Budget cuts at the already stretched Retirement Commission threaten to undermine some of its front-line services including the well-regarded Sorted website, according to the latest Statement of Performance Expectations (SPE) for the organisation.
The SPE shows government has sliced more than $1.3 million off the Retirement Commission (or Te Ara Ahunga Ora) allocation for the 2024/25 financial year, leaving under $8.3 million in the kitty compared to almost $9.6 million last year.
Including forecast interest income of $130,000 (down from $250,000 in the previous fiscal period), Te Ara Ahunga Ora must make do with $1.4 million less this year.
According to the projected accounts, the Commission will trim staff costs by almost $200,000 with most of the belt-tightening – roughly $1.6 million – to come via cutbacks across all work programs.
Jane Wrightson, Retirement Commissioner, says in the SPE that the austerity drive will see less spending on “research and marketing of the Sorted brand”, for instance, as well as spinning out some annual projects into biennial events.
“We acknowledge the fiscal constraints faced by the Government, and the need to find savings in our operations despite not having an increase to our baseline since 2016,” Wrightson says.
“… Overall, the savings identified carry some risks to the Retirement Commission’s ability to carry out its current work programme and impact on the performance of frontline activity, such as the Sorted website, Sorted in Schools and other activities encouraging individual preparation for retirement.”
The Commission, which falls under the Ministry of Business, Innovation and Employment (MBIE) umbrella, is responsible for policy development and oversight covering three broad areas of retirement income, retirement villages and financial capability.
Wrightson also notes Te Ara Ahunga Ora has been charged by the Commerce Minister Andrew Bayly to conduct a feasibility study on rolling out “a coordinated sector approach” to financial education in the NZ school system.
“To do this effectively, we also need active support from the Minister of Education and her Ministry. As it stands there is no clear mandate to teach financial education in schools in what is already a busy curriculum, and there’s generally a haphazard approach when it is used,” she says. “This lack of clear leadership makes it challenging to have maximum impact in schools and the uptake varies from school to school and region to region. It’s critical that all young people can access financial education and the most equitable solution is that this happens at school.”
Despite operational cuts, the Commission has forecast a budget deficit of almost $800,000 in the current financial year compared to a shortfall of close to $1.2 million in the previous reporting period.