Did the Government overspend during Covid?

Chris Lynch
Chris Lynch
Aug 08, 2025 |

The cost of living crisis and a Treasury report on pandemic spending were front and centre in a lively Politics Friday debate between Labour MP Tracey McLellan and Ilam MP Hamish Campbell.

McLellan said people were right to be worried about parts of the proposed police restructure. She used Lyttelton as an example, saying the plan to reduce staffing at the local station to one officer would “dramatically change how community policing would function in Lyttelton.”

“It would be the end of essentially community policing as we know it, and we know that even for safety reasons you should always go in pairs,” she said. “Those police officers in Lyttelton are part of the community. They walk the streets, they talk to people, and they keep on top of it. The community quite rightly should be concerned, and they have not had any input into this process so far.”

Campbell said the proposal was still tentative and an operational matter for police. “They are always looking at what is the safest and most efficient way they can deploy their resources,” he said. “It is really important to give a big shout out to the police. They do an excellent job. Since we have come to government there have been 28,000 fewer victimisations each year. That is the equivalent of a city the size of Timaru not getting bashed, robbed, or raped.”

McLellan said the Government needed to follow through on its promise to deliver 500 extra police officers. “So far they have failed to deliver,” she said.

Campbell responded that recruitment takes time and said significant funding had already been allocated to boost frontline resources. “We have done 226 million dollars for those extra police officers, another 424.9 million over four years directed towards frontline support, including pay increases and vehicles,” he said. “In the 2025 budget there is another 480 million dollars to support frontline police and 60 million over four years for the police prosecution uplift programme. We are modernising structures and giving police the resources they need. We have seen a huge decrease in ram raids, a decrease in victimisations, and a decrease in violent crime.”

The discussion then turned to the Government’s plan to replace fuel taxes with road user charges for all vehicles in the future. McLellan said the idea “probably does make sense if it is done well” but warned against hitting households while they are already struggling.

“The last thing we want is for people to be hit hard right now, when the main thing people are worried about is the cost of living,” she said. “Of all the things this Government could be doing, this is hardly real action on the cost of living right here, right now.”

Campbell said the Government had delivered tax relief, reduced inflation into the target band, and ensured wages were now growing faster than prices. He cited a new Treasury report which criticised the previous Labour Government for overspending during the pandemic.

“Treasury absolutely slammed the previous government for the excess spending over the last couple of years,” Campbell said. “That has led to inflation that has taken people’s earnings and income through increased prices. We need to restore the economy and people’s buying power.”

McLellan rejected that characterisation, saying most pandemic spending occurred in the early stages and was focused on saving lives and jobs. “We make no apologies for saving lives and saving livelihoods,” she said. “We kept people connected to their businesses so that the economy was able to jump back into action once restrictions lifted. It is all very well to have hindsight, but when you compare us to other countries, others did not do as good a job.”

Chris Lynch
Chris Lynch

Chris Lynch is a journalist, videographer and content producer, broadcasting from his independent news and production company in Christchurch, New Zealand. If you have a news tip or are interested in video content, email [email protected]

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