Source: Radio New Zealand
In the year to 30 June, 2025, total government spending was $183.5 billion. RNZ
You pay tax, the government spends it.
But what does it spend it on?
If you have ever wondered exactly where the tax money goes, here is a breakdown.
In the year to 30 June, 2025, total government spending was $183.5 billion.
Of that, social security and welfare took the largest amount, at $57.6b. This included NZ Super, which was just over $23b.
This total had increased from $53.99b the year before.
Next was health, with $29.8b.
Third was education, at $22.3b, up from $21.18b the year before.
Fourth was economic and industrial services, spending by the government to support and regulate business activities, at $16.2b.
Then was transport at communications, $15.83b.
It was followed by law and order, $7.3b, heritage, culture and recreation at $3.38b, housing and community development at $4.5b, defence at $3.23b, environmental protection at $2.3b and primary services $2.53b.
Core government services – made up of Crown departments, Offices of Parliament, the New Zealand Superannuation Fund and the Reserve Bank – took up $7.77b.
Finance costs were $10.39b – that was the interest bill for government borrowing.
The Government Superannuation Fund Authority’s expenses were $83 million.
Simplicity chief economist Shamubeel Eaqub said New Zealand offered a lot of transparency around government spending.
Simplicity chief economist Shamubeel Eaqub. Supplied
But he said many people thought about tax the wrong way.
“The question is actually the other way around. What public services and what quality of public services do you want, and how do you pay for it? And then you can decide how much tax to pay, because that’s the envelope, and who pays that tax.
“Because we tend to start a conversation on the wrong end, ‘I must never pay tax, but I want all the best services’, we end up in this standoff.”
He said it was a harder conversation to have because it was inconvenient.
“If you want nice things, you have to pay for it. You can’t just rely on other people to do it for you … And I think that sense of responsibility and having to do it yourself is quite problematic for people, because for a long time, I think post the Second World War, when the welfare state was built, the broad idea was trust central government, they’ll take care of all these things so you don’t have to.
“But that has broken down, and this is going to get worse, because when we made these promises, we used to have loads of young people, we could tax our workers, and we had a surplus, we had an abundance of income to buy things. But we don’t anymore.
“We kind of ran out of the runway about a decade ago, and it’s only going to get harder from here, because the demographic maths gets harder.
“Too many old people, not enough working age people. Nothing wrong with old people. And I think people think I vilify old people. It’s not that. You can’t just pay yourself lots of money without having a source of revenue.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
