Politicians in New Zealand are wedded to the idea of the activist state, but despite huge spending increases life is not much better for most people. Over the last decade, government has provided more social services but at such great cost that we have to question whether the marginal improvements in social outcomes justify the cost, whether there are other ways to bring about the same results, and whether such spending is fiscally responsible in the long term.
Government spending has almost doubled in nominal terms to $70.5 billion from 2000–01 to 2010–11. Adjusting for inflation, this is an increase of 57% in real terms. Most of this money was spent on social welfare and introducing costly and ineffective new policies.
Health spending increased from $6.6 billion to $13.5 billion.
Education spending increased from $6.1 billion to $11.7 billion.
Social security and welfare spending increased from $13.2 billion to $21.2 billion.