Prime Minister Christopher Luxon and Labour leader Chris Hipkins on the school lunch backlash. Video / Mark Mitchell
Analysis by Thomas Coughlan
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
Dig a little deeper, though, and you find the lunches are a classic failure of New Zealand policymaking: Labour sees a social need and creates an expensive, debt-funded policy to grapple with it, Act, furious at the cost, tries to get rid of the policy, forgetting about the social problem it was meant to solve, and National sits in the middle trying to work out the minimum amount it needs to spend on the policy to win the next election.
Each of these considerations has its place. Who can forget, more than a decade ago, Campbell Live visiting a decile 1 school and finding, in a class of 27 students, just 14 had brought lunch with them (and among those 14, very few of the lunches could be described as substantive).
But those considerations should be weighed against the cost — and the cost should be weighed against who is paying for the lunches.
The minister in charge of the programme, David Seymour, isn’t entirely right when he told BusinessDesk school principals should “set a good example for students in expressing gratitude, considering it is the New Zealand taxpayers who are funding this programme”.
For every year of the programme’s life, New Zealand has been in deficit — so there’s a good argument that taxpayers aren’t actually funding this programme and the bill has been passed to the students themselves — a bitter lesson for the children that there really is no such thing as a free lunch.
Seymour’s complaint about cost is not entirely without merit, either — the cost of the lunches is high.
Treasury is forecasting a $17.3 billion deficit for the year to June 2025 — an astonishing number. It’s so large that even if you Elon Musked every public servant into an early retirement — all 63,000 people between Public Service Commissioner Brian Roche to the Customs officers at the airport — you would still have a deficit of $5b, an amount equivalent to roughly a quarter of the education budget.
In the near term, the period of fiscal restraint will see these deficits reverse out into surpluses, but the long-term picture isn’t good. The last long-term insights briefing by Treasury warned by the time today’s primary school children are in their 40s, net debt as a share of the economy will be nearly four times what it is now at 196.9% of GDP. We’ll be spending 8.4% of GDP servicing that debt, four times what we spend on servicing our debt today and more than we have ever spent on education.
On those numbers, exploding and inedible lunches may very well be a symbol of the decrepit public services today’s children can look forward to. Barring some big policy change, it’s hard to see how the Government can continue to keep delivering its current level of service if debt and debt servicing costs rise that high.
So, yes, there is an argument for a greater consideration of cost, not because the lunches impose unfair burden on today’s taxpayers (they don’t), but because they’re just another bill today’s taxpayers are passing to their children.
Should the state provide lunches?
The school lunch programme has had a rough ride through the bureaucracy.
It probably owes its existence more to the Labour Party and its long-time children’s spokeswoman, Jacinda Ardern than any single department.
The John Key Government got advice on funding breakfasts or lunches in low decile schools in 2013, but Treasury officials were against the idea, citing a 2012 Auckland University Study that found “a New Zealand breakfast programme had no statistically significant effect on attendance and no effect on academic achievement or student conduct”.
Officials cited international examples that found “even where breakfast was offered at school, there was no increase in the probability of a child actually eating breakfast”.
When that paper was released to the media, Labour’s then children’s spokeswoman Jacinda Ardern rejected the findings saying that Treasury should “just keep it very, very simple”, adding that if children were going hungry in schools, it was probably due to poverty, and the Government could do something to fix it.
Associate Minister of Education David Seymour trying the new lunches at Parliament. Photo / Mark Mitchell
By the time Labour was in Government, Treasury was more supportive — but only slightly. In 2019, Treasury knocked back a bid for $400m to just $44m for a pilot scheme.
Since then, Treasury has been a bit shirty about how the scheme has been paid for, grumbling about the fact it was being funding through the Covid-19 response fund, and the fact it was funded on a time-limited basis (which Treasury actually supported — advising Finance Minister Grant Robertson in 2023 not to give in to Education Minister Jan Tinetti’s bid to fund the programme permanently — advice he accepted, although Labour later campaigned on permanent funding).
The initial design of the scheme was about ”reducing food insecurity and financial pressures on households with school-aged children”. As the programme went on, some of the poverty reduction goals got lost, and the lunches became more clearly the responsibility of the education portfolio.
Value for money is important — 3% of the entire primary and secondary education Budget was spent on lunches last year.
We spent more than twice as much on lunches as we do on professional development for teachers ($129m) and about half as much on special needs support for students ($765m). The lunch programme, which did not exist five years ago, has become one of the most significant line items in the education budget.
The four (later five) evaluations, commissioned by the Ministry of Education, and later digested by Treasury, found the scheme had a lot going for it — but not enough to get permanent funding.
Prime Minister Jacinda Ardern championed the lunches against sceptical officials. Photo / Peter de Graaf, File
For the 7.3% of students with least access to sufficient food at home, the scheme improved nutrition.
However, Treasury’s view was that the evaluations showed “no impact on attendance” and Māori, who made up 48% of the students in the programme, “have not benefited on most metrics, such as school functioning (e.g., paying attention in class), health, and mental wellbeing (with mental wellbeing worse off for those in the programme).
Treasury also found more than one in ten lunches were going to waste. Officials made a plea to consider redirecting funding into education instead of food.
“Meanwhile, we know educational outcomes are declining. Achievement scores in reading, science, and maths as measured by the Programme for International Student Assessment (Pisa) have been declining. Investments targeting reading and maths programmes for students falling behind will likely have a greater impact in reversing these trends,” Officials said in their commentary on the lunches.
This flavour of advice is what ministers often describe as “classic Treasury”. While analysts quite fairly identify the problems of value for money and declining educational attainment, they seem slightly ignorant of the fact targeted maths programmes aren’t going to be of much use to hungry kids.
Once the programme got going, it found a champion in the Ministry of Education, setting ministers up for a classic Terrace turf war between Treasury and the Ministry.
The Ministry read the evaluations differently to Treasury, telling the new coalition Government that evaluations demonstrated “happier, more engaged, and healthier learners” and that students who received them were “better concentrate and participate in classroom learning”.
The evaluations, read without Treasury or the Ministry of Education’s gloss, were not universally laudatory, but they were quite positive.
The study compared students at schools receiving the lunches with students at schools that fell just outside the band receiving lunches.
They found about 7.3% of secondary students with “moderate disadvantage” didn’t have “sufficient food at home on any day in the previous week”, demonstrating a clear need for lunches at school.
Somewhat amusingly, the study’s authors discovered what many parents of secondary school students will attest to — teenagers are “always hungry”. The study also found students receiving the lunches were significantly more likely to feel like they had enough food at school each day than those who did not receive lunches (54% to 40%). It also found students receiving the lunches had a 3.6% school functioning advantage, which is the study’s way of quantifying whether they were able to pay attention more.
These evaluations were completed before the Budget bid of 2023. While they do show the programme improved the lives of the children who received the lunches, they also justify some of Treasury’s scepticism from a cost perspective, and do beg the question of whether the rather slight gains in wellbeing could justify the very high cost of the original scheme.
Where should the money come from?
The advice from officials is slightly dissatisfying: it doesn’t provide a clear justification for cutting the lunches entirely, cutting the cost to the level Seymour has done, or scaling the lunches back up to the level they were funded by Labour.
There is an inter-generational question which officials are not contending with (mainly because it ventures far beyond their Budget analysis remit).
This decade, for the very first time in history, New Zealand spent more on superannuation than education (the precise year, 2023 or 2024, depends on the measure of spending you use). The gap is only likely to grow.
This is mostly a story of demographics; the ratio of superannuitants to students is shifting. Education spending isn’t being cut — the average spend per secondary student is about hundreds of dollars higher now in real terms than it was a decade ago — but the fiscal pressure exerted by the ageing population means this spending is under pressure.
Everyone from Treasury Secretary Iain Rennie to Infometrics Principal Economist Brad Olsen has warned about the fairness of current fiscal settings. They’re right to. In the year, while school lunches had $130m cut, superannuation expenses are set to increase by $2b without anyone batting an eye.
If you take a big, big, step back, what you can see in the lunch programme is the consequences of the Government having to make cuts of varying sizes to almost every area of spending because it (and every Government for decades) has refused to touch what is now the largest single line item in the Budget.
Treasury Secretary Iain Rennie has said he wants to look at the generational questions posed by current fiscal settings. Photo / Mark Mitchell
Last year Super rates went up between $18 and $22 a week to roughly between $400 and $520 a week depending on one’s situation. If just $2.60 a week was siphoned off into the school lunches programme, funding could be restored to its previous rate.
Treasury’s other silver bullet is broadening the tax base. If you were to borrow the one the Cullen Tax Working Group recommended in 2019 and updated it with today’s GDP figures, it would raise about $430m in the first year — more than enough for the lunches.
In all likelihood, a solution to the lunch problem will involve cost cutting. Officials do raise a fair criticism that the cost of the old scheme did not justify its benefits. Officials should try to find lunches that are good enough that students actually want to eat them and healthy enough that they set them up for a good life. These lunches should not explode.
But it should also involve looking at intergenerational equity and whether future generations are getting a raw deal to pay for gold-plated public services for their parents.
