at the expense of funding for core public services, says the New Zealand Council of Christian Social Services.

In a submission on the 2026 Budget Policy Statement, the NZCCSS acknowledged the need for governments to be fiscally responsible, but warned that the proposed limits to the Budget operating allowance are unlikely to cover the costs of existing services.

“The proposal to limit the Government’s operating allowance to $2.4 billion, including $1 billion for new spending, is unlikely to be adequate for the continuation of existing services after factoring in the rising costs of these services,” the submission stated.

The NZCCSS, which includes Catholic Social Services as a foundation member, also warned that inadequate funding of existing services “risks worsening the issues already occurring as a result of decades of deferred maintenance, such as those seen in New Zealand’s health system”.

“This deferral of spending pushes these costs onto future governments, while also having a long-term impact on the quality of the services provided,” the NZCCSS submission explained.

Among future impacts are longer wait times, reduced access and higher costs of services. These issues are likely to disproportionately impact lower-income households.

The NZCCSS recommended that the focus of Budget 2026 be shifted “away from reducing Government debt and instead ensure that funding is adequate to uphold the well-being of New Zealanders by at the very least covering existing services”.

The submission also noted that The Budget Policy Statement 2026 “makes no mention of poverty, despite this being a serious issue faced by a substantial portion of the New Zealand population”.

Using a Statistics NZ measure, in the year ending June 2024, 11.2 per cent of the New Zealand population lived in poverty, up from 10.2 per cent in 2021. The detrimental impacts of experiencing poverty span generations and reach far beyond the households directly impacted, the NZCCSS added.

“The focus on reducing not just child poverty, but whole-population poverty, should be forefront of any financial decisions and planning by the Government, with policies which aim to reduce poverty considered a priority.”

FULL STORY

NZCCSS submission on 2026 Budget Policy Statement (NZ Parliament)