I had actually been planning a proposal for this fund for next year (social science). I'd sat through seminars on how to write a good proposal, and no one mentioned funding getting cut was even a possibility. The universities were completely blindsided.
It's a decision that seems to be driven purely by ideology, and mostly comes from one of the junior coalition partners (Act). I know for a fact that their leader has been expressing discontent about some of the research being done that has been criticising him (I.e. showing how his party spreads misinformation).