Govt backs 'tough love' message to public sector

Finance Minister Bill English. Photo / Mark Mitchell

Public servants have 12 months to do more with less money themselves, or the Government will push "significant and long-lasting change" on to them, says Finance Minister Bill English.

Treasury Secretary John Whitehead told state sector chief executives on Monday that they needed to make changes to boost their productivity, or they would have those changes made for them.

Yesterday Mr English backed his message. "We are looking for the public service to own the problem, rather than leave it in the hands of government. If they own the problem, we are likely to get better decisions, but if the public service believe or act as if nothing has changed then there certainly will need to be change." He said the Government expected "significant and long-lasting change" in the public service.

"This isn't a matter of the opinion of the current Minister of Finance or the political view of the current government. This is a choice between making considered decisions now to meet the needs of the public, or making harsh decisions later. When you've got $10 billion to $12 billion deficits and 10 years of deficits, the biggest risk is that people will make no change, and services can disappear."

Mr Whitehead's speech said government department heads needed to move outside their "traditional comfort zone" and look for options such as those used in the private sector.

He proposed contracting out more services to the private sector and merging administrative functions to get greater efficiency savings.

In a speech to the Public Services Association last year, Prime Minister John Key had promised not to "radically reorganise the structure of the public sector".

Yesterday Labour's state services spokesman, Grant Robertson, said the Government's demands on the state sector clearly indicated a shake-up was ahead despite that promise.

"Gutting the public service and contracting out will do nothing to help New Zealand overall. Having contractors more interested in turning a profit than people means there is no guarantee that services will be better."

Both Mr English and Mr Whitehead stuck by their calls to contract out more services.

additional reporting NZPA