Rangatira Marae, west of Te Karaka, across the Waipaoa River. It flooded during Cyclone Gabrielle in February, 2023. (Photo: RNZ)
Should central government hold huge cash reserves when communities and local councils are struggling? asks Bevan O’Connor, a candidate standing in the Takitimu Māori ward for Hastings District Council.
Across the country, we’re being told to tighten our belts. Councils are carrying a lot of debt. Rates are high. Hundreds of businesses are failing. Whānau are struggling to pay rent, buy kai, or fix cyclone-damaged homes.
And the government’s line?
“We need to be fiscally responsible.”
But how responsible is it to hoard cash while the cost of living soars?
According to the New Zealand Treasury’s interim financial statements for the 11 months ending in May 2025, the government is sitting on $24.9 billion in core Crown cash. Not assets. Not forecasts. Actual cash.
That’s up roughly $8.7 billion from the $16.2 billion held at the end of the last financial year.
To put that in perspective, in one year, the public account has grown by more than the total paid out in Treaty settlements since 1994 — that’s every single claim across three decades totalling $3.5 billion.
On top of that, NZ Debt Management holds a separate $15 billion “liquidity buffer” in reserve for financial market crises. The fund has strict rules, oversight, and clear criteria. But the government’s $24.9 billion cash stockpile is subject to no such scrutiny. There is no minimum to ensure readiness for disasters, no maximum to prevent destructive hoarding.
One system protects markets, and the other fails people.
Let me make this real. Here in Hastings, our council is in debt to fund a $240 million cyclone recovery. It’s estimated that bill will take 16 years to repay, while the rebuild will take about eight years to finish. We’re talking about the impact of two days of rain. One natural disaster. A debt that will last a generation.
That $240 million is just 0.96 percent of the government’s cash on hand. Less than one percent. They could settle our debt by pulling a single dollar from a $100 note and still have $99 left. But instead, our local councils are left holding the bucket while Wellington holds the umbrella.
And it’s not just Hastings. Cyclones and floods across Te Tau Ihu, Tāmaki Makaurau, and Te Tai Rāwhiti have torn up infrastructure and homes. Tasman has been hit hard. But when the prime minister visited Nelson last month — three weeks after the flooding — the only firm offer was a rain radar that locals had already asked for more than 15 years ago. Too little, too late.
That $24.9 billion in core Crown cash isn’t some abstract figure — it’s real money. The kind that could rebuild every cyclone-smashed road from Tairāwhiti to Te Tau Ihu — tomorrow.
Remember too that in the last year alone, $8.7 billion was added to that pile — and meanwhile, whānau in Kaeo have been on a boil-water notice for 10 years now.
So, councils borrow and debt climbs. And what does the government say? That it’s not them causing inflation — it’s your local rates. They blame the very councils they’ve starved of support.
It’s a vicious cycle.
Government withholds funding.
Councils borrow.
Rates rise.
Inflation ticks up.
Government blames councils.
Rinse and repeat.
That’s why I’m standing for the Takitimu Māori Ward in the Hastings District Council election. I believe someone needs to speak up about the money. Our money. So far, everyone has been too damned quiet.
This isn’t a left or right issue. It’s a question of equity, transparency, and manaakitanga.
Where is our public money going? Why is it being hoarded while whānau go without? And how do we demand better?
I sent an open letter to every major political party leader to ask for answers. The public deserves to know what the plan is for that $24.9 billion. Is it for a rainy day? Because it’s raining now.
What has the response to my letter been so far? Silence.
The same silence that lingers when survivors of state care abuse demand justice. The same silence that hangs after the Tiriti hīkoi fills our streets with voices that can’t be ignored. The same silence that hums louder than the diggers still clearing cyclone wreckage.
That silence speaks louder than any politician ever could.
Bevan Matiu Pihema O’Connor (Ngāpuhi, Ngāti Kahu ki Whangaroa, Ngāti Whātua) is a lawyer, business owner, and Māori rights advocate living in Mataruahou, Te Matau a Māui. He is standing for the Takitimu Māori Ward on Hastings District Council.
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Author update as at August 2026: I’ve kept following this since writing the piece. Government cash and cash equivalents have now reached $31.4 billion, up from $24.9b when I wrote it, and almost double the $16.2b held in June 2024.
I’ve also looked further into the need to keep cash aside for emergencies. NZ Debt Management currently maintains a $10b minimum liquidity buffer for that purpose.
The latest cash balance is also $5.84b higher than Treasury forecast.
So the question I’m still left with is: how much cash is enough and at what cost to the daily lives of ordinary New Zealanders?
It is indeed interesting that they hold almost $25 billion in cash when they have so much debt. Makes me wonder why they don’t use some of it to make a lump sum payment on the debt to reduce the interest burden of it…
I don’t live in Hawkes Bay, but you’re asking some good questions there if I’m being honest.
It’d be good to know why they’re sitting on all that cash like a dragon protecting its stash of gold.
Kia ora Stephano,
You’re asking the right questions, and I too had thought of the dragon protecting the gold!
I actually got a formal response from Finance Minister Nicola Willis about that $24.9 billion cash pile today.
Here are a few key points she made:
She confirms it is $24.9 billion in total crown cash, and says the cash is a necessary buffer for “unforeseen shocks”.
Her main focus is on the Crown’s high liabilities, arguing that past deficits have increased debt, reducing our ability to weather future shocks.
She says the government is committed to getting the books back in order through spending discipline.
Her response confirms a political choice: prioritising a massive cash buffer over addressing immediate need.
I plan to write a follow-up article about it. Keep an eye out for that.
Why can’t the whole country be a special case? Every town and city in this country should be able to have a cash injection to help communities and people if there is that much money there. What’s wrong with this country? We should all be helping each other for a better country and future for our kids. We all breathe the same air and we all want the best for our kids and grandkids.
This is exactly the point. A natural disaster in Hawke’s Bay, slips in Wellington, a flood in Nelson, a water crisis in Kaeo – these are symptoms of a national infrastructure and resilience deficit. Your question, ‘Why can’t the whole country be a special case?’ is the right one. It’s about a vision for New Zealand: do we use our collective resources to build each other up, or do we leave communities to struggle alone? The idea that we’re all in this together is what seems to be missing from the current fiscal strategy. Thank you for this.
Perhaps central Government wants to keep a few dollars up its sleeve in case its fiscal austerity model flounders and the pre -election promised utopia “For all hard working kiwis” fails to materialise? Tax bribes seemed to work pretty well last election.
Kia ora, āe — big numbers on both sides of the balance sheet: net debt around 41.8% of GDP, not unmanageable, but still a sharp contrast with $24.9b in cash that could be easing the load for us.
On the other side of the balance sheet, Government’s net indebtedness is around $89bn.
Further to the above, there is a need for a wider discussion about where the responsibility for expenditure and revenue-raising in local government should lie. Everyone thinks that they are a special case.
Kia ora Ross, you’re absolutely right. We desperately need that wider discussion about who pays for what. The current system is broken. In my opinion, a nationally significant climate disaster like Cyclone Gabrielle is the precise case study to force that conversation – about defining whether catastrophic climate infrastructure loss is a local or national responsibility. The government’s choice to leave Hastings with a 16-year debt is a perfect example of the short-term thinking we need to fix. Thanks for raising this critical point.