Mainland Western European countries are famous for their welfare programs. These programs have long been the bane of business who argue that it leaves them with uncompetitive wage structures, less able to finance development and generally tending to incite welfare dependency and cultures. In these countries, government spending can account for around 50% of GDP - half of the entire economy. Some countries have even higher levels of domination.
One might ask is NZ the same - and are there any possibilities of this changing. Consider that:
1. NZ has increased its goods & services tax from 12.5% to 15%
2. NZ local government land rates are relatively high at $1250-1800/annum - because govt provides localised welfare services.
3. NZ has relatively under-funded infrastructure spending
The evidence suggests that NZ is not a welfare state to the same degree as European countries. Government spending as a proportion of GDP I recall being around 30% for the Federal government. It could be better, and its certainly not conveying the right trend with the increase in GST. It did however cut some fat from the bureaucracy.