Cost of Government's canned, delayed projects over $37m

The cost of the Government's first tranche of canned projects totals over $37 million as Labour says it's focusing on ways to deal with the cost of living crisis.

Four projects were cancelled or delayed on Wednesday, with Prime Minister Chris Hipkins saying it would be the "first set" of more reprioritisation decisions.

Hipkins confirmed the TVNZ/RNZ merger is now off the table, as is the proposed biofuels mandate.

The social insurance scheme, championed by Grant Robertson, has been paused. And changes to hate speech legislation, specifically, the amendment to protect religious groups from hatred-inciting speech, would instead be referred to the Law Commission.

The four projects have so far cost the taxpayer $37,876,722.

Cost breakdown

The most expensive to date has been the social insurance scheme, which over the past two years has cost $16.7m.

Announced in 2021, the proposal looked to provide about 80% cover for a limited time after a person loses their job and is linked to training opportunities.

Finance Minister Robertson said the scheme “would cushion the impact of a job loss”.

The media merger cost to December was $16.1 million but that’s not the final tally, according to the Broadcasting Minister's office.

“January and February costs are yet to be totalled and we expect some more final costs to accrue in closing down the programme,” a spokesperson for Willie Jackson said.

Work on the biofuels mandate has to date cost $4.28 million.

The mandate would have increased the sustainability of New Zealand's fuel, but also its price, something Hipkins said he's not prepared to do in the current climate.

A spokesperson for the Minister of Energy and Resources, Megan Woods, said the cost of setting up the Environmental Protection Authority as the Regulator was $1.4 million. Policy advisers and managers for MBIE cost $2.6 million and consultancy fees cost $280,000.

The spokesperson said the cost impact of the mandate could have increased the cost of fuel by about 2.5 cents per litre in 2024, and 3.3 cents per litre in 2025 (averaged across petrol and diesel).

"Against the estimated costs, the policy would have cost the New Zealand economy $150 - $250 million per annum."

Changes to hate speech law cost the least. The final project expenses for the 2021 public engagement on the incitement of hatred work totalled $796,722.11, minus GST.

Minister of Justice, Kiri Allan told 1News, “this included fees for translation of consultation materials, producing accessible versions of the materials, a country-wide series of hui to engage with communities on the proposals, and submissions analysis. The figure includes project management staffing costs but excludes staffing costs for Ministry of Justice officials.

“The cost of the engagement was shared with the Department of Internal Affairs and the Ministry of Social Development, who were consulting on related proposals at the same meetings (the strengthening social cohesion work, and changes to the definition of ‘objectionable’ in the Films, Videos and Publications Classifications Act 1993). The figure given excludes the costs paid by other agencies.

“Ministry of Justice staff cost for the project hasn’t been included in this figure as this was met within Ministry baselines. The Law Commission will be able to draw on the work completed by Ministry of Justice and the submissions made to the Select Committee on the withdrawn bill.”

Hipkins, Luxon spar over cancelled projects

National Party leader Christopher Luxon called the cull a “stupendous” waste of time and money, which Hipkins swiftly rejected.

"I've come to accept the National Party likes to whinge and moan about things," Hipkins said yesterday.

"It's difficult to have a contest of ideas with them when they don't seem to have any."

Luxon claimed Hipkins was pulling the pin on the projects only to put them back on the table if he’s re-elected.

"Labour’s pet projects, which have already wasted tens of millions of dollars of taxpayers' money, are lurking around the corner after the election. As sure as night follows day they’ll be back on the table if Labour is re-elected in October," Luxon said yesterday.

When pressed on whether any of the policies would be brought back, Hipkins replied: "We have been very transparent on the things which are not going to happen and the other things we will be taking a longer look at".

Luxon said Hipkins helped drive Ardern’s agenda and would “say anything and everything to get elected”.

“[It’s been] a huge amount of wasted resource and time on absolutely mad and insane ideological pet projects that actually have got absolutely nothing to do with where New Zealanders are at.”

Hipkins acknowledged the investment in some of the canned projects would not be realised, but he was setting a new direction for the Government with a "better focus" on the cost of living.

“When you refocus Government priorities, yes, that does mean that some of the investment that’s already been made won’t realise the benefits that were originally intended."


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