This is partly because of the huge fiscal costs of these transfer payments – amounting to an estimated $ billion this financial year, or some 11 per cent of estimated GDP (both figures include the fiscal cost of New Zealand Superannuation). This cost substantially constrains the government from devoting more resources to education, law and order, research and development, and tax reduction.
Indeed, it is probably fair to say that there is no other part of the government budget which can provide resources for these things. Certainly, it is hard to see scope for big reductions in the health or education budgets, the only other really major categories of government spending.