This is the first in a group of essays that will focus on the budget, to be announced this week. Together, we are going to look into colonial budget-tactics, demystify a few key terms, make a few predictions, talk about what they should be funding and how they can fund it, and consider what a real decolonised budget might look like.
Full transparency: I’m not an economist, but I know that colonialism is, at its heart, an economic project – so decolonising means we need a few economic tools in our kete, so I thought I’d just share a few things I look at when I check the budget. Today, some 101 terms, what they mean, a few of the common colonial budget tactics, and what we can do about it.
Every year around May, the government announces a Budget.
Every year, most of us hear the word “Budget” and immediately feel our eyes glaze over.
Economists and politicians hold up numbers and graphs talking about “appropriation” this and “fiscal update” and it all sounds very important but feels very far away.
Remember when the Regulatory Standards Act was a Bill and we all learnt how the government makes important things boring so you won’t look closer? Yeah, this is one of those things.
The Budget is one of the most powerful documents produced in this country. It decides who gets what. It decides who lives longer. It decides whose lives get easier, and whose get harder. It decides whether your local kaupapa Māori health clinic stays open, whether your neighbour’s benefit gets cut, whether a family in emergency housing get a roof over their head or whether they get told to try harder.
And it is written, deliberately, in language that most people can’t penetrate. Of course it is, because the budget is the most explicit exposure of the primary goal of this government: transferring wealth.

Now, it doesn’t have to be that way – the budget could be about redistributing wealth so that, for instance, children are properly fed in school and folks can afford to drive to work (and there is quite a bit of evidence to support that in the longrun, a distributive economy actually saves tax dollars). Despite what they say, the wealthy can afford to stay wealthy, whilst also contributing enough for others to have the necessities of life. As Max Harris points out, the way that our tax dollars are spent tell us a lot about who and what our government really cares about, and what’s very clear is that this government cares about making a few folks very wealthy, whilst still retaining as many votes as possible. Hence why they try to make it sound boring and complicated.
So let’s fix that. Here is your Budget 101 — what the key terms mean, what to look for, and how to read a colonial wealth transfer when it’s dressed up in budget language – because what we also learnt over the RSB (and Treaty Principles Bill) is that a bunch of yous can pick this stuff up just fine 😊.
Operating Allowance and Capital Allowance
First, the two big numbers
Every Budget has two main pools of money.
The operating allowance is the money for running things day to day. Paying nurses. Funding your local health provider. Keeping the school counsellor employed. Paying benefits. This is the money that actually touches people’s lives on the ground. When politicians say they’re being ‘fiscally responsible’ and keeping a ‘tight’ budget, what they are usually saying is: this number will be small.
The capital allowance is the money for building and buying things (eg roads, prisons, ferries, hospital buildings, military equipment etc). This number can be very large, and it is often used to make a budget look generous when the operating side is quietly being gutted.
So one of the very simple points to remember when you look at a budget: capital doesn’t pay salaries. You can build a brand new hospital building with capital money, but if the operating allowance doesn’t fund the nurses and health navigators inside it, the building is just an expensive shell. The next boot to drop from a colonising government faced with this dilemma is (drumroll!): PRIVATISATION, BABY. If they cannot afford the operating costs, the general pattern from the 80s to now has been to outsource it, and the public service or asset becomes a private corporation, prioritising profit. We have seen this happen with prisons, schools, and increasingly our health services are being corporatised too. So when we see a significant gap between the capital package and the operating allowance, the likely outcome of privatisation is another wealth transfer.
Nicola Willis has already previewed that the budget has a capital package of $5.7billion dollars – that’s nearly three times its operating allowance of $2.1billion. That’s in spite of budget 2025 saying that capital allowance would be capped at $3.5 billion for the next three budgets.

The capital allowance builds things. The operating allowance runs them. You can build a prison with capital. You need operating money to pay the health worker who might have kept someone out of it.
In everyday language, capital just means anything that makes you money without you having to work for it. A rental house. Shares in a company. A business you employ other people to run. Capital earns income for its owner while they sleep. It can even increase in value while they sleep. In most other OECD countries (out of 38 OECD countries, 36 have a capital gains tax), that increase in value is taxed – that’s called a capital gains tax. It’s a very effective form of wealth distribution, and in New Zealand, we don’t have it. What that means on the ground is that while Julie the nurse goes to work a ten hour shift and every cent is taxed, William the landlord makes a bunch of money in his sleep, and only a part of it is taxed.
So when you hear the government say “Oh we have to limit our operational budget because we don’t have enough money to fund more health services or feed more children or house more families” – that’s a damned lie. They don’t have to, they chose to have less money in the operational budget by NOT taxing the wealthy.
New Zealand does not have a capital gains tax. That means if your house increases in value by $300,000, you pay no tax on that gain. If a nurse earns $80,000 a year, she pays tens of thousands in income tax. The person who worked earned money. The person who owned an asset earned money. The nurse gets taxed. The landlord doesn’t.

Of course, wealthy asset owners are most effected by capital gains tax. The likes of, say real estate speculators such as the Gibbs family, or Rank Group owner and building industry magnate Graeme Hart, or FMI Building Innovations owner Warren Lewis. All of whom happen to be amongst the top donors to ACT, National and New Zealand First.
The colonial dimension of this is direct: the colonisation of New Zealand has always been about economic extraction. When land was taken from hapū Māori, the primary capital asset of Māori, and the basis of their economic wellbeing was transferred — overwhelmingly — into Pākehā hands. Three or four generations later, that advantage compounds. The wealth gap between Māori and Pākehā households is not about effort or talent. It is about who was allowed to accumulate capital across generations, off the back of stolen goods, without even having to share the increase in value (let alone returning what was stolen).
What difference would a capital gains tax make? Well, if we take the average capital gains tax rate of 19% that would provide an extra $5.1billion that could go into the operating allowance budget. That would be a complete game changer, and that’s with a modest/average capital gains tax. But instead, public services have to remain strapped, children have to remain underfed, and jobs have to be cut, so that the wealthy can remain even wealthier.

Income, Inflation and CPI
Look at benefit rates and minimum wage rates. But don’t just look at whether they went up — look at whether they went up enough. A 2% increase sounds like something, but if inflation is running at 3.1% (as it was in March 2026), that 1.1% winds up being paid out of the pockets of beneficiaries. Sometimes inflation is discussed using the term “Capital Price Index” (CPI) – which is just a fancy way of saying “how much the price of everyday goods (food, petrol, rent, electricity etc) has gone up. So 3.1% means the price of everyday goods is now 3.1% more than it was at this time, last year. It’s important to remember that for low-income areas, real inflation is often higher and more impactful than the CPI (because they have less options on things to “cut back on” when prices go up, because it takes up a bigger proportion of their wage, and because in general, being poor is expensive, you cannot afford to buy high-quality items that last long). So if we are to take a class-conscious, antiracist approach income and benefit raises should be even higher for communities worst impacted by cost-of-living crises. Inflation for low-income household is typically 0.5–1.5% higher than CPI. So if the CPI is 3.1%, benefit and minimum wage levels should increase by a minimum of 3.6-5.1%.
Service Budgets
When they wap on about “service budgets”, what they mean is the accumulated amount an agency or programme receives to operate year to year, which was established in previous budgets and continues automatically unless changed. So like, parenting programmes for Mamas have a particular budgeted amount within health. But when looking at this, you have to take into account that our population grows by approximately 2% per year, which means any service budget that doesn’t increase by at least 2% is being diluted across more people. Specifically for the health sector, there are added cost pressures due to technology and wage costs, so you would want to add at least another 2-3% onto the CPI, otherwise it’s effectively a cut, and even meeting that rate would only keep things where they are, not improve them.
So those are some of the bare-bones approaches to looking at a budget. Just know that it’s the colonial project, presented IN the colonial language of dollars and cents. It’s the fruit of the seeds planted by right-wing election donors.
One last point before I sign off: a budget is not just economics. It is an expression of who holds power, and what they think that power is for.
The budget is where that injustice shows up in dollars. Every year. Until the constitutional settings change. Extracting from our lands, from our waters and from our bodies has been the colonial purpose since day one of colonial project. All that has changed, is that now it is at its most explicit – whilst still trying to cloak its continued theft.
So good on you for getting into the budget and demystifying it. But there’s more we can do:
1. Let them know you see them and call them on their bullsh*t. Austerity is a lie, I’d all it wealth transfer in drag, but it’s nowhere near as fabulous as drag.
2. Vote – and vote for constitutional change. Every extractive budget this government has produced has been extractive (as have many before them), and this is made possible because of our constitutional settings. The Crown controls the size of the purse AND the purse strings, and ultimately this will not change until we change how we do government.
3. Don’t wait for constitutional change, build economic safety nets in your community. That starts with relationships. Introduce yourself to new folks on the street. Check on your neighbours, consider how you might support each other either by trading skills and services, or working bees, or sharing excess from your own maara, or dropping off some kai to an elder on the way home.
4. If you are in a space of relative privilege, and have less economic/labour burden exhausting your energy and time, use that to speak out for those that are hit hardest by these types of budgets.











![THE INDIANS IN FIJI
(To the Editor.)
Sir, — Your correspondent "From the East" has missed the main point mentioned by Mr. Fraser and criticised by me, and that was about the Indians' treatment in Fiji. It is clear from Mr. Fraser's letter that he is of opinion that the Indian is well treated there, while I still hold that he is a poor ill-used creature. Let us go back to the strike period of 1919. Whilst articles had risen 200 and 300 per cent in price, my countrymen had been receiving only 2/ as a daily wage, which was entirely insufficient to keep body and soul together. And this at a time when all growers of cane were doing unusually well. Three years after the war had begun, while prices had been rising in every direction, the indentured labourer himself was obtaining exactly the same wage as before the war. The average savings sent to India by indentured labourers, according to the Rev. Andrews, did not amount to more than 6/ per head per annum. As Dr. Manilal said in writing of the unfortunate position of these people "Hundreds of Indians are yearning or panting to see a ship to go back to India and leave this Hell on earth created by the greed and avarice of the English planters and their Fiji Government." — I am, etc.,
JELAL KALYANJI NATALI.
[This correspondence is closed. — Ed.]](https://i0.wp.com/tinangata.com/wp-content/uploads/2026/04/image-14.png?resize=300%2C602&ssl=1)








